Since the industrial revolution, investments in science and technology have proven to be reliable engines of economic growth – Neil Degrasse Tyson
Innovation is an important, but often misunderstood concept that is the key to economic growth. In its most basic form, wealth is driven by productivity, so the challenge for most countries is how to increase productivity. Besides increasing the number of people actively producing in the economy – by increasing the number of women in the labor force, for example, the only way to achieve this is to apply better technology, allowing more production for a given set of inputs. This is innovation.
But there is a common misconception about innovation. When most people hear the word ‘innovation’ they only think of the genre captured in Degrasse Tyson’s quote above: cutting edge scientific advancements as seen with innovations like blockchain or CRISPR. And indeed, these and exciting new technologies offer us the prospect of significantly pushing the limits of human capabilities.
On the other end of the spectrum, many experts believe, as the OECD has pointed out, that developing countries, like most African nations, should rely primarily on incremental innovation, taking ideas and concepts from other parts of the world and adapting them to the specifics of their own situations. Here are other ways to think about innovation:
Innovate in strategy
Back when I was in business school, the (Western) wisdom received was that companies should adopt targeted strategies. The conglomerates were distinctly old-fashioned. So it was a conundrum to Western observers that conglomerates, from South Korean Chaebols like Samsung to venerable Indian multisector companies like Tata, were thriving in the developing world.
However, studies have shown that conglomerates are often the best structures to face the industrial context: risks and shortcomings, of these emerging markets. Innovation in strategy is the subject of the book “Blue Ocean Strategy” by W. Can Kim, which I was lucky enough to have as a professor of strategy in business school.
Innovative business processes
In the late 1990s and early 2000s, some of the greatest deposits of wealth created in Africa were generated by the mobile telecommunications industry, and largely by African entrepreneurs: Mo Ibrahim at Celtel, Strive Masaiwya at Econet and the South African team at MTN.
Business model innovation is perhaps the most important but little-known type of innovation by Africans.
These entrepreneurs did not invent cellular technology. Rather, they have combined their understanding of the African market and consumer, with Western cellular technology and improvements in computer processing power and software to develop and adopt the “prepaid telecommunications business model” making mobile technology l The prerogative of the wealthy who could afford to be billed for their afterthought use in a mass market product accessible to anyone with some purchasing power. The massive generation of wealth in non-rental extractive industries generally indicates that massive positive economic value is being created, and this was, and is, the case with the mobile telecommunications industry in Africa. Business model innovation is perhaps the most important but little-known type of innovation by Africans. This allows us to borrow innovations that could have cost hundreds of millions of dollars to develop over long periods of time, combine and adapt them to solve uniquely African problems in a way that enables Silicon Valley investors. to be adapted to the product market. It’s business nirvana if you can achieve it.
It is in the innovation of business processes that we see some of the innovations that could be a game-changer for Africa. These include innovation in payments by companies like Mpesa and Pagatech, solar home systems being developed by Lumos, new ways to access markets pioneered by Cars45.com, up to ensuring the safety of pharmaceuticals, developed by M-Pedigree in Ghana.
Given a relative lack of resources, it is difficult for African innovators or entrepreneurs to compete with their counterparts in economies better endowed with basic R&D. It is often better to borrow these technologies. One area where it makes sense to develop our own technology is solving uniquely African problems. For example, the International Institute of Tropical Agriculture has done a lot of work to develop cassava strains better suited to the African environment, with increased resistance to diseases and pests, less cyanide, and faster maturities than native varieties. . The use of technology to fight uniquely African diseases or to solve other problems like mass education are also important areas of interest.
Incremental innovation is an important, albeit less sexy, form of innovation. It involves taking equipment, systems and processes that are already working and then adapting them to become better or to better adapt to your environment. In the African context, this will often involve obtaining the technology from abroad initially and working to better adapt it to African environments and business processes.
The Japanese have a concept of Kaizen or continuous improvement. This approach has led to massive increases in productivity that have enabled Japanese companies, like Toyota, to become some of the most efficient in the world. Kaizen is implemented at all levels of a business, from CEO to janitor, and it has the benefit of transforming the business into a learning organization that learns and adapts to its environment. This is perhaps the most important part. Kaizen often does not produce the sexy ‘big bang’ innovations that make headlines, but in a low productivity environment like the one we have in Africa, improving business productivity to make them more competitive in the world. he global scale is crucial to the continent’s long-term success.
Overall, improving productivity, which can only come from innovation in one form or another, is vital for improving the well-being of Africans. It is for this reason that I welcome anyone, like Quartz, who celebrates African innovation from any side and, through it, encourages others to innovate.
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