Innovation has become a constant topic in Africa, but there has been an emphasis on doing things and less time has been spent thinking about the impact of what’s happening. RUSSELL SOUTHWOOD, CEO of Balancing Act, tries to understand what it means.
Everyone involved in innovation in Africa likes to hear a warming story. As one of the presenters at Fail Fest London put it last week, there’s got to be an image showing a girl looking into a computer screen that puts a golden light on to her eager, upturned face.
Africa’s Innovation agenda has two threads – one donor driven and the other focused on private investment – but as with much else on the continent, each is intertwined with the other.
So whether it’s a donor driven competition or a private investor, there are always parable narratives that capture the spirit of what everyone is hoping to achieve. Whether it’s farmers using phones to get better crop information, a young women buying insurance on her mobile or a young start-up winning a competition prize, these seductive narratives work a bit like the fraudster’s pitch.
I want to be told that innovation is changing lives and Africa is on an upward curve but the danger is that we all end up believing our own propaganda. Because it becomes widely circulated in the media and on social media, it doesn’t necessarily mean it’s true. So what follows is my attempt to try and take apart what might be working from what isn’t.
Start-ups in Africa will tend to work in the larger markets where there are sufficient consumers with mobile phones and enough disposable income for them to get user numbers. Without user numbers, there will not be continuing investment and/or more grant funding. On this basis, start-ups are more likely to be successful in Ghana and Nigeria and Tanzania than they are in Mali, Mozambique or Malawi to take three smaller economies at random.
Start-ups have the same problems that larger companies do in Africa. It’s hard to trade across national boundaries, something that Mo Ibrahim has made one of his constant themes. Many country markets are simply too small but operating in more than one small country is challenging. The absence of common market rules across countries makes the continent a nightmare even for well-endowed multinationals. So it is perhaps hardly surprising that the majority of African start-ups stay in a single country market.
Multi-country roll-out requires capital and some degree of patience and neither of these are in steady supply at the moment. There are a couple of good examples like Africa Internet Group and One Africa Media but these are the exceptions rather than the rule. Despite the constant drumbeat of the Africa Rising tune, there is actually a shortage of investors for African start-ups.
There have been several straws in the wind. Kresten Buch’s pioneering accelerator 88 Mph has pulled back from further work as it tries to find ways to get money out of the start-ups it’s already invested in. Overall, the number of exits from the African start-up ecosystem has been tiny. Another incubator operator told me that only one deal was on the table when they when they went looking for investors so it was not a long queue. For the few bigger international investors, Africa remains a tiny part of their investment portfolio.
Mbwana Alliy of the Savannah Fund (an accelerator and seed fund) told me that almost everyone he was able to raise money from had some connection with Africa and that connection was often personal: for example, they had been on holiday to the continent. Investors are not sitting on the West Coast of America saying I wonder what’s happening in Silicon Savannah. Indeed quite a few would probably be hard-pressed to find it on a map.
Worse still, the current international Internet boom will soon reach its bust: there have been at least two of those since I started following events on the continent. Even worse still, the constant currency devaluations in major markets like Ghana, Kenya, Nigeria and South Africa mean that the value of any investment and its revenues erodes along with the currency.
But let’s put the money to one side for a moment and just look at impact. Start-ups have been responsible for creating a new atmosphere of innovation and are changing how things are going to be done. Although it’s not explicitly stated, all of the good energy and ideas generated by African start-ups is supposed to rub off on the wider society. And they have gone a long way to helping change the mood music in some countries about what can be done if you’re young and have an idea.
Also as Bastian Gotter of Spark told me, the start-ups can offer young Nigerians the chance to break out of the need for connections, patronage and bribery. When you’re able to connect directly with a consumer market, you don’t necessarily need those things. However, both of these things – the rub-off effect and breaking away from patronage structures – may be long-term goals that will take more than ten years to achieve.
So let’s look at some of Africa’s bigger problems and see whether start-ups and innovation can bring about change. Nairobi has gone from being a busy city to one where when there are heavy rains, there is complete gridlock. People sleep in their cars overnight. Despite all the new road-building, even when it’s not raining it can take 2-3 hours to get across the city. This is a productivity issue on a massive scale. Has there been innovation from start-ups or Government to tackle the issue?
There is the ever-dependable Twitter feed @Ma3Route but that simply is about negotiating chaos not changing it. There is much that can be said about Uber (and other local Kenyan versions) but they are unlikely to crack Nairobi’s gridlock. I’ve picked on Nairobi but there are a dozen other African cities with problems that are as bad. Car sharing? Public transport? Rail systems? Park and ride? Bicycles? Electric vehicles? You know the answers to these questions.
Energy is a pressing problem of huge scale for the continent. It’s also a productivity problem as every time the power goes off, people can’t work. Furthermore, everything has to be constantly rebooted and breaks down more often as a result. Local diesel fuelled generators are hugely inefficient.
VC4Africa has an admirable accelerator scheme for energy start-ups. Microsoft has put money into a real wind technology innovator Saphon Energy. But against the scale of the task, these are but tiny gnat bites on the elephant’s bottom. Akon Lighting is a fascinating
initiative (see Energy below) but it is barely off the starting blocks. Where are the micro-grids? The energy distribution players? The tech innovators proposing to import Elon Musk’s Powerwall batteries or their less efficient equivalent from China?
Education is a key part of any different future in Africa. Almost everyone who has been through the system – in whichever country on the continent – will tell you that rote learning does not breed people who can analyze and problem solve. Teacher absenteeism remains high. Projects like the late-lamented Mark Bennett’s iSchool in Zambia are heartbreakingly good. There is also a stream of impressive young African innovators teaching STEM skills through things like robotics and coding. But none of this has yet really entered the bloodstream of African education systems.
I don’t want to bludgeon the point but the impact of innovation so far has been largely marginal on anything that Government delivers. Yet each of the three areas above – transport, energy and education – offer enormous opportunities for Innovation.
Making All Voices Count – an initiative to encourage social start-ups to promote transparency and accountability – is a great initiative. But it relies on trying to persuade a deeply unproductive public sector to react to pressure to become more productive for its citizens. Where is the encouragement for the public sector to innovate? To find ways of spending public funds more effectively? Where are local city innovation schemes? The innovation schemes that get local government to promise and deliver?
But this is not just a public sector issue for many of Africa’s larger private sector companies still have not yet got the innovation message. Some banks have taken initiatives to encourage and acquire fintech start-ups but these initiatives are the exception rather than the rule. M-Pesa started the whole thing and they are trundling along behind. Many of the traditional private sector companies in Africa remain stuck in working practices that went out of use elsewhere in the 1960s and 1970s.
Why does productivity matter for Africa? Let’s just take one example that runs like a thread through all the issues raised above. Africa absolutely must have Internet bandwidth that is cheaper than elsewhere globally because it does not yet have the volume of people who can afford it. There will only be a critical mass of users if lower bandwidth costs are achieved.
In terms of data infrastructure, Sub-Saharan Africa is probably one of the most expensive places to operate globally: diesel deliveries for some base stations in one West African country require a boat and hand wheelbarrow for delivery. For data to become cheaper, the mobile companies (or someone else) need to be innovating new ways of delivering bandwidth more cheaply. Bandwidth is the petrol that fuels innovation and without cheap bandwidth innovation in Africa will be stillborn.
As Harambe’s Matthias Reichwald wrote in Issue 70 of Innovation in Africa:” I see enormous potential for the continent to take the lead in designing disruptive systemic solutions inspired by the vast infrastructure vacuums that still exist in most countries. Whether these are innovative ways to deliver health care and education, groundbreaking ideas in agribusiness and transportation or unprecedented ways for more inclusive governance or approaches to produce energy. Africa’s advantage is that it can leapfrog in areas where the West is dealing with heavy legacy structures which impede innovation”.
The challenge now is to turn this analysis into projects that fundamentally change Africa rather than simply provide seductive success parables that give their promoters a warm glow.
* Russell Southwood is CEO of and founder of Smart Monkey TV. Subscribe to Smart Monkey TV on YouTube
CES: So long, and thanks for all the beer!
Last week, the Las Vegas expo showed off its fun side with state-of-the-art technologies for enjoying beer, writes BRYAN TURNER
From craft beer-making machines to robots that pour beer, CES had more beer than usual in Las Vegas last week. And even free beer if you found the right stand. Stampede’s saloon-style booth offered beer to visitors who tried out its latest drones, virtual reality, and other gaming products. No beer tech, though.
Here are some of the beer technologies that stood out:
LG HomeBrew – Craft beer made at home
LG’s HomeBrew craft beer-making machine, debuted at CES 2019, brings the brewing process home thanks to single-use capsules, a self-cleaning feature, and an algorithm optimised for fermentation.
Like a Nespresso coffee machine, the beer maker uses capsules, which contain malt, yeast, hop oil and flavouring. At the press of a button, LG HomeBrew automates the whole procedure from fermentation and carbonation to ageing. A companion app lets users check HomeBrew’s status at any time during the process, from their handsets.
The beer machine not only offers a simple way to make craft
Designed with discerning beer lovers in mind, HomeBrew allows for in-home production of batches of more than 4 litres of beer in a variety of styles. The following five distinctive, flavoured beers are available now:
- Hoppy American IPA
- Golden American Pale Ale
- Full-bodied English Stout
- Zesty Belgian-style Witbier
- Dry Czech Pilsner
The only catch? It takes about two weeks to make, depending on the beer type.
“LG HomeBrew is the culmination of years of home appliance and water purification technologies that we’ve developed over the decades,” said Dan Song, president of LG Electronics Home Appliance & Air Solutions Company. “Homebrewing has grown at an explosive pace, but there are still many beer lovers who haven’t taken the jump because of the barriers to entry, like complexity, and these are the consumers we think will be attracted to LG HomeBrew.”
Click here to read about the party speaker that holds beer and robots that pour beer.
CES: Alienware gets Legend-ary
At CES in Las Vegas last week, Dell’s Alienware released a family of high-end, thin, light, and affordable machines for both amateur and professional gamers – and a new identity.
Alienware marked CES 2019 as a brand milestone with the debut of a new design identity, Alienware Legend. It aims to set a new bar of excellence for what gamers want most – performance and function. Alienware says it evaluated multiple concepts and chose one that was the biggest and boldest departure from its current look.
Alienware Legend, says the company, stays true to the brand’s core design tenets, taking cues from its deep roots in sci-fi culture and its early industrial designs, to distinguish the brand from the rest of the industry. The new Legend design is optimised with cutting-edge thermal cooling technology to achieve and sustain overclocking power, improved AlienFX lighting, and ultra-thin screen borders. It also unveiled a new “three-knuckle hinge” design that reduces the overall dimension while creating a stronger assembly, all combining to yield a better gaming experience.
“We’re excited to come to this year’s CES with some truly groundbreaking products, next-gen software and strategic partnerships that will bring more people to experience PC gaming and advance the industry,” said Frank Azor, vice president and general manager of Alienware. “The legend design answers the call for more and better from our gaming community, and the new G Series laptops will make PC gaming even more accessible to those looking for high-performance gaming at a cost they can appreciate.”
Click here to read about Alienware Legend in action with the Area-51m and m-series laptops