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Why Customers Rule In This Internet Age – Information Is A Click Away

By
Tekedia Editors
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0

Few decades ago, firms ruled supreme in getting the best profit margins out of their customers. It was an era of optimizing for the maximum possible profit. Market was very opaque because information was very expensive and untimely. Customers could not track price changes in real time. Even when they get the comparative prices, the distance to the other shop was a huge barrier. So in most cases, customers would knowingly pay high prices because of the need to save time.

 

This was the era when airlines maximized prices on tickets. When you leave your house to a travel agent, you have made up your mind to come back with a paper ticket.  The travel agent was serving the airlines and the higher you pay, the better is his business.

 

Though he may offer some choices among the competing airlines, there was no major price pressure on him since at the end you would be forced to buy from him. Why? You may need to drive another twenty minutes for another travel agent. Under this model where you either buy from the airline offices or travel agents, your choices are very narrow and the airlines were in control.

 

Then came the Internet era; from Priceline to Expedia, the customer for the first time had the power to make decisions based on price without even leaving the house. Go online; describe the trip and airline choices will roll down; usually, the cheapest one comes first. This market is a commodity business, especially for an average traveler. Who cares the airline you flew from Boston to Baltimore? Without that brand loyalty, the cheapest ticket always wins. The travel agents have lost the power to control the price. The airlines suddenly must compete on price resulting to lower profit margins.

 

There was price-war and it was very combative in the industry. Personally, I still think that the greatest competitor to airlines is the Internet. Without the Internet that destroyed the pricing model, they would still be doing much better compared to how they are doing today. At least, the Internet allowed the low-cost carriers to have direct access to customers. The Internet was the most important factor that enabled these low-cost carriers to get into the industry. It provided a platform through which they connected to customers directly and competed on price effectively.

 

As we celebrate the 25 years of .com, we will continue to see major transformations and disruptions arising from the Internet.  Bookstores are going to become history in the next few years. The model of buying books and setting price for the local community is dead. The local community is no more ‘local’; they can buy from any part of the world. The local bookstore is competing with shops in China, India, Canada, etc because Amazon and ebay have provided platforms on the web that make such possible.

How To Incite Innovation And Sustainable Economic Prosperity In Nigeria

By
Tekedia Editors
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1

Nigeria is on the move. It is making progress. Though there are many challenges, the new team of economic experts assembled by the President is poised to redesign the nation and move it to the path of prosperity. In this report, Tekedia offers insights and perspectives which if considered could put Nigeria towards growth and sustainable progress.

 

We identified industrial clusters in the nation and we recommend that Nigeria focuses the development efforts around them.

  • Transportation and logistics
  • Health systems and healthcare
  • Business services
  • Energy services
  • Agriculture and food processing
  • Chemical products and plastics
  • Entertainment and tourism

 

Nigeria must come with a diversified strategy where each state or region must develop a plan that will work for it. We cannot run a fix all approach because each of the regions has different strategic opportunities. So, we want to examine  the development efforts based on specific regions.

 

Transportation Hub

The middle belt of Nigeria offers a opportunity to build a transportation as they link the South and North. Plateau state should be transformed into a hub that can enable an advanced transportation network in the country. Most of the luxury buses pass through this region of middle belt and most of the goods move through them. With better facilities, the state can become a domain that will generate revenue and boost economic growth in the nation.

 

Industrial Clusters

Tekedia recommends efforts to facilitate formation of industrial clusters in the state.  Harvard Business School Professor, Michale Porter, coined the term “industry cluster” on the idea that once an industry achieves a critical mass of businesses, it will give the region an advantage over other areas in the given sector. That way other businesses will come to that region.

 

Tekedia sees the necessity of developing modernized clusters in Aba for shoe, Kano for leather , among other areas. The government must carefully look at all the regions and enable the creation of the right ecosystem that will help them succeed. Lagos has taken the position for ICT, we can get Sokoto to become the powerhouse of the solar systems development sub-sector. Other regions will focus on sectors they have natural competence.

 

It must be emphasized that jobs base camps must be developed to have the right manpower in the nation. The country must understand that each of the regions have unique opportunities. Expertise must be locally matched.

 

Top federal universities in the country must be anchors for new ideas and growth and the nation could play a role to invent and sustain the clusters.

 

Energy and Sustainable Energy

Our universities could play major roles in this area. There is also an opportunity in the Northern part to help jumpstart solar technology business. Government should expand the focus of government labs to making them innovation platforms where research outputs are taking to the market.

 

Healthcare

Nigeria has an opportunity in this sector. The national university teaching hospitals must be anchored to drive innovation and build a cluster of health focused private companies in the region. We need to get beyond services to encouraging local product development and design.

 

Inciting Innovation

Nigeria must develop and implement what is called INCITE Initiatives. INCITE means INnovation, Commercialization, Investment, Technology, and Entrepreneur. We recommend a modernized and better executed StepB Nigeria project that does not focus on federal agencies and institutes to any organization with innovation capacity, including private. Tekedia recommends $500 million to help drive this project, nationwide. Entrepreneurship and commercialization of ideas must be paramount in any plan.

 

Friendly Ecosystem

Nigeria remains a toxic place for business because the cost of business is high. Nigeria needs to provide basic amenities to help companies have opportunities to prosper. Also, the IPR must be strengthened so that companies can do real creative works with assurances that their works will be protected.

 

Foreign Direct Investment

Nigeria has a duty to make the nation to be seen within the lens as a good place for FDI. Understanding that most of the states are not economically viable without government support, Nigeria needs to invent a new process to make sure that development is not localized within Lagos, Abuja, Ibadan, PHC and other states. We have to use local tax incentives and laws to expand FDI into other regions of the nation.

 

Reviewing Regulations

Nigerian business ecosystem is tough. More companies collapse within ten years than succeed. Multiple taxation is common and excessive bureaucracy is rampant. While it takes few minutes to register a company in some advanced nations, it needs more than three months in Nigeria.

 

This is an executive summary developed by Tekedia Intelligence.

Why Knowledge Is Africa’s Best Resource – Pushing Towards Knowledge Economy Is Important For Sustainable Prosperity

By
Tekedia Editors
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2

Africa remains the world’s poorest inhabited continent despite the abundance of minerals scattered across the continent. Despite marginal gains over the last few years, many African nations are underdeveloped. War, corruption and tribalism remain major factors that undermine Africa’s progress.

 

Nonetheless, before the recent global economic meltdown, Africa has recorded decent growth proving that there is a prospect for change. New reforms driven by private sector lead capitalism is shaping the continent. However, the continent still depends so much on minerals and extraction and there is no sight of a knowledge driven economy very soon in the continent.

 

A knowledge economy refers to an economy of knowledge focused on the production and management of knowledge in the frame of economic constraints where knowledge is a product. It can also be referred to as a knowledge-based economy where knowledge is considered a tool; i.e., the use of knowledge technologies such as knowledge engineering and knowledge management to produce economic benefits.

 

This is a strongly interdisciplinary area that involves economists, engineers, scientists, sociologists, among other. Presently, Africa lags behind in the Knowledge Economy Index (KEI), a benchmark used to measure the level of knowledge infusion in an economy (worldbank.org/kam). According to World Bank data, KEI and GNI correlate and African nations need more work to catch up with developed nations.  There is a high level of relationship between KEI and growth in any economy; growth tracks KEI. The higher the KEI, the higher the economic growth; in other words, a nation or continent that improves its KEI will surely eventually see increase in growth. KEI captures education, innovation, technology, among others.

 

Two major factors drive the knowledge economy. They are globalization, and information and communication technology.  The former which enables markets and products to be available at more global level for more spectrums of producers and buyers, the latter, enables the connection and electronic interdependence of the world. It can be argued that the knowledge economy differs from the traditional economy in several key respects (Wikipedia, 2009):

 

  • The economics are not of scarcity, but rather of abundance. Unlike most resources that deplete when used, information and knowledge can be shared, and actually grow through application. Also, it is non-rival, meaning that the consumption of information by customer A does not preclude the consumption of same information by customer B. ‘You can eat your cake and have it’ in this case.
  • The effect of location is either diminished, in some economic activities: using appropriate technology and methods, virtual marketplaces and virtual organizations that offer benefits of speed, agility, round the clock operation and global reach can be created or, on the contrary, reinforced in some other economic fields, by the creation of business clusters around centers of knowledge, such as universities and research centers. However, clusters already existed in pre-knowledge economy times
  • Laws, barriers, taxes and ways to measure are difficult to apply on solely a national basis. Knowledge and information “leak” to where demand is highest and the barriers are lowest
  • Knowledge enhanced products or services can command price premiums over comparable products with low embedded knowledge or knowledge intensity
  • Pricing and value depends heavily on context. Thus the same information or knowledge can have vastly different value to different people, or even to the same person at different times
  • Knowledge when locked into systems or processes has higher inherent value than when it can “walk out of the door” in people’s heads
  • Human capital — competencies — are a key component of value in a knowledge-based company, yet few companies report competency levels in annual reports. In contrast, downsizing is often seen as a positive “cost cutting” measure
  • Communication is increasingly being seen as fundamental to knowledge flows. Social structures, cultural context and other factors influencing social relations are therefore of fundamental importance to knowledge economies.

These characteristics show that new ideas and approaches are required from policy makers and leaders in order to evolve and sustain a knowledge economy in Africa. It will be very fundamental for economic growth in the continent.

Africa Needs Reforms In These Six Areas To Transition To Knowledge Economy

By
Tekedia Editors
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0

Generally, Africa in the last few years has witnessed some economic and social reforms geared towards setting the continent on the path of development. The continent still depends on minerals and hydrocarbons. To move the continent from its dependence on these minerals, reforms on the following areas must take place:

 

  • Sustainable growth in the real sector of the economy
  • Physical Infrastructure: Power, Energy & Transportation
  • Agriculture
  • Human Capital Development: Education & Health
  • Security, Law and Order
  • Combating Corruption

 

The world is experiencing new dimensions in knowledge creation that is global, dynamic, fluidic, adaptive and innovative. Those that respond creatively with reap the benefits of world trade.  This underscores the importance of knowledge driven African economy. Figure below shows that Africa lags well behind other global trade blocks in major factors used to measure the knowledge economy index (KEI). Improving those factors will determine the abilities of African Union member states to transform into global economic powers.

 

Figure: KEI for Africa, USA, Europe and Central Asia

 

The Knowledge Indexes were designed as an interactive tool for benchmarking a country’s position vis-a-vis others in the global knowledge economy. It was created by the World Bank Institute using the Knowledge Assessment Methodology (KAM). (wikipedia)

 

How To Get A Good Job – And What Startups Hiring Managers Must Do To Get Best Talents

By
Tekedia Editors
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0

The economy is still struggling to bounce back to pre-recession state. Unemployment is high. In some countries, there seems to be no model to explain how many unemployed people could find jobs. In Freetown, it is reported that youth unemployment is around 70%. In the U.S., general unemployment figure  is close to 10%. In Nigeria, the graduate unemployment approaches 30% – 50% (our number). So how can someone get a  job in today’s economy.

 

Tekedia has compiled these simple steps to help, especially for those that lost their jobs in the last recession and hoping to return back:

 

  • Demonstrate mastery of your field

You need to show you know your job despite the fact you were cut during the last recession. This could come by writings and other ways you can use to showcase your knowledge of your industry.

  •  Motivate yourself

Nothing gets people elevated in life than being self-motivators. They like to work and get things done whether anyone is pushing them or not. They have expertise in figuring out solutions to tough problems.

  • Agility matters

Can you manage different things or even positions as the organization’s needs evolve? Can you become a strategic thinker today and tomorrow you will be an executor of plans. Can you lead operations today and tomorrow be asked to produce a ten year vision summary.

  •  Keep records

You have won laurels in your old job or career. Are you keeping them? Can you demonstrate that you have done any solid and commendable job before? You need to show those awards

  •  Result oriented

You do not rest until a solution is found for a problem. You are a very resourceful person in figuring out solutions.

 

What Hiring Managers Need To Do To Get Talents

And for the hiring managers that are looking out for talents in the open world, there are many qualified people there. All you need is to look and you will find them. The key thing is knowing how to discover them.

 

We have listed below some tips that can help any hiring manager get a team of stars.

 

  • You need to hire fast because timing matters in startups.
  • Do not neglect referrals. Call and find out what those claims are.
  • Be very objective and be focused when hiring. Do not be distracted by subjective things as non-performance related things. If you like men on black suits and the best candidate has a gray one, do not disqualify him because tomorrow the black suite guy may never wear it. He might have borrowed it and the gray one may have many blacks ones.
  • Do not take people serious. Break them with jokes. Find out if they can adapt in case your company needs them to do new things. In this age, nothing is static. Firms continue to change as competition demands. You need mobile and adaptive manpower to stay in business.
  • Business wins by hiring the right people. It comes down to relevance and character. He seems to be talented, but right there he has no character. He has excused you thrice to pick a call. No decency. He may not be organized and your projects can suffer. Is he/she relevant? Yes. But does he has character to meet that deadline at very demanding pressure. No. You will have a decision to make.
  • Remember, not all people that come for interviews have interest to work for you. Some have offers but want to honor your call. It is also left for you to convince them. Do not be deceived that it is a one way system. Some just want to get the free hotel stay and the next day confirm an offer with another company.
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