1.0 – Innovation for Development

1.0 – Innovation for Development

Across most African capitals, a new movement is taking place. Young people with their chisels, laptops and hammers are congregating and working to grab the future in their own hands. They are the makers with enclaves of hackers, enthusiasts, hobbyists, artisans and indeed people with the mindsets to revolutionize Africa from within, by doing something rather than just talking. They understand that Made-in-Africa or “started in Africa” will only happen when Africans begin to transform their ideas into products and services that address not only local challenges but possibly global ones. They are inspired by their environments, and they innovate in scarcity providing an edge over others that do not readily understand the African way of living.

The Makers Movement is huge and it is the reason innovation hubs and makerspaces are sprawling around the continent. It is promising, and as more people embark on it, and necessary support provided, a new dawn of unprecedented development and productivity across key industrial sectors will emerge. Indeed, Africa is changing from within, anchored by the brainpower of its people. Paul Kagame, the venerable President of Rwanda, while speaking in Cape Verde during Africa Innovation Summit challenged his colleagues that “we can learn from each other in Africa and from other countries, such as successful ones in Asia, but we should also continue to look within our own communities for “home-grown” innovations to solve our development challenges.”[1]

The centerpiece of new changes in Africa is the realization that mines of knowledge will always triumph over mines of gold in enabling sustainable economic developments. In other words, knowledge and its application will become a major factor in production and will facilitate better opportunities. When people utilize that knowledge in producing services and creating products, the lives of citizens improve because of job opportunities, increase in tax revenue and other benefits associated with enterprises. When the Rwandan government embarked on a mission to provide fast internet services via fiber-optic cable, it was working to tap into the ingenuity of its citizens.  As the engineers dug the land to lay the cables, and not explore minerals, the country was extending the reach of its marketplace, not just within Africa, but internationally. And when it brought Carnegie Mellon University, a storied top technical global institution, to Kigali, the government made it clear that it was interested in building a nation that will use brainpower to elevate the welfare of its citizens. Rwanda is prospering, attracting people, companies and more ideas.

Today, knowledge is the blood in the nervous system of the wealth of nations. The most prosperous, the most stable and the most economically sustainable are not necessarily those built on the bipods of minerals and hydrocarbons. Though natural resources remain important in global trade and industry, the lack thereof is not catalytic in diminishing the competitiveness of any nation. Knowledge drives innovation, and can cushion any nation, that invests in its accumulation and application for sustainable development. Africa with its history as an inventive society where indigenous knowledge is prevalent has a unique competitive advantage in the world. The continent enjoys rich diversity, youthful demographics, and growing frugal innovators who are obsessed with African interests and needs over mere following of the western models.

Innovation, according to Oslo Manual, is the “implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, work place organization or external relations”. It provides products and services to institutions and citizens. It goes beyond ideas because it strives to meet a need in the society. Innovation through knowledge defines the new wealth of nations and is at the core of what separates the economic status of nations—developing and developed.  It is the main instrument that defines the modern balance of economic power. Indeed, innovation drives development which according to the United Nations Declaration on the Rights of Development is a “comprehensive, economic, social, cultural and political process, which aims at the constant improvement of the well-being of the entire population and all individuals on the basis of their active, free and meaningful participation in development and in the fair distribution of benefits resulting therefrom”.

The correlation between innovation and development is well established. People that lived before the last five centuries were largely poor. Yet, ideas were created as people that lived therein contributed in developing some of the important concepts in physics and chemistry we treasure today. There were emperors and kings but on average the standard of living was low and generations of people that lived apart did not experience major improvements in human welfare. That indicates that economic growth was stagnant up to late 17th century as shown in Figure 1.1 using the GDPs of the two largest global economies at the moment.

Figure 1.1: 2,000 Years of GDP (Source: Bloomberg, World Bank)

 

But as technology began to be created and subsequently diffused into nations, human productivity improved, and humans started to live longer. At that time, man was able to transition from being an inventive society to one that innovates—making products and services for the marketplace. Across societies, there is a positive correlation between quality of life and innovation, technological or otherwise. Technology creates wealth and facilitates the formation of different industries. It provides the platforms to make new products and services to meet the needs of consumers. It helps to accelerate economic developments by enabling innovations in product development, processes, marketing and other ways. Yet, innovation is not simply synonymous with technology because it embraces many elements.

Innovative governance could manifest in better services to the citizens. It may even drive more technological components. Nevertheless, the point is that when government makes quality decisions, developments in many forms can arise. Few decades ago, few in the world knew of Kenya. But within the last few years, through visionary policy under a bonded triple helix that brought the industry, policymakers and schools together, the country has become a national innovation engine in the information and communication technology (ICT) sector. The nation took down barriers in banking that provided a fertile ground for experimental mobile banking solution which succeeded. It pushed the universities to stay closer to its industry enabling schools like Strathmore University to provide important IT courses to its students. It did all necessary to support the ecosystem with improving broadband services through its IT regulatory institution, Communications Authority of Kenya. The results are positive: Kenyan startups like Zatiti (mobile e-commerce), Sendy (delivery service), Craft Silicon (software development), and Angani (cloud computing) are growing.

Innovation is the key driver of global economic growth. And specifically, technology innovation has redesigned international competition in all major industrial sectors by enabling speed, efficiency and capacity in business processes and operations. It has become the most important enabler of national wealth creation and productivity. As the world moves towards knowledge-based economic structures and data-driven societies, made up of networks of citizens, organizations and countries, mutually and interdependently linked globally, the impacts of technology and innovation will remain central in commerce, industry and culture. Both in the short and long terms, this global technological progress—improvements in the techniques by which goods and services are produced, marketed, and brought to market—will remain at the heart of human progress and development.  And the pace of technological innovation will continue to accelerate, disrupting markets and industries, along the way.

The good news is that African startups, out of makerspaces and college dorms, are joining this disruption bandwagon. They may not be potent as the one Strive Masiyiwa exerted in Zimbabwe through Econet Wireless, when he took up the state telephony monopoly, and later unleashed the wave of mobile telephone services boom across Africa. Strive showed in Zimbabwe what could happen with mobile telephony which the state monopoly had stifled for decades. Yet, young Africans have trajectories and are showing the powers of innovation when allowed to manifest. Ghana’s Paysail is taking up the payroll management sector dominated by big-name accounting and management firms that have not changed for years. Paystack, a Nigerian startup, which helps companies and individuals make digital payments, has the backing of some elite investors and is on a mission to change the African financial sector. George Bakka was less than 20 years when he started Angels Finance Cooperation in Uganda to catalyze entrepreneurial ventures in his community. By 19 years, Yaw Duffour Awuah was running Student Aid Plus to offer student loans to possibly seed an industry that has refused to emerge for decades. Across regions, innovation is alive, though they are pockets because many more are left behind. Identifying and nurturing more of these innovators will accelerate development.

Increasingly, the world is experiencing major new dimensions in knowledge acquisition, creation, and dissemination. The trend has become a virtuous circle where new ideas facilitate new processes and tools which in turn drive new concepts. This progress is advancing globally anchored by innovators committed to providing solutions to business and economic challenges. It is a global movement by legion of entrepreneurs and innovators driven by pursuit of solutions in building new sectors, disrupting traditional industries and discovering new markets. It is not just businesses which are disrupted, nations are vulnerable. When innovations bring substitutes especially in commodities as the case with shale gas and hybrid vehicles, nations that depend on crude-oil for their foreign exchange earnings will experience shocks in currency,  welfare and overall economic growth, unless they have diversified their economic systems.

In Africa, the drums of innovation are not new. There is a redesign as technological innovation continues to facilitate the process of socio-economic developments across the continent. The anchor driver, ICT, continues to offer new ways of exchanging information, and transacting businesses, efficiently and cheaply. It has also changed the dynamic natures of all major industries and provided better means of using the human and institutional capabilities of nations in both the public and private sectors. But innovation in Africa is not just about ICT or technology, Africa is experiencing new concepts in all major industrial sectors, from banking to agriculture, from finance to entertainment with sustainable structures. Even the process of governance is innovating as reforms reshape markets and make them more agile, open and competitive. The entrepreneurial energy in African capitals arising out of mobile telephony is a testimony to the reforms in the telecommunication sector. Africa leaders already understand the impacts of improving reforms in the continent. Nkosazana Dlamini Zuma, former African Union Commission Chairperson, noted during the 9th Annual African Economic Conference (AEC) that “investments in skills, technology, knowledge, and innovation will ensure democratic and responsive governance that can deliver effective public services and facilitate universal access to basic services, such as food and nutrition, water and sanitation, shelter, health and education”[2].

Innovation is very strategic if the new found optimistic exuberance in Africa with its accelerating economic opportunities is expected to continue. Innovation will help mitigate the impacts of trade shocks and welfare loses, associated with the cyclical boom and bust of commodities, which dominate the foreign exchange earnings of most African nations.  The continent’s capability and competitiveness can come by elevating innovation as engine of growth and development. An innovative Africa will attract and seed a new economic architecture that will provide shared prosperity to the citizens. There are many elements to innovation (see Box 1.1); the continent is already playing in most forms though it needs to scale at a faster rate.

For that prosperity to come, Africa must retool its technical educational system in quality and quantity, boost productivity, and advance science and technology. A peer-review innovation funding mechanism in the academia can help improve the chances that African geniuses will be discovered from obscurity. The continent has to invest in infrastructure and become enablers in creating and diffusing appropriate technologies in its economies. From agriculture to energy, technology has a lot of promise. With a solid business environment, innovation will open a path for Africa to improve the value of its natural resources. That is important if the continent can host innovators that will use knowledge to create products and services of the future.  Despite the obvious impact of the Internet and acceleration of digital processes, physical geography matters and attracting talents in the region will help in creating jobs that will reduce double digit youth unemployment.

The best sound bites to hear right now, across African cities, must be the ones with waves of innovation. The young people want to dance the makossa of innovation because the glory is development. African leadership must deliver the pillars to make the sound louder.

Box 1.1: Different Forms of Innovation

Innovation is important in commerce and industry owing to its specific capacity to improve competitiveness and position institutions for success. There are many kinds and forms of it: disruptive or breakthrough innovation is one that changes the basis of competition in an industry — for example in watches, Swatch change the basis of competition from accuracy to fashion; sustaining innovation is one that perpetuates the current dimensions of performance —for example, Tesla making electric cars that can go further before recharging; and incremental innovation focuses on small improvements on existing products, services and processes.

Disruptive innovation is the most consequential as it redesigns markets through transformational impacts enabled by the technologies. The evolution of smartphones like iPhone has been termed disruptive. It brought new social systems like the sharing economy made possible by mobile apps. Also, the wealth created by Apple is well documented besides the economic and political consequences its impacts have exerted on the economies that hosted the industries its technologies have disrupted (think of job losses in Nokia home country Finland).

Innovation can also be examined within the direction of change: while discontinuous innovation breaks paths to move to significantly new directions, continuous innovation follows a sequence without deviating from the status quo.  When innovation takes place in a form that it draws insights that lie outside the boundaries of the firm, it is called open innovation and when the system is highly internally controlled and sequestered from outside, it is said to be a closed innovationHybrid innovation where companies keep their internal R&Ds with controlled intellectual properties but open some R&Ds components to get insights from external stakeholders has become common.

Recently, innovations by the billions of global citizens living on less than $2 per day (the poor) and stakeholders of traditional form of knowledge mainly from the informal sector have been categorized as grassroots innovations or “bottom of the pyramid” innovations. Sustainability innovation combines sustainability — environmental preservation, protection through renewal, maintenance, and sustenance — with innovation. For inclusive innovation, the focus is reduction of inequality — poverty, disability, distance and others — and driving growth that considers every stakeholder. This is very close to social innovation which while considering owners/investors equities in enterprises also pushes for serving the society and improving the lot of the poor. And finally, when innovation is led by users — user firms, user communities, end users — and not by suppliers or manufacturers, it is user innovation.

Then, there is Sankofa innovation which is “reach back and get it” type of innovation that emphasizes continuous improvement by looking back and learning from past experiences.


[1] Paul Kagame (2014), “Leading Innovation”,  African Innovation Summit, Cape Verde

[2] Nkosazana Dlamini Zuma during the 9th Annual African Economic Conference in Addis Ababa, Nov 1-3, 2014

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4 thoughts on “1.0 – Innovation for Development

  1. “Then, there is Sankofa innovation which is “reach back and get it” type of innovation that emphasizes continuous improvement by looking back and learning from past experiences.” Well said. There has never been a more promising period for the continent, unless one factors decolonisation. Truly, there are lessons we can learn from the ingenuity of the past and contextually apply to our challenges today. Sankofa Innovation is not just for technology but must also spread in our socio-economic, political and individual spheres.

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  2. Well said Professor Ndubuisi Ekekwe. There is no doubt that Sankofa innovation will unleash Africa’s potential. President Paul Kagame understood this and did not hesitate in laying the infrastructural foundation for his country and one of the benefits could be seen in the early arrival in Rwanda of a great institution like the Carnegie Mellon University. Rwanda, will surely start exporting skill manpower soon! It is a learning point for some African countries that have been motivated to lower their academic standards for sectional and primordial sentiments. It is a shame that despite being in the same time zone with most of the EU countries, almost all outsourced jobs in EU still find their way to India for obvious reasons.

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    1. Brilliant commentary Ugo. Our continent needs to do more to unleash our capabilities. As you noted, making sure that our youthful demographics works for us through capabilities so that jobs can come home is strategic.

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