Trends and Entrepreneurship in Africa

Context

The African continent is a very special place to do business. As a entrepreneurial economy, Africa can sometimes be overlooked, but then it takes the world by storm; seizing opportunities that were originally labeled as a setback, like the cellphone economy demonstrates[1][2]. With Africa being very much in the global eye now, I would like to take a look at opportunities where the absence of structures that frame thinking — like capital-intensive infrastructures — offers free thinkers the opportunity to truly innovate.

Structures that frame thinking

In the context described above, I mention structures that frame thinking. A structure that frames thinking is a structure within which one is (unconsciously) constrained to remain with ideas, inventions, etc. A business that operates in a place where the source of communications or power can be taken for granted and simply itemized in a budget, has no incentive to think about solutions where communications or power are not a given.

No infrastructure, no limits to innovation

Similarly, the new payment systems growing across the continent are a true solution. They are for example affordable because they do not emerge from banks with decades of investment in expensive security-compliant computer systems whose budgeted deprecation and costly upgrades can spread the total cost of the system over a longer period of time than the lifetime of the technology itself.

Why African Entrepreneurs succeed where global companies don’t.

This is an interestic fact. A great piece of research [18] examines the fate of international companies failing to establish a presence in African markets and the reasons for their withdrawals in contrast with domestic entrepreneurs (and some other international companies) who sucessfully establish a business presence in Africa.

  • Firstly, they assume that the narrative of the growing and emerging African markets means the growth of an African middle class. This has proven not to be true, unlike in strong Asian emerging economies.
  • Secondly, they come into the country with the aim of making money off that middle class, not with the aim of developing the country.

How does Africa go global? Or even pan-African?

Kutlwano Ramaboa from the University of Cape Town wrote a fascinating article discussing the role of MBA schools in Africa [20], and although applied to MBA programmes, it illustrates the question quite well. African MBAs that teach skills that are applicable and relevant in doing business in Africa, where most business are small, operate in coutries that are ranked low in the World Bank’s “Ease of doing business” rankings [21], where inequality is high and skills scarce, won’t probably score highly in global MBA rankings. In those rankings, the highest scoring programmes train people to run large corporate entities, some larger than certain African economies even. Considering that the global MBA rankings are often used by prospective MBA students to choose where to apply to, this is an interesting conundrum in the African context both in terms of education and of executive hiring.

References:

URLs functional at time of writing. Contact me if they are not working anymore and you wish to read them, I have saved each of them to pdfs.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Carolina Ödman

Carolina Ödman

Assoc. Prof. UWC Physics & Astronomy. Associate Director Development & Outreach at IDIA. EPFL and Cambridge Alumna. ❤️ my family. On a cancer journey