There are interesting developments underway in Africa. The vast continent repeatedly made news in 2014 for being home to seven of the world’s fastest growing economies, and drew interest for having a large part of its growth driven by the Small & Medium Enterprise (SME) sector. This latter tidbit is crucial. It signals a move away from ‘natural resources-led’ growth in GDP to something more sustainable, and in a manner that can help reap demographic dividend of a continent where 60% of the population is less than 25 years of age.
A significant number of these SMEs are social innovators, taking head-on critical, persistent challenges faced by income-poor populations in the region. They are creating indigenous products / services, building local supply chains, hiring local people and tapping into local markets at the base of the economic pyramid. A bulk of these social innovators also imbibes a crucial tenet of modern leadership – a business philosophy of sustainability.
For example, among the bright young SMEs we have met in the past year is Sun Culture, an enterprise that sells solar-powered irrigation systems. It defines performance in more-than-revenue terms, to the tune of “USD 400,000 in economic impact, delivered in terms of labor savings, input savings and enhanced crop yields.” Sun Culture makes irrigation systems but thinks of itself as a vehicle for improving farmer income and agriculture output. Africa has emerged as a hotbed of exciting social innovations, which in turn, are playing a crucial role in enabling inclusive growth opportunities and development.
However, there isn’t adequate local capital to support a lot of these investment needs, resulting in the need for bringing in blended financing including grants and foreign aid that can support the creation of a robust entrepreneurial ecosystem, before it becomes ready for commercial money to be deployed. Outside of money, success stories have emerged from creative collaborations for SMEs with large corporations and government, both on the procurement side as well as on delivery side.
We’ve seen powerful examples of government collaboration with WeCyclers which works with local municipality bodies in Nigeria to help households extract value from waste. WeCyclers starts creating solutions by first evangelizing the problem. In the words of the entrepreneurs, “One of our biggest challenges with recycling in Lagos is that people just aren’t used to it.”
Hear more from them through the short hyperlinked videos. And finally, with a lot of cultural similarities, shared social challenges and a similar spirit of finding shrewd ‘life hacks’, Africa offers a window into how SMEs and entrepreneurs are leveraging market gaps, reaching out to customers and navigating infrastructure and regulatory hurdles, in other emerging economies like India, Brazil and Mexico. In fact, there is an innovation transfer already underway with well-known innovations like M-Pesa.
So visit Africa if you are keen to learn more about exciting social innovations, witness how creative collaborations are playing out, have an interest in investing in its local markets or if you want to get a glimpse of how other emerging economies are driving creative solutions.
Charisma Murari is a digital marketing evangelist who loves encountering path breaking, new ideas – online and offline. Working in the entrepreneurial social development space with Intellecap, she is constantly inspired by astute innovators who are turning widely held notions upside down. She tweets at @CharismaMurari