Which area of the world boasts seven of the top 10 fastest growing economies since 2011? Latin America - nope. Asia - so ten years ago! The place to be for real growth is Africa, where private equity investments have doubled in just two years, and the US, Chinese and European governments are tripping over each other to pave inroads for their own corporations. In fact, the World Bank says the collective economy of the entire continent grew by 5.6% last year.
The first US Africa Summit, held in Washington DC in August, was widely
reported as a pivotal shift in perceptions of Africa as a place of war,
corruption, and disease to a place of economic growth, investment, and
grassroots innovation. Many suspect this shift in perceptions is due to a
realization among American politicians and business leaders that China
is far beyond the US in terms of market creation in Africa. Companies in
a wide range of industries are now forging ahead in Africa despite
persistent challenges to the business environment (e.g., infrastructure,
socioeconomic inequality, corruption, and regulatory obstacles).
Technology, pharma, media, and consumer goods companies reason that the
burgeoning young, urban consumer class, though still a minority in all
African countries, has more disposable income and the tools (i.e.,
phones and Internet) to buy what they want.
But where exactly are the greatest opportunities? Corporations are
approaching the market from the top-of-pyramid down to the middle class,
and the development community from the base-of-pyramid upwards. In
such an environment, the most potent opportunities are at the
intersection of corporate and development community interests.
For MNCs, this means designing and delivering digital and mobile
services with both a strong commercial value proposition and the
potential for social impact. As the development community seeks to bring
digital and mobile services to scale, there will be a real opportunity
for enterprise-grade solutions and platforms that deliver key financial,
health, agriculture, and public services. (At the US Africa Summit,
Power Africa was frequently cited as a model initiative.) For their
part, local governments are playing the tricky game of encouraging
investment without creating dependency or hobbling local industry.
Despite the increasing power of the consumer class, few companies will
succeed without the collaboration and support of key government and
local stakeholders. As Africa grows and flexes its economic muscle,
multinational technology companies will do better to be seen as a
partner than as a vendor.