With aging populations and stagnating economic growth, developed economies are looking toward Africa as a source of skilled labour and, increasingly, innovation. By Clas Neumann, senior vice president at SAP and head: fast growth market strategy, head: SAP Labs Network
Currently, 15% of the world’s population resides in Africa, but over the next 35 years more than half of global population growth will be in Africa. The continent currently contributes $2.4tn (or 3%) of the world’s nominal GDP, but this is expected to grow to $29tn by 2050.
Within this context, global companies are making huge investments into skills development and innovation on the African continent.
The skills question
While there is much debate around the impact of automation within the global workforce, it is inevitable that smart robots will take up bigger workloads especially within the industrial context. However, there will be a need for trained workers to interact with these robots.
For example, factories will equip workers with RFID chips that interact with robots by enabling custom user interfaces based on that worker’s skills and level of authorisation.
When these robots detect technical issues, a suitably qualified technician can be summoned from the factory floor before there is a loss in productivity or uptime. This interplay between humans and technology will become a defining feature of work in the 21st century.
The continued digitalization of the global economy will demand new skills. Universities – not only in Africa but across the globe – need to adapt quickly to teach students relevant skills. However, in many cases universities can take years to change a curriculum, by which time the information is already outdated.
To meet the demands of an ever-evolving digital economy, time and energy should be invested in establishing successful public-private partnerships. Initiatives such as Africa Code Week and Skills for Africa play a critical role by teaching relevant skills in a focused, streamlined and engaging way. In 2015, for example, Africa Code Week equipped 89 000 African youth with basic coding skills – in 2016, this figure will likely grow to more than 150 000.
A new technology wave
The need for new skills in Africa becomes pronounced considering the emergence of the Internet of Things (IoT). Over the next five years, African economies will be transformed by IoT-related innovation, as a multitude of sensors embedded in products, infrastructure, vehicles, industrial machinery and more become connected to data analysis capabilities, thereby unlocking value across the value chain.
The continent’s reliance on natural resources as a main economic driver means that industries such as logistics, mining and transportation are obvious choices for the first round of IoT innovation. Energy supply, distribution of life-saving medicine, and fighting the distribution of fraudulent products are other ways in which IoT technologies can play a vital role.
The innovation exchange
Africa’s start-ups are most famous for innovation in the fintech space (MPesa immediately springs to mind) especially as it relates to solving day-to-day problems. Here, local knowledge is key in understanding the exact needs of the market and tailoring solutions to directly meet those needs.
However, there is also an opportunity for international firms to contribute to the African innovation agenda. For example, Berlin-based company, Mobisol, creates off-grid energy solutions with e-payment facilities for African countries. To date, the company has secured more than 100 000 installations in countries such as Zambia and Uganda.
Large multinational technology companies can play a crucial role within this innovation exchange, mainly in three key areas:
- Firstly, they can provide access to new markets. SAP, for example, has innovation labs in 19 countries worldwide, mostly in emerging market innovation hotspots. This gives smaller players direct access to a global market that would be very costly to reach otherwise. With this also comes a global perspective – while start-ups often focus on solving problems that affect them directly, either at a city or country level. However, there may already be a solution to address the challenge that they are simply not aware of. Partnering with a larger organisation gives start-ups a global context that can make their solutions more marketable and successful.
- Secondly, large companies can offer start-ups a global customer base. If a concept appeals to a large organization, they can easily introduce it to their customers across the globe.
- Lastly, again with the SAP Cloud offering as an example, start-ups gain access to a powerful global cloud platform that enables them to quickly develop and deploy solutions and scale as and when necessary.
It is evident that woman in Africa have a special role to play in the field of entrepreneurship innovation. Africa takes the lead across the world when it comes to female entrepreneurs, boasting impressive numbers such as 40.7% in Nigeria and Zambia and 27.9% in Ghana. These figures have been validated by the success of the “Women in Tech Africa” event series around the globe.
Driving the African innovation agenda is imperative for our business. By taking a partnership approach, SAP can offer start-ups tech, expertise and access to markets and customers that can fast-track their success and enable a new wave of African innovation.
Investing in the continent’s future is imperative if we wish to remain competitive – and relevant – throughout the 21st century.