13 September 2016

Disrupting Africa: how businesses, policymakers, investors and start-ups can embrace new technology to transform the continent

A digital revolution is underway in Africa with growing affordability, accessibility and untapped demand driving rapid advances across the continent. Digital disruption is well placed to support future economic growth in Africa, but the reach and benefits of this growth need to be more evenly spread.

A new report by PwC, Disrupting Africa: Riding the wave of the digital revolution, identifies ways in which businesses, disruptors and policymakers can embrace new technology while providing the infrastructure and capacity needed to ensure digital disruption is genuinely transformational in realising Africa’s economic potential.

For mainstream businesses, making products and services cheaper, more accessible and easier to use will unlock technology for the “global emerging middle”, which PwC estimates will make up $6 trillion of the global market by 2021. With more than two billion consumers, the global emerging middle (annual income $996 - $3,945) sits just below the conventional middle class in income terms, but its aspirations for quality, high performing products are in sync with higher segments.

Joel Segal, chair of PwC’s Africa business group, comments:
Technological disruption is transforming markets and societies across Africa in ways that wouldn’t have been possible even five years ago. This opens up huge and largely untapped commercial potential for domestic and international businesses. From the demographic dividend of a young and rapidly expanding population, to the fastest growing middle class of any continent – Africa has the potential to become a new powerhouse of production and consumption in the 21st century, just as Asia was able to do in the late 20th century. 
By broadening their outlook, businesses can dramatically increase their pool of potential customers, as well as giving a large proportion of Africa’s population access to products and services that would have been beyond their reach before. 3D printing is already enabling the manufacturing of everything from prosthetic limbs and precision tools in remote locations.
Businesses and policymakers can use advances in technology to break down physical barriers, improving local knowledge, infrastructure and access to remote communities. 

Drones offer one solution: PwC is developing a fleet of surveyor drones to help clients monitor infrastructure, manage construction sites and carry out insurance assessments. The drones are also being used to support town planning for SmartCities, such as Lagos city council, by mapping building and land usage, formal and informal, in urban areas. The data collected will help local governments verify property ownership, improve postal services and collect taxes on unregistered properties.

Joel Segal says:
Drones offer opportunities for both businesses and government to accumulate and share data, combining resources to better estimate where populations are concentrated, areas where deprivation is most severe and consequently where to target investment and services. 
While delivery drones don’t tackle the underlying problem of Africa’s need for better roads and transport networks, they can deliver critical medicines to remote villages in Africa while surveyor drones play a part in finding a solution.
Governments can also use technology to strengthen trust and combat corruption. One example is through using Blockchain technology which creates a permanent and unchangeable record of every transaction and information exchange between different parties. Policymakers could use this to provide transparent and tamper-proof records of public spending and official documentation.
Disruptors and start-ups can also benefit from collaboration, particularly through the sharing economy, which is a familiar concept in a continent whose economies are based on close personal ties and the pooling of resources.

While well-known sharing economy platforms like Uber are already established in Africa, there are now more and more home-grown rivals. Many thousands of Africans run one-person businesses, from driving taxis to repairing machinery and clothing. While their ability to sell their services previously depended on their local network and word of mouth, connectivity allows sole traders and small businesses to share their labour and capital with a much larger audience.

Joel Segal comments:
Disruptive technology in Africa has been most successful when it helps tackle local issues. Bitcoin which enables SMEs to make quicker, cheaper and more secure international payments that consumers trust has been very well received, as has distributed solar power that cuts the cost of energy and provides power to households off-grid.
The sharing economy model allows small African entities to trade beyond the previous confines of their locality and grow their businesses at a pace and scale that simply wasn’t conceivable before.

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