Apparently I wrote this in 2014, probably for some thing in grad school. Seems fairly coherent so, reposting.
In the course of my time here I have realized that there’s a significant information gap between the developed world and such frontier markets like Sub-Saharan Africa. Because of this gap, white spaces exist which can be serviced by existing businesses & technologies.
Markets in these region share lots of commonalities and this means innovation can scale rapidly as successful concepts can be easily repeated in new markets. The missing link is the information which connects local understanding of the environment and tacit knowledge of consumer behavior (not extensively or effectively documented) with existing technology which can address this need.
Research and analysis has shown that technology innovations like mobile computing, social networks, the cloud and analytics are radically changing the way business is being done. The impact of these can be exponentially larger in emerging markets that lack traditional structure as there are greenfields which these technologies can accelerate.
Absence of infrastructure also means that in some cases, technologies will need to evolve till they can be rapidly commercialized before diffusion can occur. An example is how Sub-Saharan Africa leapfrogged the fixed line phone era to catch up with mobile phones.
Innovation in this space will be different from the developed world: rather than cutting edge technological innovation, it will be business model innovation and application of existing technology in new ways to meet the needs of the market. Information/Communication technologies are of particular interest because they aggregate skill/expertise over distance and also help to get a handle on unique needs of the market.
A huge barrier to innovation is the scarcity of verifiable information on these trends. However this information is available, albeit in unconventional forms – tacit knowledge acquired over time by indigenes that understand the nuances of their environment yet have no resources to leverage this knowledge. Social media analysis over the last 5 years has yielded some insight into consumer behavior of the demographic in this region.
Opportunities include
- Providing new services and products to consumers in the region.
- Data/Information/Knowledge management to understand the environment.
In addition to product innovation, service & service delivery offerings are of particular interest because the dearth of reliable public infrastructure leaves individuals largely responsible for providing their own amenities.
Here are some developing trends which validate the existence of these opportunities:
- Population boom: Rising population has a growing number of youths moving into the labor market, meaning increased discretionary income and purchasing power. (70% of the Nigerian population is reported to be below the age 30 years)
- Cultural diffusion: Movie/Music industries are growing across the region, with Nollywood (Nigeria) being the 2nd largest film industry in the world in number of annual film productions.
- Growing awareness of potential value of market: GE, IBM, L’Oreal and large retailers like Walmart are all increasing their footprint across the continent with billion dollar investments. Advisory Firms like McKinsey, Ernst & Young are also opening new office in the region to meet the need for professional services.
- Increased diaspora return: As the region stabilizes, there’s more travel of indigenes between advanced economies. This influences consumer buying habits and increases desire for products/services available in other parts of the world.
- Growth of informal industries: Make-up artists, personal shopping, wedding planning & photography are all examples of informal industries which have already begun to tap into the needs of this growing middle class. Existing and emerging technologies are proving instrumental in structuring this off-grid economic activity, and reaching consumers directly
Summary
There seems to be a huge potential for product/service innovation in this region. With the right methods + understanding of the market, strong business cases can be made for strategic exploration of these growing opportunities by discerning organizations.
Markets to keep an eye out for: Ghana, Nigeria, Kenya, Uganda.