When you hear about Tesla, what comes to mind? Electric cars I believe. A green vehicle that runs with electricity, has falcon wing doors, smooth and quiet. An example of a modern day environmental innovation.
Environmental innovation is the creation of products and processes that will ensure sustainability. It entails producing and transforming technology applications to adhere to terms of environmental sustainability. In summary–innovation is an idea transformed into practicality.
In recent times, there seem to be a shift in inventions and innovations. Green products and technologies are the inventions and innovations that have been on the rise and in-demand in recent times. Data on Tesla vehicles, according to Statista, indicated that Tesla’s vehicle deliveries reached between 367,000 and 368,000 units in 2019. The Smog free project, Zéphyr Solar and The Green Building Initiative (GBI) are initiatives highly regarded all over the world. We also have B-Droid, an initiative aimed to create robotic bees that can pollinate crops– a technology poised to change the agricultural world. All these are highly appreciated due to increasing risks and undesirable consequence of manufacturing firms on the environment. Although many eco-sensitive firms and initiatives are springing up, it seems Africa is being left behind.
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In Africa and Nigeria in particular, fintechs and agric-techs are flourishing (in 2019, Interswitch was valued at $1 billion, while Paystack was recently acquired by Stripes for $200 million dollars), while eco-tech companies are struggling to woo the kind of crowd the aforementioned startups have. In terms of investment, venture capitalists most times, doubt the future of such businesses. Potential investors believe that a business must show signs of scalability. And yes! Every successful business needs a scalable business model, and eco-tech companies cannot be an exception. However, many potential investors feel that such businesses and their business models might be unscalable. An untrue assumption.
Environmentally conscious and eco-tech companies, I believe, seem to be the best/ most suitable business for scalability. If such companies are given the financial backing and conducive environment, they could bring more ROI (return on investment) compared to other tech companies. Not just that, if well planned, eco-tech companies could be the solution to the environmental challenges e.g. waste menace that has beset Africa. Examples could be taken from brands that modified their business models to a more sustainable one.
Many top giants in the apparel & accessories industry e.g Adidas and Nike have remodeled their business models to sustainable business models. They also created effective business strategies to ensure it works. Adidas for example brought out a “three loop strategy” focused on ending plastic waste, ensuring a circular economy (an economy that focuses on reducing, reusing and recycling raw materials), and production of sustainable clothing mainstream. With this, Adidas has postulated that by 2024, they will eliminate virgin polyester in their products and go 100% recycled (Sina Port, 2020). Nike on its own has ensured their business model revolved around minimizing environmental footprint. This has led them to recycle approximately 30 million pairs of shoes since 2010 (Nike, 2010).
The sustainable business model built by Adidas has seen the demands for its sustainable products rise considerably, contributing in part to the company’s 10% increase in revenue to $6.4 billion in the last quarter of 2019. Meanwhile Nike posted a a revenue of $10.6 billion in the first quarter of 2020. A $1.49 billion difference to the $9.11 billion estimated by business analysts (Kim Bhasin, 2020). And it is estimated that the global sustainable footwear market size which was valued at USD 7.5 billion in 2019– is expected to grow at a compound annual growth rate (CAGR) of 5.8% from 2020 to 2027. Not a bad financial return you will agree. And, when it comes to raising seed capitals, many emerging eco-tech companies in some regions of the world are not doing badly either.
Some eco-tech startups in regions such as Europe and other developed nations are getting access to funds through investors, and patronage from customers due to the increased consciousness of environmental sustainability. Companies such Solarkiosk, Artic Sands, Freight Farms are typical examples. Freight Farms for an example, has raised about $12 million from venture capitalists and have sold in excess of 250 shipping-container farms in more than 15 countries. All these within its 10 years of existence.
The above illustrations should indicate that eco-tech companies are poised to flourish as time goes on, and it will thrive more in Africa.
Existing companies in Africa should tweak their business model to a sustainable business model, making it a disruptive business model– a Fosbury flop approach. It is the new technique.
As a potential entrepreneur or or an existing business owner, using an environmental innovation as part of a “double play strategy” would not be a bad idea. It is certain that it will be a recipe for success. Adidas did it, Nike followed and others are tweaking their models to follow suit. Tesla is also a huge success.
If it can work in other regions of the world, why not Africa? Environmental innovation is the new goldmine in every corner of the globe, including Africa.
“It is no more Innovation of Nations–It is now Environmental Innovations of Nations”