Disruptive innovation is transforming Africa’s economic potential
Africa's growth in mobile phone usage 2007-16
Africa's mobile broadband growth rate 2015-16
World population growth by 2050 from Africa
Disrupting Africa: Riding the wave of the digital revolution
Africa has far less legacy to get in the way than in other regions, creating a clean sheet upon which companies can develop their own distinctive business models. We see this in the speed that many markets are expanding. We also see it in the blurring of industry boundaries – the coming together of renewable energy, mobile payment and consumer finance is a clear case in point.
Technological disruption is transforming markets and societies across Africa in ways that wouldn’t have been possible even five years ago. And this opens up huge and still largely untapped commercial potential for domestic and international businesses.
From the demographic dividend of a young and rapidly expanding population to an increasingly affluent and aspirational middle class, Africa has the potential to become a new powerhouse of production and consumption in the 21st century, just as Asia was able to do in the late 20th.
Drawing on our market experience and wide-ranging market analysis, we believe that there are five fundamental priorities for mainstream businesses, disruptors and policymakers:
Boosting connectivity through increasing access and affordability is essential for disruptive development in Africa. Connectivity links consumers to businesses but also enables innovators to share ideas and seek funding and advice through the shared economy.
While mobile connectivity is well-advanced across Africa, internet availability lags behind. Less than 30% of African people have access to mobile broadband (compared to 43% in Asia) and only 15% have internet at home.
Blockchain is emerging as a key tool in stamping out corruption and waste, particularly in the public sector. Blockchain is already being used in Africa to improve traceability in the diamond trade, and has the potential for many other applications including combatting tax avoidance, avoiding land registry disputes and providing greater transparency of public spending.
Nigeria’s experience highlights the opportunities and challenges facing companies in Africa’s e-commerce sector. Nigeria is Africa’s largest market, both by size of GDP and population and with an estimated two thirds of Nigeria’s internet users having shopped online at least once, there is an e-customer base of almost 60 million Nigerians. Drone technology and 3D printing have also helped Africa to bypass infrastructure challenges and improve access to markets, previously unreachable.
Disruptive technology is helping to overcome the traditional barriers of distance and limited access to healthcare. One example is Peek, a portable eye examination kit which lets users carry out eye exams by taking high quality retinal images with their mobile phone. Another combines big data and drone technology to avert potential epidemics through early detection and tracking.
From Cape Town up to the ‘Silicon Savannah’ of East Africa, more than 100 tech hubs have been set up across Africa over the past decade to help foster home grown innovation. Many hubs focus on supporting social enterprises that are developing solutions to social problems.
Technology has also been transforming teaching and training in Africa, through delivering educational content on mobile and online channels.
Mobile connectivity brings financial inclusion by enabling banks and telecoms providers to reach out to previously unbanked customers with low cost accessible services.
Through the success of the M-PESA payments platform, Kenya has one of the highest rates of inclusion in Africa, yet comparable platforms in other countries have found the going harder.
Partner, Chair of Africa Business Group
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