Innovation is key to growing the African economy, and digital startups are starting to make an impact. But the environment is not always conducive to facilitating the success of small, innovative enterprises.
Lindiwe Zulu, minister of small business development, believes that Africa – typically left behind in technology – is in a good position to leapfrog old technologies and reap the benefit from the latest developments.
Kevin Taylor, president: Asia Pacific, Middle East, Africa and Turkey at BT, doesn’t think Africa has been excluded from the phenomenon of digital transformation – and the continent could become the next innovation powerhouse.
“I believe these new technologies will absolutely be adopted in Africa. If the continent embraces technology, creates SMEs and becomes an innovator – it has a great future.”
In terms of technology adoption, Kenya is the fastest-growing country on the continent, he says. This has been enabled by and agile and supportive government.
Africa has already demonstrated that it is able to innovate with technology, he adds. “340-million people in Africa don’t have access to financial services. But 300-million people are registered with mobile providers for mobile payments.”
Unleashing the continent’s potential can only happen in a conducive environment.
Zulu believes that creating the right ecosystem is key. “African SMEs all have a lack of access to resources, and access to information. And, even if you are able to access information, you need to have the capacity to analyse the information.
“So the ecosystem is important. We need to determine what the real needs are, and speak to those needs.”
But SMEs can do a lot to help themselves, says Caroline Atkinson, head of global policy at Google.
“SMEs need to have an openness to innovation, an openness to ideas, and a very strong education system.”
She points out that, with Internet availability, anyone anywhere can have access to information or find a market for their products.
“We know that small businesses that are online are more likely to be highly profitable.
“But SMEs may not know how to get online, so providing digital skills is an important part of the environment.”
Governments should ensure that SMEs have connectivity in a way that is accessible and not too expensive, Atkinson adds.
For governments to drive innovation, Taylor believes a focus on STEM (science, technology, engineering and mathematics) in education is vital.
Governments need to be supportive, he says, nut not get too involved in the actual implementation of technology. “They need to let private organisations provide the technology, and not at the cost of the taxpayer.”
Competition in the network and services market creates a healthy market and helps to drive down the cost to the SME and consumer.
In fact, governments should provide an enabling environment and let SMEs figure out their own business ideas.
“There is a lot that young people and entrepreneurs can do by themselves,” says Atkinson. “If they are given the environment and the tools they don’t necessarily have to have the opportunities pointed out.”
One area where governments absolutely should be involved is in ensuring that SMEs are paid quickly.
“The one thing that is very damaging to SMEs is when they don’t get paid on time – and this can take them under. Governments can do a lot to foster an expectation that SMEs get paid on time.”