From: IT Web.
Technological innovation, and often that which is digitally-enabled, is underpinning the extraordinary pace of advancement globally, and no industry is immune to the disruptive forces.
A relatable example has been the disruption of many long-standing blue-chip consumer brands, through the creation of the infinite e-commerce ‘shelf’ and cheap marketing channels by way of leveraging social media platforms and YouTube’s network effects. More recent examples of digital disruption relate primarily to COVID-19. Zoom Video Communications has been the large benefactor of the move to virtual meetings and conferences, its share price up 130% since the beginning of the year.
Amazon Web Services, Azure and Google Cloud have also benefitted as workforces find themselves operating in more mobile environments, pushing businesses to evolve towards a cloud-based business model and environment. And let’s not forget to make mention of the renewed role of the telecommunications industry within this new environment, being the all-important backbone, ensuring that this new way of digital living is functioning seamlessly.
Africa is at the forefront of innovation. With the dynamism, energy and strength of its people, largely due to its unique and growing youth demographic, the continent is an extremely important stakeholder in contributing to the development of innovative solutions.
According to the 2019 Partech Africa Report, the African continent attracted more than US$2-billion in foreign capital investment in 2019, representing a 74% increase in capital flows versus 2018. What is more notable, however, is that this sheer quantum of capital actually bypassed African public markets and rather moved into the unlisted start-up space. This capital flow is indicative of the innovative potential investors see in young African tech entrepreneurs.
It is this tremendous potential that we believe must be harnessed and nurtured, to incubate revolutionary African ideas and scale these globally to disrupt. By promoting a collaborative ecosystem amongst corporations, governments and risk capital providers, the hope is to support African start-ups in their quests to innovate, disrupt and achieve sustainable goals.
The rise of tech hubs in Africa
Start-ups require three key things from potential investors: funding, knowledge and networks. The common belief is that the biggest hurdle to overcome for a start-up is securing funding. However, funding alone is not the key determinant for success for an aspiring entrepreneur with a great idea.
Accessing the right knowledge and networks, to support and scale a start-up’s vision, are the biggest determinants of success. It is the reason why African entrepreneurs typically rely on a network of technology hubs or incubators, to tap into collaborative platforms to share ideas, experiences and to promote local initiatives amongst aspiring entrepreneurs.
The growing popularity in these tech hubs, particularly noticeable in countries like South Africa, Nigeria and Kenya, is evidenced by the fact that, according to the GSMA (Global System for Mobile Communications), which represents the interests of mobile operators worldwide, the number of hubs in Africa has more than doubled over the past four years.
These hubs also encourage other stakeholders, such as corporates, governments, universities and investors, to tap into the ecosystem, and in doing so create a centralized point for the flow of knowledge and networks.
The more exposed a start-up is to existing companies, academics and governments, the more likely its innovations will be accepted and applied. Many well-known tech giants, like Google and Microsoft, have taken the lead in this regard and have benefited greatly from partnering with and unlocking the potentials in the African start-up space.
They continue to show their excitement for African innovation, with Google launching a research centre on Artificial Intelligence in Ghana and, at the same time, Microsoft announcing its intention to invest more than US$100-million in launching its first development centre. It is clear that African digital transformation is upon us, and the world stands to benefit through the scaling of African-originated innovation.
African companies to drive African innovation
We also believe opportunities are bountiful. Africa, like the rest of the world, needs digital nations to promote social and financial inclusion and to keep pace with (and surpass) the processes of the developed world, and in doing so grow African economies. However, we believe that in order to successfully achieve this, we need to include other well-established private-sector African companies within these tech hub ecosystems.
These are the companies that will improve the reach to consumers, stakeholders and decision-makers. These are the companies that will teach start-ups to dance to the unique rhythm of Africa by unlocking the synergies that will naturally exist in these partnerships by virtue of operating within the same continent.
In providing African governments and regulatory authorities with leading data, telco and Reg-tech solutions, we believe that we are uniquely positioned to house and scale digitally-enabled innovations to strengthen the development of ICT solutions and infrastructure for governments.
COVID 19, and the consequential heightened reliance on ICT technology, governments will look to tackle the increased need for transparency and regulation of the telecommunication industry, as well as the range of cybersecurity threats that will emerge.
Collaboration is key for digital transformation
Not only will collaboration enable pooling of resources and sharing of risks during the early stages of an idea (arguably the stage of a start-up that is often plagued with significant uncertainty), but it will ensure that the knowledge, networks and synergies that we have built over the past 20 years are appropriately leveraged so that great ideas can flourish and tomorrow’s solutions can emerge.
Collaboration will be the bedrock of our continent’s digital transformation journey.