Some of the cleverest innovations come out of Africa – out of sheer necessity.
Toby Shapshak, publisher and editor-in-chief of Stuff Magazine, addressing the FNB Franchise Leadership Summit 2016, said that in developed markets individuals had the choice to adopt new technologies or not, but not so in Africa. “In Africa, there is simply no viable alternative. I call this ‘frugal innovation’, which is the purest form of innovation and is quite different to a Silicon Valley innovator developing yet another app to order fast food.”
The FNB Franchise Leadership Summit 2016 was held on September 1 in Fourways, themed ‘Disrupt – the future of franchising’.
He gave the anecdote of the executives of a major South African company in the 1980s who refused to buy then-new desktop computers because of their personal inability to differentiate a double mouse-click from a single one. That company no longer exists, said Shapshak.
Reasons for failure to adopt new technologies today are made for equally spurious reasons. “More than anything, what holds us back from doing something new, even if we can see the benefits of it, is simply sentimentality or nostalgia. When rejecting some new technology, it’s not that the old way was better – it’s usually that we’re nostalgic for the old ways.
“As a publisher, I’ve worked through all the different technologies and realised one cannot say one is better than another – they’re just different. However, some technologies do lead the way, and one is the on-demand concept characteristic of Cloud Computing, Uber and others,” said Shapshak.
“Pay as you go is arguably one of the most profound business models to have come along since the start of franchising (getting other people to grow your business). It wasn’t seen before the 1990s and it started here in Africa, because people had no access to banking accounts or even electricity. It was a model that therefore answered an incredible need – and it is also the trend of the future. The World Bank claims 1.5 billion people in the world don’t have access to electricity. From this need has evolved the current popularity of on-demand services.”
Shapshak says these 1.5 billion people will be accessing the market with a phone boasting the most basic features, but will have a built-in radio and torch, and a long-life battery. This is the market that disrupters will be eyeing in the coming years. “Disruption is not about expert thinking, but ‘outside’ thinking – someone outside the business or industry. Outside thinking is what each of us needs to be bringing to our businesses as these trends come down the line. To do otherwise, is just to be nostalgic.”
New technologies are putting the consumer at the centre of the business model – for real, instead of lip service.
“For instance, in San Francisco one could not get a taxi except at the airport. The attitude of the taxi companies was that consumers should be grateful if they stop for passengers at all. It was the same in South Africa where the taxi industry was more consumed with fighting violent turf wars than providing any passenger service. This was a ripe field for Uber to move into with technology which puts complete control into the hands of consumers. It is for this reason that Uber today has the sort of unique brand recognition that Xerox once had.”
The on-demand concept is in its infancy, but is about to revolutionise the entire world through one technology alone – driverless cars. “We are already at a point where a car does not need a driver. All that is stopping its broad rollout is the legal ramifications of having an accident, regarding who the liability sits with – the software developer, the car manufacturer or someone else. There are also some moral issues – if a pedestrian walks in front of the car is it programmed to avoid the pedestrian or look after the passenger?”
In developed economies, people have the choice to accept these new technologies or not – and many people for reasons of nostalgia will prefer the self-driven car which has hitherto been a core feature of both self-esteem and a modern cultural icon. Africa’s population most likely will not have that option and will take to new technologies as enthusiastically as the current generation have taken to mobile phones.
“The massive uptake of mobile devices in Africa reflects the fact that most countries never had a fixed-line service. A recent Deloitte report found that people in Africa look at their phones an average of five times every hour.” The innovation in Africa stems from the fact that these are people not weighed down by the baggage of old technologies.
The single biggest change that will occur during our lifetimes, most probably, will be the massive growth in the population of Africa compared to the rest of the world. This is a seismic shift which will alter the dynamics of this planet
“We are in the same position today as China was at the commencement of its growth surge, with the added advantage that the continent already has a stable and large middle class, by some measures.” Current technologies favour the development of Africa, as many of them tend to result in the cost of goods and services falling considerably. In fact, said Shapshak, most people are not aware of how much stuff is available for free online.
“Personally, I use a range of technologies that are potentially free. I host my email on Gmail, use DropBox instead of a file server, and publish our website on free service WordPress. Companies no longer need an expensive point of sale system, but can use a simple iPad based system,” said Shapshak. The costs of establishing a small business in Africa are therefore lower than ever.
“This is a new world, and entrepreneurs need to understand that if they do not disrupt themselves, somebody else will. Take hoteling: this has to have been the most entrenched business in the world, and even that has been disrupted by Airbnb. Mobile has become the single biggest enabler of the global economy, and it will be the single greatest enabler of the new African economy.
“My advice to all small businesses, is to consider how you can start doing couponing or vouchers in your business, and how you can interact with new people via social media. Mobile-based payment systems are the way of the future – be forewarned!”