Magazine article New African

Enterprises as Innovation Schools

Magazine article New African

Enterprises as Innovation Schools

Article excerpt

Africa's youth bulge may appear as a burden on the economy and at times, a threat to stability. But this need not be the case if technology-based enterprises, irrespective of their size, can be supported to function as innovation schools.

Entrepreneurship is generally viewed as the process of starting a business or organisation. It is a creative act that adds a new institutional element to the economy.

Much of the discussion about entrepreneurship focuses broadly on economic transformation and job creation.

But as stressed in the 10-year Science, Technology and Innovation for Africa Strategy (STISA-2024), enterprises play a vital role as loci for the search, adaptation and diffusion of technological know-how. In this regard, enterprises should be viewed as centres of technological learning and not simply sources of jobs and products.

Pursuing this view rests on the premise that technological capabilities usually accumulate in enterprises. This is because it is enterprises that develop internal competence to compete in the market. Technology-based firms are therefore the central actors in entrepreneurial ecosystems.

Most of the technologies needed to propel African economies already exist somewhere. The first step is therefore to develop a better understanding of market needs and embark on searching for existing technologies. This is indeed one of the key advantages of Africa's latecomer status. It is does not need to generate new technologies from scratch. But it needs to create new businesses.

Let us look at two examples. Mobile technology is now serving as a major technological platform for enterprise development in Africa. This sector was not driven by basic research and development or scientists but by entrepreneurs and engineers seeking to solve specific problems related to microfinance.

Entrepreneurs often operate by identifying a problem and searching first for an existing solution. In this particular case, the solution existed in the form of the basic function for transferring airtime. The bulk of the initial technical work involved making the mobile money transfer system secure and transparent.

Another illustration of how entrepreneurship leads to technology development is the response to the common inconsistency in mobile signal strength in Africa. Subscribers respond to this challenge by using multiple SIM cards. This leads to airtime often being locked up on a SIM card that is not in use.

The Chura start-up

A Kenyan software engineering, Samuel Njuguna, has developed a web-based application that "leaps" airtime between mobile carriers, enables it to be exchanged for cash and purchased in more user-friendly denominations. Called Chura (meaning frog in Kiswahili), the start-up was recently chosen as a finalist in the first Africa Prize for Engineering Innovation awarded by the UK's Royal Academy of Engineering.

The case of Chura, which was initially marketed to students, shows that it is the process of adapting technology to local environments inspired complementary research and development. The industry is now inspiring young people interested in developing new applications to seek further training in electronic engineering, mathematics and related technical fields. In effect, entrepreneurship led to technology development, which in turn is leading scientific and mathematical explorations. This process has also led to efforts to upgrade existing universities so that they can respond to the growing skill needs of the sector.

A similar scenario can be envisaged for other fields such as health. Africa faces major health challenges and relies heavily on drug imports. A large share of the imported drugs is either substandard or counterfeit. The engineering capacity needed to manufacture drugs in Africa already exists.

What is needed is to come up with viable business models that can facilitate the acquisition of manufacturing capabilities. …

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