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Africa's Leap To Homegrown Innovation

October 2016

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Here’s a challenge for you:  Ask any man or woman on the street in the U.S. if significant innovations are solely or predominantly the province of the world’s most advanced countries, especially the wealthiest of the G-20 nations.

For the most part, that’s been true historically, in no small way because of the plentiful resources, both financial and human, possessed by those countries.

However, I would bet it will come as a shock to them that not only are the emerging markets increasingly the locus of significant innovations in the world economy, but in certain activities, even some sub-Saharan African countries have very quickly become the leaders of the pack. In fact, there actually are locales on the African continent where there are substantial technology incubators stimulating wholly new, homegrown inventions.

Who woulda thought?

It’s hard to not celebrate the rise of sub-Saharan Africa’s ‘new’ entrepreneur. Pick up any magazine focused on business in Africa and you’ll see for yourself the sheer number of stories devoted to innovation and you’ll sense the giddiness that runs through most of them.  In many respects this is warranted.  After all, this is a region where just under half of its 800-plus million people lives in poverty and where the absolute number of the poor is increasing.

The giddiness, however, may be premature.  For one the process of economic development is everywhere notoriously complex and nonlinear. Moreover, in the case of Africa, where the vast majority of its countries possess huge numbers of unemployed youth and adults, there are significant risks that should innovations, by dint of their productivity-enhancing nature, result in actually reducing the need for labor, the outcome may be worse than the status quo ante. Today’s African entrepreneurs could well find themselves on a knife edge.

Any economist worth his or her own salt will tell you that advances in technology propel growth.  At its root, innovation—which ultimately is driven by a quest to solve some type of challenge or capitalize on a new opportunity—enhances productivity, whether measured in terms of time-savings or greater output produced from the same input. And, increased productivity is a fundamental determinant of whether a country prospers or a business proves to be successful.

Think back to the revolutionary advent of semiconductors. The impact on the U.S. economy (among others) from the late 1950s American invention of the microchip—a tiny integrated circuit manufactured through an automated process–has been not only successive reductions in the amount of space taken up by electronic components, but also an exponential increase in the power and sophistication of the electronic devices in which they are incorporated.

Many economists believe that the invention of the microchip has not only fundamentally changed the productivity architecture of the U.S. economy as a whole, but that its direct as well as its indirect effects on growth are inadequately captured by official economic statistics.

Of course, an innovation need not solely be the discovery of a fundamentally novel, sophisticated process or product (“invention”); it can also be the development of a new approach in applying an existing technology—whether complex or not—in order to address a need otherwise not realized (“technology adaptation”); or the wholesale utilization of an existing technology without any modifications in its use or design (“technology adoption”).  In all cases, the outcome is invariably a rise in productivity.

In fact, the term ‘technology’ means different things to different segments of society, and its usage has changed with time. Today the term is often associated with electronic or digital products and services, but older and more basic tools and processes qualify as technology too. Yet at its core, technology is the practical application of knowledge to achieve a particular objective.  Nails, for example, are a technology for holding wood together, and in turn they led to the development of other technologies, from basic hammers to pressurized nail guns.

So what are some of the recent innovation breakthroughs in sub-Saharan Africa?  Here are some examples:

Mobile Banking.  Certainly, the advent of mobile banking in Kenya in the last decade is among the best known homegrown inventions on the continent.  Indeed, it epitomizes how advances in technology emanating from emerging markets actually find their way to advanced country markets on later.  This phenomenon is emblematic of how the traditional pattern embodied in the “product life cycle” is being turned on its head.

Mobile Phone Solar Charging.  With unreliable or often absent electrical grids across much of Africa, the use of mobile phone charging devices can be very difficult. Fenix International, a venture-backed private company introduced “ReadySet’, which is a portable solar-powered mobile phone charger designed for the African market. The result is not only greater use of otherwise8 idle phones enabling users to engage in mobile banking or to more effectively time when to harvest crops by being able to keep track of daily fluctuations in prices in the market which is often in a distant location, but also more revenue coming to the phone companies.

Resistant Crop Storage Bags. West and Central African farmers teamed with agricultural researchers from Purdue University to develop a triple-layered air- and water-tight storage bag, which provides extreme protection from moisture, pests, and high temperatures for a variety of crops, including peas, maize, sorghum, wheat, rice, nuts, and beans.  The result has been that farmers can time their plantings to favorable weather conditions and bring harvested crops to market at a time when prices are higher so as to generate greater income. In addition, the bags help farmers reduce reliance on pesticides, making agricultural communities healthier overall and enhancing food security. And these bags are manufactured and distributed locally, creating a new labor-intensive industry.

Educational Tablets.  Local educational software firms in East Africa, in collaboration with nongovernmental organizations, have developed a new pay-per-view tablet that allows teachers to customize courses, pulling information from different textbooks and other reading material in an economical way.  The changeable course materials help schools and their teachers overcome deficits in the educational infrastructure, and the pay-per-view rate results in less cost to students than that of a traditional textbook or laptop.

Cargo and Health Care Service Delivery by Drones.  In advanced economies, drones are not yet in widespread use for product delivery.  In parts of Africa, however, they’re already being used to overcome poor transportation networks, especially in the healthcare industry. In May 2016 the United Parcel Service established a joint venture with robotics maker Zipline to begin making up to 150 deliveries a day of transfusion blood to 21 rural clinics in western Rwanda. Drones are also being tested in Malawi to deliver blood samples of rural area infants for highly specialized HIV testing in the capital city’s major hospital.  Outside of the healthcare area, research is underway in Kenya on long distance unmanned drone cargo shipments as a run-up to a commercial robotic cargo drone test flight planned for 2017.  At the same time, plans are underway to establish a ‘drone port’ in Rwanda, with the goal of operating the first commercial cargo drones by 2020.

To be sure, we all should be rooting for Africa’s success to capitalize on its newly found innovation path.  Hopefully, this will help countries on the continent achieve a bona fide ’economic takeoff’, something that has been more than illusive for many decades.  But a lot depends on just how African businesses as well as policy makers actually harness this opportunity.  In light of the ‘initial conditions’ in most African countries today, in particular, the staggering unemployment rates, innovations whose dominant focus is on raising labor productivity and thus likely shedding workers, carry significant downside risks.  Should they be realized, Africa’s takeoff could be yet again jeopardized.

 

This article was written by Harry G. Broadman from Forbes and was legally licensed through the NewsCred publisher network.

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