Lauri Elliott

Originally posted at htp://www.afribiz.info/?p=2137.

Shashank Bengali of McClatchey Newspapers wrote “Africa is gripped by one of the greatest population explosions ever recorded” in a recent article entitled, “Africa’s Perilous Baby Boom.” In fact, while it is widely reported that India’s population (1.6 billion projected) will surpass China’s population (1.4 billion projected) by 2050, Africa will beat both with a population close to two billion according to the United Nations Population Division.

Bengali paints a picture of the horrible conditions under which and into which many children are born in Africa.  However, the problem is the conditions not the population growth.  Africa is a continent that has vast resources, which if managed effectively, can sustain a booming population.  In addition, Africa as a region has one of the lowest consumption rates globally when compared to developed countries. 

In fact, this population boom is a tremendous global business and economic growth opportunity.  Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, shares the world can no longer expect U.S. and Western households to drive global economic growth.  Developing markets like China, India and Africa are the future economic growth engines.

This shift sounds frightening to many in the West, but no one has to lose.  Businesses and entrepreneurs globally need to shift their strategy to account for this phenomenon.  Remember, the United States served as a major channel for China and other countries to grow their economies.  The pattern does not have to change, but the roles the actors play.  Africa, China and India can be used to drive economic growth in the United States, Europe, and elsewhere, in the future.

 

Part of this shift requires a change in the way the African population is viewed.  C.K. Prahalad, in “The Bottom of the Pyramid,” points out that businesses have traditionally treated the poor and disenfranchised as victims instead of consumers.  Businesses tend to devalue these populations without taking into account the current and future value of these markets, if developed.  Businesses have the opportunity to create their own consumer markets while solving endemic problems like poverty.

Once businesses see Africans as consumers, they need to consider the challenges faced by their consumers and those challenges in serving them, including those painted by Bengali.  The key is to design a business model accounting for and overcoming these challenges. 

For example, Africa lags far behind in broadband coverage, yet the World Bank noted that broadband coverage contributes to economic growth.  Also, if it is available, it tends to be expensive.  Two companies, SEACOM and O3B Networks, have taken on the challenge to cover Africa with affordable broadband within five years.   SEACOM has already landed in over ten countries in Eastern and Southern Africa.

In addition to the potential, businesses need to consider the importance of timing and position.  Now, is a perfect time for many businesses to position themselves in the African consumer markets.  Nations recognize this.  While China looks to Africa resources, it is not the only reason.  John Lee, in “China Woos Africa” points out that China is positioning itself to take advantage of the growing (in size and income) African consumer market. 

 

In another example, could the potential in the African consumer markets be one reason the U.S. government is shifting from supporting food aid in Africa to investment in agricultural systems?  Remember, part of the role of  diplomatic missions in foreign countries is to further the interests, including economic, of a nation.

On a final note, the issues and problems of Africa continue to provide fodder for the media more than the potential of Africa.  But there is a hidden message in all of it for entrepreneurs.  Entrepreneurs will recognize the challenge of Africa not as perilous or problematic, but as potential and powerful markets.

This is an article written by Hilton Tarrant and myself as part of the ICT in business sector series for Brainstorm Magazine in South Africa.

There is no question that the healthcare sector in Africa represents a huge challenge and opportunity. The question is how, and how well, ICT will meet the challenge.

Most African countries have a critical shortage of healthcare workers, and the majority of African healthcare systems are low-ranked internationally, according to the World Health Organisation.

Dr Dirk Koekies, Chief Executive Officer of GeoAxon, states plainly that the challenge is “creating a healthcare system out of nothing, which can deliver quality basic primary healthcare services to those without it”.

While this situation is a critical challenge, it presents a tremendous opportunity for ICT in the health sector. The opportunity is particularly good in the mobile sector (mHealth) due to the penetration of mobile phones on the continent.

The United Nations 2009 report mHealth for Development says: “Mobile phones reach further into developing countries than other technology and health infrastructures.”

One mantra for mHealth is “make available the right information at the right place at the right time and in the correct form,” according to a 2008 Rockefeller Foundation report.

This mantra, when actualised, translates to several benefits, according to Tyson Greer, CEO of Ambient Insights.

First, clinicians and patients can make more informed and intelligent decisions. Second, real-time data is provided for communication, consultation and notification. Third, mHealth increases efficiency and speed of care, and increases productivity of healthcare workers. And finally, it provides on-demand access to information and continual learning for healthcare professionals.

There is a unique opportunity to provide ICT-based products and services to the private healthcare sector.

Firstly, because private sector healthcare already represents a good portion of services provided to Africans compared to public healthcare. And secondly, African governments are using private healthcare providers to augment and enhance public healthcare systems, which are overtaxed.

This creates a sizable opportunity for ICT firms. Specific business opportunities in mHealth, according to the mHealth in Development report, include education and awareness, remote data collection, remote monitoring, communication and training for health care workers, disease and epidemic outbreak tracking, and diagnostic and treatment support. Koekies also says that developing centralised, electronic medical information records is a low-hanging fruit opportunity.

GeoAxon is delving into business opportunities presented in diagnostic and treatment support. Its “Tele-medicine Doctor in a Box” allows a doctor to examine a patient over the internet, using devices the patient interacts with locally. These devices transmit data, which would normally be assessed in a face-to-face consultation with a doctor, remotely to the physician.

While mHealth seems to be gaining momentum, it still has several challenges. mHealth is still in the pioneer stage with many projects in pilot, but little empirical evidence to prove its impact. Koekies indicates that funding for innovative solutions is still difficult to come by. And while the technology may be there, the ecosystem for the mHealth sector is still immature.

Recognising that eHealth*, and mHealth, are still emerging markets in Africa with high potential, ICT firms might want to first look for low-hanging fruit opportunities and those that leverage its strengths.

Big opportunity

The healthcare market is huge. A recent report by research and consulting outfit Markets and Markets says the healthcare IT systems market will be worth $53.8 billion in five years’ time.

One of the major areas of growth in the space is tele-medicine. This is by no means new technology, with policies put in place and applications created over a decade ago.

A new push, by networking giant Cisco, is through a pilot programme demonstrating that tele-medicine is real and it works. The so-called HealthPresence programme saw remote clinics linked up in Aberdeen, Scotland and San Jose, California.

This service provides what Cisco terms “care at-a-distance over the network”. It uses Cisco’s TelePresence teleconferencing technology, with patients and physicians able to see life-sized images of one another. The system also collects physiological data from a variety of linked devices such as a stethoscope, blood pressure cuff, pulse oximeter and other diagnostic equipment.

The Aberdeen trial started in January last year and found that 90 percent of the patients who used the technology were satisfied with the experience, 95 percent said the visit felt confidential and 93 percent said they would recommend it.

“In almost every case, we could accurately identify the degree of urgency and make a diagnosis,” said Dr James Ferguson, national clinical lead for the Scottish Centre for Telehealth.

He added: “Cisco Health- Presence can enable us to deal safely and effectively with 90 percent of the cases we see.”

The Medical Research Council is currently running five separate tele-medicine projects around the country.

Obviously bandwidth constraints mean that the implementation of tele-medicine is difficult in both South Africa and Africa. In addition to bandwidth, the MRC identifies other obstacles such as the lack of easy-to-use, robust diagnostic instruments and no dedicated tele-medicine centre to act as a hub for tele-medicine.

The deployment of terrestrial fibre networks in South and East Africa, as well as the commissioning of Seacom, has helped solve the bandwidth problem, however.

At a recent exhibition, Seacom showcased healthcare teleconferencing applications, and earlier this year at GovTech 2009, Moses

Mtimunye, then acting CEO of Sita, said that in the near future, similar technologies to Cisco’s TelePresence “will make for commercially available tele-medicine projects providing people in rural areas with world-class healthcare services”.

The national Department of Health says its long-term goal is to “make tele-medicine live up to its potential as a valuable tool to improve access to high-quality and cost-effective health care services in South Africa”.

Beyond structured implementation of tele-medicine systems, Cisco believes that HealthPresence could mean a revolution: “Instead of making a dash to an urgent care facility or emergency room, what if you could use your television or other networked device to connect with a medical centre?”

Cisco believes this is not fantasy, it reckons it could become reality within the next three to five years.

*eHealth is the use of ICT for health services and information.

This article is one in a series about ICT in different sectors for Brainstorm Magazine of South Africa.  It was co-authored with Hilton Tarrant.

The mining sector has been slow in its uptake of technology, but the global economic crisis and long-term issues are serving as catalysts for adoption.

The outlook for the mining sector has radically changed due to the global economic crisis. This boom and bust cycle has left many mining companies considering ways to manage operating costs in order to remain economically viable. But this is not the only challenge the sector faces, according to Deloitte’s report, Tackling Trends 2009: The Top 10 Global Mining Issues. In the long run, the sector must find ways to remain sustainable amid the sea of legal, social, economic and environmental issues.

These challenges actually present opportunities for the ICT sector because technology can manage complex systems, streamline processes, reduce costs, and improve efficiency and productivity. Consider enterprise resource planning (ERP) software, which coordinates the entire mining value chain, from locating to divesting minerals. Think of radio-frequency identification (RFID) and global positioning system (GPS) technologies, which track the movement of minerals and equipment.

There are also examples of technology specific to the mining sector. The oil sector is demonstrating the potential of ultra-deep water drilling technology, which drills and extracts oil from greater water depths.

The technology is creating and extending market opportunities to the industry by accessing previously unreachable deposits. For example, new oil operations were recently announced off the coasts of Ghana and Sierre Leone.

Dr Greg Baiden, director of Penguin ASI and a global expert on automation, says: “Automation in the mining industry will follow similar trends to those in the manufacturing industry.”

It starts with a person using an automated machine to handle multiple tasks and eventually evolves to artificially intelligent, autonomous machines. Baiden says the future includes intelligent machines that can heal themselves.

For now though, automation has not reached critical mass in the sector. Large mining companies like Rio Tinto and BHP Billiton are considered early adopters. Teleoperations, or telerobotics, is the operation of a machine at a distance.

Penguin ASI’s wireless technology, which communicates with robotic equipment under water, gives a glimpse of the potential of telerobotics in solving some of the mining sector’s sustainability issues. This wireless technology will enable mining companies to extend the life of their mining operations on land. Imagine flooding mines with water to double their mining depth, and using telerobotics equipment to run the operations.

One natural result of using better technology and innovation is cost reduction in the mining value chain. This will eventually serve the economic development of Africa well. As the cost of mining decreases, it allows smaller mining firms to establish themselves.

The business opportunities for ICT providers in the mining sector can be found in the corporate, technical and value chain systems. Historically, ICT providers focus on mining as a niche. However, as enabling technologies provide broader benefit to the sector and new mining entities arise, there are increased opportunities for the ICT sector.

Mining of Data

Also, the mining sector faces serious challenges to its long-term sustainability. ICT firms, which identify gaps in the value chain and create solutions that close the gaps, leverage the value chain and contribute to sustainability, will carve their own space.

While there is undeniably a lot of technology used in the underground oreextraction part of mining, more focus is currently being put on the processing side of productions.

MD of Softline Accpac, Jeremy Waterman, says that “inherently it’s a reasonably simple business”. With mining, “you’re putting a whole lot of resources in and you’re taking production out”.

But there has traditionally been a disconnect between production and what Waterman terms the “financial side of things”, particularly among smaller miners. This has been a cause of frustration within the industry, and a number of solutions now seek to marry the two elements.

This is a classic implementation of an enterprise resource planning (ERP) system, but up until recently, “marrying the elements” was simply absent.

“In the past it was tended to be done more on a kind of matchbox,” says Waterman. “You had a whole lot of costs and you had a lot of production and you subtracted one from the other and you made a profit.”

Nowadays it’s a lot more complicated. Waterman describes how workflow management systems can be used for control, and to “capture production data that’s coming back” into the system. The real difference is made by the layering business intelligence on top of these systems.

Ugan Maistry, business unit head of Mining & Manufacturing at EOH, agrees: “Over the years, there’s been this maturity in terms of process-control and automation systems to be able to execute. There is now maturity in business systems like ERP.”

But over the past few years, Maistry says there is a newfound maturity around the systems in between the parts. He calls it ‘mining execution systems’, and describes it as very similar to manufacturing execution systems.

He likens many of the processes in mining to inventory management. “Previously, people only knew what they had and what they produced if they actually stopped their operations and took stock.”

“Questions like, ‘Where is the actual material in their value chain?’” adds Maistry.

He says some customers have been spending considerable amounts of money in the last two or three years on exactly this: business intelligence systems, which he likens to “enterprise manufacturing intelligence”.

“But,” says Maistry, “what they haven’t explored is how to extract value out of that information.”

This is the next frontier. Now, “our customers need to mine the data, and I’m talking end-to-end,” says Maistry. “It’s about looking at information in context, not just in terms of volumes and quantities, but in costs as well.” Waterman takes it one step further: “We [South Africa] are trend-setters in mining as a whole.

“There’s been an explosion of midcap miners, and that is where we’re seeing the real growth.”

Aside from ERP and workflow management systems, the back office sees similar ICT trends to those in pretty much every industry. Working costs are being rationalised, with single vendor outsourcing one way of saving money.

Licensing rationalisation is being looked at, says Maistry, and providers like Microsoft and SAP are “coming to the party.”

I had the great opportunity to share about tapping the power in social networks for business and careers with a group of Harvard graduate students on November 19, 2009. It was sponsored by the African Caucus student group of the Kennedy School of Government at Harvard University.  I’d like to give special thanks to Julia Mensah for the opportunity.  Below is a summary of the workshop.

I, myself, am a task-oriented person.  This means I travelled the hard road to learn the significance of people in getting results and business success.  My training ground was Africa for the past five years.  While expertise played a part in my success, relationships also played a significant role.

When I started to research the notion of social networks, I learned that social networking was even important for Bill Gates.  When Gates started his firm, his mother used her social connections in Seattle to provide Gates access to key business people.

One of my biggest observations is that social networks are very important when one is initiating a new idea, whether in business or covering social issues.  So, just as we spend time developing the next greatest idea, we need to focus on developing the ecosystem that will support the idea through its lifecycle. 

Cultivating your network is an intentional activity.  It’s easy enough to understand because we know that relationships take work. 

The workshop highlighted practical means for cultivating your network.  For example, sharing useful information with people is a simple, but effective way to provide value to others.

To learn more, you can download Tapping into the Power of Your Network (297) presentation.  You can also listen to a recent radio show, “Power Push:  Using Social Capital for Success.”

While the world is struggling with economic crisis and social unrest that will result, Christians need to understand the times.  The Christian community was forewarned of this crisis, but many refused to listen.  If you did not listen before, listen now and learn about the good news of what God is doing.

John F. Kennedy said that the Chinese word ensemble for “crisis” means both danger and opportunity.  Paul spoke of a great door of opportunity open to him, but having many adversaries. (1 Corinthians 16:9)   Opportunity and obstacles go hand in hand.

The shaking and shifting we see occuring in world systems is the change of an age, of a generation.  While disturbing and unsettling, we need to focus on living in the new season, the new age.

If we see situations through God’s eyes and we trust Him, we have peace.  The Word says that there will be stability in our times.  During these times, we are the agents of stability as we are used as God’s vessels to bring His will to the earth.

The new age is the Vision Society.  A society based on the kingdom of God.  While the world systems are shaking, this kingdom is arising from the shadows to bless God’s people and bless the nations of the earth.  This is an age of strength for the true body of Christ.  This is an age where we will tangibly be the head and not the tail.  There is no reason to fear what is happening, but every reason to have faith in God.

This post is about sharing what I understand of both the sacred and secular view of this new age.  First, you can read another blog post, “Vision Society: An Overview,” to acquaint yourself with how the Vision Society will appear in the world (secular).  Second, you can watch or listen to the teaching, “Vision Society: A New Age,” to learn the spiritual (sacred) strategy and structure behind the Vision Society.  You can access this teaching below.  May you  be richly blessed.

Video Teaching
Audio Teaching
Slides

This is a part of the ongoing series I write on ICT across sectors for ITWEB/Brainstorm Magazine South Africa.  This article is on manufacturing.  It was a collaborative piece with Hilton Tarrant who focused on South Africa while I focused on the African continent and global trends.  Enjoy!

Originally posted online at Brainstorm Magazine.

ICT is a key enabler for the manufacturing sector. It’s transforming the global manufacturing arena while opening opportunities in the African market.

Africa lags behind its global counterparts in industrial and manufacturing development. Even when comparing the percentage manufacturing contributes to the gross domestic product (GDP) in African countries to other developing countries, manufacturing contributes about ten percent in African countries and 21 percent in other developing countries.

In Africa, but outside South Africa, there are pockets of manufacturing success stories. The Ethiopian leather industry has made a name for itself in global niche markets. Robert Parker, group VP of research for IDC Manufacturing Insights, says the one significant manufacturing segment in Africa is the remanufacturing of computer and electronics.

However, the picture is getting brighter. Globalisation, innovation and ICT are transforming many sectors to anywhere, anytime platforms. In the manufacturing sector, the mantra is “design anywhere, make anywhere, sell anywhere,” says Parker.

One shift is product manufacturing, separated into tasks and spread across manufacturing facilities. This is seen as a huge opportunity for new, smaller manufacturing entrants in low income countries, including Africa, according to the Industrial Development Report 2009 by the United Nations Industrial Development Organization (UNIDO).

Parker speaks of a similar shift from mass to micro to pod manufacturing. Historically, manufacturers built one facility to serve the world. With pod manufacturing, manufacturers can download designs and methods from anywhere to localised manufacturing equipment to serve the local economy.

Pod manufacturing has reduced cost tremendously and increased flexibility. For example, there is equipment to manufacture wine, starting at $3 500.

Parker also says that local African manufacturers will be able to “bring more diversified and custom products to their local consumers”. For example, Digiskin allows customers to go online to design skins to cover gadgets, including cellphones.  A company can purchase a production machine to provide some of these skins locally to customers.

For a long-term opportunity, Parker says that African governments need to leverage access to their abundant resources and require firms to develop manufacturing and processing facilities locally alongside extraction operations. In some instances, deposits in Africa may account for 80 to 90 percent of global deposits of certain precious minerals or metals. They need to play the leverage game like China. China recently limited the export of rare metals to boost the price. African governments can use the same principle in a different way.

In every aspect, ICT is embedded in the manufacturing value chain from infrastructure to intelligent manufacturing. Without sufficient broadband infrastructure, approaches like pod manufacturing might not be possible.

Parker also sees another opportunity with the pervasive wireless infrastructure in Africa, allowing African firms to tap into and manage the full manufacturing value chain almost anywhere with technology like remote sensing and radio-frequency identification (RFID).

While there may only be pockets of manufacturing on the continent, the global manufacturing shift opens new, even immediate, opportunities for ICT firms looking for new pastures, e.g. industrial clusters in Uganda and Tanzania, as they develop. It will be important for ICT firms to continually scan the environment to take advantage of these emerging opportunities.

Manufacturing convergence

Further south, leveraging information, communication, control and power is helping South African manufacturers innovate and compete.  Manufacturers have two options during the global economic downturn: cut back and try to weather the storm, or take the opportunity to be more innovative and aggressive. However, because South African factories struggle to manufacture products at the same cost as is possible elsewhere in the world, and due to a strong currency, local manufacturing concerns face these two options all the time.

Rockwell Automation believes that even though convergence has become a cliché over the past decade, “today the combination of technology maturity and economic necessity has made manufacturing convergence a manufacturing reality”. Manufacturing convergence sees the merging of functions and systems that have been separate. The theory is that with people, processes and technology working together, manufacturers can perform better.

Convergence within manufacturing leverages information, communication, control and power.  It’s no use simply having systems and machines recording data. Information must be in a manageable form: the new goal is presenting information in context.

Sources of information can be “streamlined to allow configuration, visualisation, maintenance and optimisation of manufacturing processes and plant assets,” Rockwell says.

Immense value is created when IT and manufacturing departments are able to share information seamlessly and securely, while running multiple applications over the same network. An enterprise manufacturing approach that is particularly suited to larger distributed companies envisions the enterprise as a “virtual manufacturing network”.

EOH, during an implementation at Coca-Cola’s greenfields Bloemfontein plant, was able to capitalise on available technologies while the rest of the group used mostly manual or semi-automatic systems. In time, improvements to its other factories will mean that they can join the network across the Coca-Cola SABCO enterprise.

The trend nowadays sees standard, unmodified Ethernet being adopted broadly across the plant and enterprise for data collection and real-time control. Add to this newer functionality such as voice, video and mobility, which are beginning to appear in the plant environment.

However, despite these advances, manufacturing convergence is a complex environment and cannot be delivered by a single supplier. Locally, system integrators like Bytes and EOH implement solutions from companies as varied as Cisco, Microsoft, SAP, Wonderware and Dassault Systems.

Beyond this, original equipment manufacturers are embracing new so-called “smart” service business models enabled through embedded software, wireless connectivity and online services.  This shift has significant implications for manufacturers.

Lifecycles of products are becoming ever shorter as releases will begin to ship in “real-time” with software devices delivered to products over networks when needed. Oracle’s manufacturing VP, Manish Modi, reckons it’s hard to accurately predict what manufacturing operations will look like five years from now, but “factors we experience today are likely to have a residual effect on the supply chains of tomorrow.”

Modi says that many of the top manufacturers will have leading “service-oriented architecture suites in place to enable supply chain evolution as well as needed flexibility to quickly respond to changing markets and inevitable shifts in buying patterns”.

He also suggests that most manufacturing systems will support Web or Enterprise 2.0. “The future adoption of tools like wikis, blogs and mash-ups to create store, and collaborate on information by skilled manufacturing users should not come as a surprise. Touch screens and sophisticated wireless devices should be a common part of leading factory floors.”

But, the biggest problem in converged manufacturing is not the availability or implementation of technology: it’s changing the mindset of the people themselves.

We had a quite a discussion with Cedric Muhammad, author of “The Entrepreneurial Secret to Starting a Business without a Bank Loan, Collateral or Revenue.”  The context for the discussion was the extreme environment in which we do business today globally.  I described the environment as openly hostile, meaning opposing or resisting our efforts to do business.  But, we concluded that entrepreneurs have the ability to tame this environment for success.

Cedric has an extensive background as an economist and entrepreneur.   He even formulated a business leadership model called “Hip-Hopreneur.”  A Hip-Hopreneur is an individual steeped in the hip-hop culture who is ready to become a power broker, business owner and political leader.  A Hip-Hopreneur is someone who appreciates the hip-hop art form and culture, as well as the responsibility of leadership and power to influence people around the world.  These are truly characteristics of successful entrepreneurs in any sector.  Entrepreneurs transform lives, communities and societies.

Cedric highlighted four key challenges faced by entrepreneurs at any time – capital, culture, communication and competition.  Each of the challenges when approached successfully enable entrepreneurs to navigate past a hostile business environment.

Looking at capital, we need to focus differently.  First, Cedric said entrepreneurs must view themselves and their ideas as the greatest source of capital.  Second, seek funding from your own social networks, e.g., college friends, family, church members.  Cedric emphasized that entrepreneurs often overlook the best source for accessible capital.

 Another point is that entrepreneurs go looking for funding before their concept is developed or proven.  Banks, venture capitalists and angel investors look for “bankable” businesses.  They want to make money, too!  When entrepreneurs start, they need to recognize the funding stages aligned with the business lifecycle.  Typically, when an entrepreneur first starts, he or she is at the pre-seed stage.  This is where your social networks can really help you out. 

Navigating culture and the competitive environment successfully is essential.  If you can tap into the culture that will support your business either as consumers, suppliers, etc., you will be amazed at the momentum you gain.

 In the competitive landscape, you need to be prepared for the shifts competitors may bring, such as disruptive technology.  The recent shift in Facebook’s prominence over MySpace is an example.  As Cedric put it, “it’s obvious MySpace didn’t see Facebook coming.”  But the story behind the story, which attests to the brilliance and adaptability of the entrepreneur, is that MySpace changed its business model to focus on its strength – communities around music and entertainment.

We also looked at how the current hostile environment evolved. A key crux was lenders providing funds not based on merit of your business venture or your personal credibility, but knowing they could re-sell the loans for a profit.  We moved from the foundation of exchanging value in our trade systems to exchange money without value behind it.  While the crisis occurred, it is moving people back into alignment so that our trade systems will work.  It’s a bit painful now, but necessary.

There are many other points made in the conversation that you don’t want to miss. Take time to listen to the recorded show.

Also, spend some time getting to know what Cedric Muhammad is sharing.  He brings insights to help you with your business.  Check out his three-volume book, “The Entrepreneurial Secret.”  You can also catch him on www.blackelectorate.com, www.blackcoffeechannel.com and www.cedricmuhammad.com.

Continue the dialogue about “The Art of Making Business Happen” at our online community – http://artofbiz.ning.com.  And listen to our weekly broadcasts at http://www.blogtalkradio.com/art-of-biz.

Signing off for now – peace and prosperity to you!

We had a great discussion this week about “Entrepreneurship:  The Answer to Economic Uncertainty.”  The picture for our economy doesn’t look good, even though the Dow Jones surpassed 10,000 on Wednesday.   Much of the improved financial status of publicly-traded firms comes from cost-cutting not sales.  Economists still do not expect the unemployment picture to get better any time soon.

But our discussion didn’t focus on the downside, but on the upside!  We shared how entrepreneurs are the key to the economy and economic recovery.  Bo Fishback, Vice President of Entrepreneurship at the Kauffman Foundation, shared how almost all the new job growth in the U.S. comes from companies under five years.  That’s right it is people like you and me – aspiring, emerging, new and serial entrepreneurs – that create jobs, not the government! 

Some other highlights from the radio broadcast are 1) An entrepreneur is more than someone organizing a business venture and assuming the risk.  An entrepreneur is a creator, innovator and problem-solver. 2) Entrepreneurs can gain influence, strength and support by coming together in community.  For example, need capital.  Learn about the concept of peer-to-peer loans by watching a Forbes magazine video.  Also, check out www.prosper.com.  Here you have people and entrepreneurs helping each other.  Learn how entrepreneurs as a part of communities fostered economic development throughout history in “The Entrepreneurial Secret” by Cedric Muhammad.  3) If we become a community, we can also become an economic system in our own right, fostering economic growth in our locally and globally.

But to be in the know, you need to listen to the show!  Listen online or download to your computer, MP3 player, cell phone or I-POD.

And, I just have to add one other point to top off reasons to get moving on that entrepreneurial idea.  Over 50% of the companies listed on the Fortune 500 started in times of recession.  So, this is the time for us to get in gear and make it happen for ourselves, families and communities!  Kauffman launched a great platform to facilitate a unified voice for entrepreneurs called the Entrepreneurs’ Movement.  Join and get others to join! 

There are other ways to stay connected with Kauffman’s work with entrepreneurs.  Check these out:

• Keep updated with real-time conversation on Twitter. ( http://www.twitter.com/strongeramerica)
• Join the Facebook community. ( http://www.facebook.com/buildastrongamerica)
• Participate in Global Entrepreneurship Week, November 16-22. (http://www.unleashingideas.org)

And don’t forget to stay connected with The Art of Making Business Happen community at http://artofbiz.ning.com and http://www.blogtalkradio.com/art-of-biz.  You can even join the community!

I am writing a series of articles for AfriBiz on the business landscape of important sectors in African economies.  This month gives you a tantalizing introduction to the agricultural sector.  There is alot of momentum growing in this sector.  You won’t want to miss the opportunities.  Enjoy the read, then engage with me to learn more!

In general, Africa journeyed from a net exporter to a net importer of agricultural products over the past fifty years.  This means Africa no longer produces enough food to feed its own people much less supply world markets.  The recent food crisis exacerbated the situation.  The future looks bleaker because the population of Africa will go from about 900 million to over 1.5 billion in 2050.

With so much arable land and bio diversity, why is Africa facing these challenges?  Research points out that Africa continued with a traditional agricultural paradigm, which produces the same products using the same methods by small-scale farmers.  In essence, Africa as a whole has not tapped into its potential.  With all the challenges the African agriculture industry face, the biggest impeder is the systems upon which it operates, according to a World Bank report.

From a business and investment perspective, the events of the past few years have pushed attention to developing sustainable, long-term solutions to the global and African food problems. Capitalized countries, such as China and South Korea, seek out arable land in Africa to assure food supply for their people and reduce reliance on imports. Foreign investors see the profit potential.  Deutsche Bank recently published a report called “Investing in Agriculture: Far-Reaching Challenge, Significant Opportunity,” which highlights the issues and opportunities for private sector stakeholders.  The question becomes will Africa benefit from others releasing its potential?

There are new business ecosystems and models combining existing structures with transformative innovations arising.  For example, instead of focusing money on large agricultural producers, the government of Malawi developed a stronger support network for its small-scale farmers.  It included simple innovations like fertilizer for higher yield crops.  One successful result is Malawi produced enough maize this year to feed its own people and sell the excess to world markets.

In a private sector example, Africa Invest Malawi (AIM) found success along similar lines with high quality crops like chilis.  AIM incorporated small-scale farmers in its commercial agribusiness ecosystem to increase overall output.  In both instances, the challenges of global and African food supply are met while broadly providing increased economic opportunities.

The impact of new business models like these will be felt throughout African economies. Agriculture already represents a considerable portion of African GDP, but imagine if it increased the annual income of 300 million people by even just $100 per year.  This adds 3 trillion dollars to African economies each year.  This is possible since 50% to 70% of the African population derives income from the agricultural sector formally or informally.  With more money flowing in the African economies, there is growth potential in other sectors that serve African consumers.

The business and investment opportunities in the agricultural sector are not just in production.  They exist along the entire value chain – from inputs to production to processing to wholesaler to distributer to retailer to consumer.  Also, there are opportunities in supporting sectors like finance, business management, and transport.  In addition, the opportunities scale from a single agricultural facility (small or large) to agricultural cooperatives/clusters to large producers/processors to entire segments.  Thus, opportunities are available to small and large investors and businesses alike.

For example, businesses like Kickstart make money by providing basic inputs to farming, e.g., irrigation pumps. Some firms like Yara, who develops agricultural trade corridors or ports, make money by building infrastructure.  Others like Google make money with a technology platform to provide agricultural information.

While the opportunities are endless, the key is to formulate a successful strategy.  Next year, Afribiz will launch products and services to help you shape a successful strategy for key sectors like agriculture.  In the meantime, visit the following information resources that give different perspectives on the agricultural business opportunities in Africa.

Food Business Opportunities in the African Consumer Markets

Making Agriculture and Food Market Opportunities in Africa Work

The Impact of the African Growth and Opportunity Act on Africa and America

List of Agriculture-Related Reports

This piece was commissioned by ITWeb/Brainstorm of South Africa for August 2009.  It expresses another strategic view of competitiveness, which places Africa, or anyone, as a competitive leader when fighting in their own unique space.  It’s about creating more value through innovation in your unique competitive space.  It reflects the paradigm of the Vision Society in which everyone, including organizations, is designed for a purpose and has a unique space on this earth.  Let it influence your mindset about approaching your own competitive space.

Is Africa ready to compete globally? If you read the Africa Competitiveness Report 2009 by the World Economic Forum, you get the sense that it isn’t. Although progress is being made, we still hear about the need to address the same issues around infrastructure, health, education, etc.

Malik Fal, MD of Endeavor South Africa, says these are “tangible issues but not the real issue”. And competitiveness is more about creating ‘unique’ value than productivity.

The Africa Competitiveness Report suggests that nations compete and evolve along a continuum, moving from basic factors to efficiency to innovation. Dr Paul Romer, Senior Fellow at Stanford Institute for Economic Policy Research, says: “Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable.”

In the end, it is innovation-driven economies that are best able to raise and sustain the living standards of their people.

Says Fal: “Africa’s mistake has been competing on basic factors like natural resources and cheap labour, which promotes poverty instead of prosperity.”

He strongly believes that if African nations, industries and firms compete on their assets in innovative ways, they can compete head to head globally, and regionally. In the book he co-authored, In the River They Swim: Essays from Around the World on Enterprise Solutions to Poverty, there are several examples of industries across the globe – Cuban

Cigars, Rwandan Coffee, Afghan Dried Fruit and Nuts – providing unique value while operating amid political, social and economic upheavals.

Fal states that economies prosper if the focus is on a pragmatic, strategic approach to create more value on the assets inherent in industries and firms. With the Rwandan Coffee industry, the government augmented and filled gaps to help the industry deliver more value by building roads to and from plantations, as well as improving airport infrastructure. One lesson is that focusing on innovation to deliver more value increases economic growth and can simultaneously deal with the tangible issues, if approached correctly.

There is no better example for the ICT sector in Africa than the mobile industry in Africa. Think how it not only opened economic opportunities to the operators but to an entire ecosystem. At the same time, mobile infrastructure development has incrementally pushed overall infrastructure development, according to Ethan Zuckerman, founder of Geekcorps.

At the World Economic Forum on Africa in June 2009, the African mobile market was recognised as one of the fastest growing in the world. The future isn’t written yet, but already there is diversification in mobile applications, e.g. mobile payment systems, agriculture, health, reporting. The social benefits of mobile phones are being experienced by communities that were formerly disconnected.

This is also translating into a larger market for the ICT sector. The benefit is not only to African firms, but also to global firms that are able to gather more real-time data in developing markets because of the proliferation of mobile phones.

Delivering on unique value also results in sustainability. Even during the economic downturn, the ICT sector in Africa continues to grow. Some, like computer manufacturers, have had to change how that value is delivered.

For example, instead of focusing on the laptop market, many firms have grabbed a hold on the netbook market, which is the fastest growing computer equipment segment globally .

Ory Okolloh, executive director of Ushahidi, emphasises that Africans should be creators of the technology for this mobile revolution, not just its consumers. Fortunately, there exists an ecosystem of diverse stakeholders based on innovation and collaboration that supports this idea.

This ecosystem reflects a strong, intangible asset of the African business culture – the social fabric of community interwoven in all aspects of society. How to leverage this asset to increase a firm’s unique value still poses a challenge for many, though. Verna Allee, president of ValueNetworks.com and author of the Future of Knowledge, stresses the increasing importance of leveraging the social dimension in the business context to be more competitive. She adds that, “Intangible assets account for 50 to 70 percent of a business’ (economic) value.”

Both Allee and Fal agree that company and industry competitiveness starts with knowing the full value, tangible and intangible, a company brings. Then, developing the space to deliver and leverage that value. The African mobile industry has demonstrated its unique value in many ways. Business models like pre-paid services, started in Africa, are gaining ground in the United States. The key for the African ICT sector to increase its leadership competitively is to continue in the same vein – concentrating on unique value.

In a bid to help companies realise their full value, Allee developed the value network methodology, which helps to map and leverage both the tangible and intangible assets of organisations.

According to Allee, a value network “is any web of relationships that generates tangible and intangible value through complex dynamic exchanges between two or more individuals, groups, or organisations. Any organisation or group of organisations engaged in both tangible and intangible exchanges can be viewed as a value network, whether private industry, government or public sector.”

A value network is structured by the roles people play. Figure 1 (above) illustrates the rich set of value exchanges within the value network of a technology firm.

In the end, African ICT firms will gain competitiveness due to innovation. While basic factors and efficiency augment innovation, innovation finds ways to trump them on the competitive field. In other words, African companies will remain economically viable and competitive if they are able to deliver on their unique value amid the turbulence of the business environment.

Original publication