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Sober approach to tech and innovation needed

Such as technology has been, and will likely continue being, key to growth in Africa, certain false images and notions of the possibilities it pre- sents have in recent times emerged due to rash enthusiasm from both the public and private sector. These false images of tech and innovation need to be replaced by a sober outlook that, though devoid of unrealistic expectations, is nonetheless ambitious and visionary.

There is no contending the fact that technology has become the single most transformative factor in Africa. Its influence on the continent in the past decade has been so profound that it was the core focus of the World Economic Forum on Africa 2016.

WEF Africa 2016, which was held in Rwanda in May this year, saw region- al and global leaders from business, policy and civil society descend on Kigali,

the Rwandese capital, to discuss a time- ly theme: Connecting Africa’s Resources through Digital Transformation. The forum presented the public with a rare glimpse into the ongoing conversation on the power of technology to address key development challenges in Africa.

Interesting insights emerged at the eve and wake of the conference. Some attendees expressed divergent views, others complementary opinions and even others revolutionary out-of-the box insights.Yet what was clearly unan- imous in the pronouncements of policy makers at WEF Africa 2016 was the view that digital innovation would play a key role in transforming Africa.

Nobody summed up WEF Africa 2016 more beautifully than  Professor Calestous Juma, the well regarded Kenyan academic at the Harvard Kennedy School. In a write-up pub

lished  at  the  WEF  blog  a month

before the landmark conference, he said that: “Digital connectivity has the potential to do for Africa what railroads did for Western economies in the 19th century.”

Calestous’ view is spot on pre- cisely because the expert in interna- tional development is not speaking about lofty theoretical ideas, but real developments that are taking place on the ground. Digital innova- tion, especially mobile telecommu- nications, is transforming the eco- nomic landscape in Africa. There is nowhere where this is more apparent than Kenya.

Kenya is now the global lead- er in mobile money through the revolutionary M-Pesa. Many other

countries across all major markets in the world have tried to replicate the M-Pesa model but to no avail, making Kenya a rare benchmark of success in mobile money as well as an increasingly important hub for technology in the region.

The benefits of M-Pesa are not just economic, but social, explaining why it has captured the attention of development agencies in Africa as well as institutions such as the World Bank.

Today, thanks to M-Pesa, urban dwellers no longer need to make overnight trips to their rural homes to pay their children’s school fees (or give money to relatives); women in informal settlements can go into business without fear that their spouses will forcefully take away their money to go drink; unbanked have access to savings and credit facilities.

Simply put, M-Pesa’s impact on society is phenomenal—it has wrought major socio-economic development, including eradication of poverty and provision of employ- ment in marginalized areas as well as for excluded people such as women and youth.

M-Pesa presents a quintessential

example of how technology can have

a major socio-economic impact and help drive development in a conti- nent where the urgency with which development is needed cannot be exaggerated.

Consequently, M-Pesa has helped fuel a lot of enthusiasm across Africa about the potential for digital inno- vation to transform the continent. Somewhere amid this excitement, however, clarity and sober judgment has been lost to blind enthusiasm, as evidenced by the overwhelming number of innovations that have spectacularly failed to deliver both economically and socially, but rather helped fill Africa’s infamous grave- yard of failed projects. Of  course,  it  is  tempt ing to ascribe this widespread failure to the business maxim that most new businesses, particularly in dynamic fields like technology, fail. But a similarly compelling obser- vation can also be made: perhaps the reason why many technolog- ical innovations are not bringing the intended impacts in Africa is because there is a huge disconnect between so-called ‘techpreneurs’ and the market. This is clear to see in the pattern in which the tech culture is growing across African countries, including Kenya. Tech circles are small and elitist in nature, primarily restricting entry to the top cream of society whom ironically understand more

about the business culture in    the

U.S. than they do problems facing the masses in areas like Kibera. The result is that tech solutions for the masses are being developed by teams that really have no idea of what life for the masses is really like, explain- ing the widespread failures.

The growth of tech throughout most of Africa is hollow. It lacks real substance and is generally something happening on the fringes that—thanks to a lot of self-glorify- ing rhetoric—misleadingly appears to be taking the general population by storm.

The average Kenyan on the street still probably thinks Google, email, Facebook, Twitter, social media and the Internet are one and the same thing. Only a few better off Kenyans know the differences. Until every- body is reasonably informed on such basics of modern technology, innova- tive solutions that leverage on these tech platforms will likely continue failing at the rate at which they are. Digital innovation needs to be given  substance  by  substantially involving the folks at the bottom  of the pyramid, those millions of people struggling to get the basics, the people whose lives and struggles prick our consciences by constantly

reminding us that economic devel- opment can never be reduced to a set of lofty numbers or flowery rhetoric. True economic development must be reflected in tangible improvement in the day to day lives of people.

Digital innovation is therefore only effective from a development point of view if it achieves tangible results for the masses, as is the case in M-Pesa which is not only used by,

 

but benefits both rural and urban areas, both informal settlements and leafy suburbs.

 

Team up with Wanjiku Techpreneurs simply have to be in touch with everyday Kenyans, or “Wanjiku,” as the popular Kenyan colloquialism goes. The same is true for techpreneurs in many other African markets. The need to be in

 

touch with the needs of Wanjiku is something that M-Pesa understood right from the beginning, explaining why it has outlived other innova- tions and has had such an immense socio-economic impact.

More than anything, M-Pesa’s runaway success is attributable to the fact that it understood Kenyan society, culture and behavior with the clarity and simplicity that char- acterizes true insight. Safaricom knew that as the majority of peo- ple from the rural areas moved to Nairobi for work, they sent money back home in matatus and buses. There was already a huge traditional market for remittances that every- day Kenyans were used to.

Therefore when M-Pesa launched in 2007, it basically just added a tech spin, so to speak, to  a market that already existed: it innovated a simpler way of serving a big need that was already there. This underscores the fact that it had a really clear understanding of what Kenya really was like, an under- standing that sadly eludes many techpreneurs.

The problem is that techpre- neurs in Africa are sometimes pur- suing markets that do not in reali- ty exist. The needs they anticipate are totally different from the true needs of Wanjiku, meaning that there is a product-market mismatch and, as one would expect, minimal socio-economic impact.

Likewise, the other  problem  is the fact that techpreneurs, even when they do pursue existent needs, fail to appreciate the importance  of bringing in locals into the value chain. This is evident in some of the new currents of thoughts in e-commerce such as the proposal to use drones for deliveries in Kenya in order to overcome the challenge of poor addressing, bad roads and traffic.

Granted, drones are a good idea and  have  multiple   applications,

including in key social areas such as health. In fact, Malawi is testing the use of drones to distribute HIV med- ication to rural populations—people otherwise excluded from healthcare services.

Drones, however, are not the best idea for beating traffic for ecommerce firms doing deliveries in Kenya. They create very little job opportunities and are costly. Motor bikes, on the other hand, can beat traffic and navigate into estates to make deliveries at a fraction of the cost of drones and maybe even faster while simultaneously creating more jobs for the average Kenyan.

Creating jobs for the masses  is a critical part of building any suc- cessful business. It gives a business social and political capital, making “it too big to fail” in certain sense. For instance, imagine all the people

who own M-Pesa agent shops either as a primary source of income or   a side-hustle. It is a big number of close to 100,000 and Safaricom can use this as leverage in the off-chance that government starts being restric- tive or tolerates hostile competitive behavior from a foreign player.

Techpreneurs in Africa therefore have to understand that although the solutions they advance may be as sophisticated as those portrayed in Hollywood science fiction films, they must still be in line with the simple needs of  the  masses. This is necessary for any meaningful development. Similarly, the solutions should create as many jobs as possi- ble, especially jobs for the relatively unskilled.

 

A game of partnerships

Part of the reason why techpreneurs in Africa cannot relate with the mar- ket is not that they do not want to or that they are arrogant elitists—far from it. It is because they are mostly young and rarely have the formal business training or practical wis- dom that comes with experience.

From Nairobi to Cape Town, Lagos to Accra, tech in Africa is mainly a pursuit of people under the age of 25. At this age, most of their business and social skills have not fully matured. They may therefore be able to design products well, but not read and analyze true market needs. It is therefore very critical that academia steps in to give techpre- neurs some sort of “street MBA” that can enable them to understand the basics of business. Entrepreneurs need to not just understand new technologies, but how these tech- nologies can be transformed into entrepreneurial opportunities that can create vast social and economic impacts.

“Concerted efforts will need to be made to train a new generation of Africans to ensure they are able to understand these emerging digital technologies and grasp the

associated entrepreneurial opportu- nities,” observes Professor Calestous Juma.

In the final analysis, it also important to understand that though practical wisdom is always indis- pensable, it never comes from a classroom, not even an Ivy League one. It comes from the great school called human experience. Mother Teresa, the beloved Catholic nun who will be canonized this year, famously said:“I can do things you cannot, you can do things I cannot; together we can do great things.”

This is some sublime wisdom that techpreneurs should take to heart. For instance, there are things that are critical to business success such as conducting thorough market research at the grassroots that can- not be effectively done by 25 year old entrepreneurs. This is practical wisdom. Market research can sometimes

only be done by those who are sufficiently competent to conduct such kind of research, such as NGOs or development agencies that have direct and continual contact with people on the ground. That is why any business is a game of partner- ships. Without partnerships no busi- ness would survive.

“Partnership are critical for the success of tech in Kenya and Africa,” says Albert Mukiria, a computer science expert and lecturer. “Think, for instance, of health care: a good mobile app that collects patient information in order to provide time- ly information to patients in cut off areas such as rural areas and slums can only succeed if it partners with NGOs and development agencies that work in these areas,” he says. “Partnerships are not just necessary, they are encouraged and will fast track real growth in tech,” concludes Mukiria.

 

Partnership

Even though partnerships are crucial, there some areas where the onus is entirely on the government. These are areas such as formulation of accommodative business laws; accelerating electricity penetration; faster installation of communica- tion infrastructure in both rural and urban areas to curb unequal devel- opment; and so on.

Discussing and coming up with abstract solutions for such sweeping reforms is always easy. Practical implementation, however, is the thorny issue for the obvious reason that it requires one to move out of their comfort zone and confront the difficulties and obstacles that often come with implementing any new idea.

Africa must not be afraid to come out of its comfort zone and reap the benefits that come with technology. The opportunities are immense, they just need to be properly understood before they can be pursued