Emerging Futures: Opportunities in Digital Africa

In January 2011, my friend Dirk Knemeyer, Founder of Involution Studios, an internationally reknowned app design studio, suggested I write a series of articles on the imminent opportunities in technology and design emerging across the African continent.

That first article in the series “Opportunities in Digital Africa” was published on 22nd February 2011. Below, I’ll link to each article in the order it was published along with some key snippets to give us food for thought and reflection. Three years seems like a good time to refresh our view of the emerging future we saw back then and compare against the trends and activities of today.

Africa: The Next Frontier

What kind of opportunities are there? Who are these new customers? Where are they and what do they want? Is it possible to step away long enough from the overriding concerns of chaos, poverty, alleviation and humanitarianism to consider a long term business strategy in a sustainable manner? Certainly, yes. Google, for example, has been investing in a significant African presence with offices in Ghana, Senegal, Nigeria, Kenya, Uganda and South Africa. Needless to say they see the potential of this burgeoning – and no longer dark – continent. Acumen Fund’s East African Manager Biju Mohandas was recently quoted as saying:
“This whole region is growing dramatically. The nature of conversations is changing from that of a continent in shambles, and that requires aid, to a continent that is becoming the next big growth area in terms of economic interest.”

From OLPC to VC: Africa leapfrogs the digital divide

The advent of undersea cables directly linking even small landlocked nations like Botswana to high speed fibre optics means costs are halving as nations come online at top speed. Until now, Botswana had been dependent on expensive and slow satellite internet; now they see opportunities for e-governance policies to be implemented as well as benefits to education and the economy. For African nations, e-governance allows them to deliver services via technology into places where setting up physical offices would be difficult. In fact, building physical administrative infrastructure is so difficult and expensive that e-government has become attractive enough for states such as Kenya to assign high level personnel and resources to the task.

Challenges present opportunities: innovation in Africa

A vacuum exists in areas as diverse as transportation systems, distribution networks, basic raw materials, tools and spare parts. Lack of affordable financial devices, such as loans or overdraft facilities for small- and medium-sized businesses wishing to expand without waiting to accumulate sufficient cash or accessible consumer credit, is a constant hurdle for a population of irregular employment and often no bank account. Risk and uncertainty in this environment are considered endemic leading to high interest rates, closed business networks that operate on trusted referrals, and a healthy skepticism that a system will work as advertised. Yet, for the enterprising, these are the very environmental conditions that offer immense opportunity for creative ingenuity and innovation.

Mobile in Africa: from SMS to Android

A shift away from SMS-based solutions is expected, as user habits change and Internet-based, apps-driven services become more popular. It’s clear that an appetite for mobile content exists and continues to grow but it is not yet the mass market norm. That day, however, is not too far away.

The competition is increasingly about the customers, and what tasks they seek to complete on their devices. Simply building the right apps/content/service to meet that need won’t be enough: it will become a matter of getting the purpose, the platform and the price just right for each demographic. Market creation and customer education will drive each other in tandem.

Software in Africa: more, better, different

Today the integration of the mobile platform and conventional computer systems is a growing business. Text based interaction on the SMS and USSD platform will remain the primary need in the near term as mobile apps, while flexible and convenient, have yet to establish a foothold to the same extent as basic services.

Many software applications which take “always on” connectivity for granted as part of their evolution may not be wholly realistic in Africa for quite some time to come. The software industry reflects the uneven progress seen recently in the previous article on mobiles – pushing the envelope with new ways of transacting everyday activities like paying wages by SMS, even while dealing with challenges of piracy, localization and inadequate computing infrastructure. Still, it is this environment in which some of the most creative and innovative solutions for low cost technology deployment have been tried and tested.

Investing in Africa: challenges and constraints

To successfully enter the African consumer market on a tech platform with content and services means there is a need to reconsider three aspects:

  • Business models, which benefit from cash received upfront rather than implementing a costlier billing process and collection cycle  
  • Customers, who may not have the purchasing power for impulsive downloads (sharing and exchange are far more common) 
  • Services and applications, to leverage the differences in the environment while providing value to both the end user and the company.

Solving the puzzle of African opportunity is eminently achievable, it just requires thinking and acting in ways that are likely new and perhaps uncomfortable. The rewards, however, are well worth the effort.

February 2014, where are we now with what we saw emerging from the African digital landscape three years ago? 

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