"Innovative Africa", 16.1.2023
In previous panels the “doing business in Africa” approach, a pronounced “outside-in” perspective was guiding our discussions. This time we wanted to learn more about the local view. The aim of this panel was to discuss the innovation challenges in Africa and to highlight successful firms and their business models.
African entrepreneurs have a great chance to adopt or adapt existing innovations. As many examples show, they use available technology in a creative and innovative way to solve unmet and pressing needs. Often, foreign partners cooperate with them and support them with funding, management expertise, skills development and access to technology.
The following questions were guiding the discussion:
What are the characteristics of innovations that fit the African societies and economies? Which pressing problems do they try to solve?
What are the main barriers to business expansion and the scaling-up of innovations?
Which role do foreign and European firms play in this process? How does the cooperation with African partners work?
Kesena and Efemena Odede, Founders of Ventis in Nigeria
Tobias Reiter, Founder of Viebeg Technologies
Youssouf Diakite, Co-founder of ADYFE - The African Diaspora Youth Forum in Europe
Yann Huguenard, Founder and CEO, Y.H. Consulting
Hans Stoisser, Founder and Managing Director of ECOTEC/NextAfrica and author of “kesho business – Warum Afrika der Pioniermarkt der europäischen Wirtschaft werden muss“
Bernhard Hoetzl, Startup Entrepreneur, Strategic Advisor and Business Angel of Kuze.ai
Arnold Schuh, Competence Center for Emerging Markets & CEE, WU
The panel started with the presentations of two companies, VIEBEG Technologies and VENTIS, both founded in Africa to solve a pressing problem there. Tobias Reiter, a graduate of WU and University of Groningen, is a serial entrepreneur, co-founder and CEO of VIEBEG Medical, a data-driven procurement platform for medical equipment and supplies. Prior to starting VIEBEG he built a ML-powered trading algorithm for sports betting that he sold to investors. Reiter recognized during his master studies that the African health care system is suffering from underdeveloped medical supply chains and understood that he could make a difference. He wanted to use technology to improve healthcare in Sub-Saharan Africa. He developed a health demand simulation model that can be used for optimizing procurement, delivery routes and inventory management. The purpose of VIEBEG is to make medical equipment affordable and accessible. Currently, VIEBEG is serving 500+ healthcare providers in Kenya, Rwanda and DRC.
Then, two brothers, Kesena and Efemena Odede presented their software development and training company VENTIS. Their mission is to empower African businesses by bridging the gap between (small and medium-sized) businesses and information technology. The company was established in 2019 in the Delta State in southern Nigeria with the ambition to boost technology use in Africa by providing digital solutions to grassroots’ problems. Both brothers have studied and worked in Austria. The high price for software, few offerings of trainings for IT professionals and low levels of process digitalization in the hospitality sector have led to the development of BMT, a business management tool designed to assist businesses by digitizing processes, and ZEUS, a digital tool supporting managers of businesses in the hospitality sector. Both tools are affordable, subscription-based mobile solutions, which are not dependent on internet availability. The innovativeness lies in offering affordable solutions for SMEs including updates and training and addressing typical problems such as the unreliable Internet via mobile telephony and easy usage.
The discussion afterwards centered on the following themes:
Weak infrastructure and institutions
Trust and cooperation
Lack of skilled labor
Role of diaspora
The European view on Africa.
Tobias Reiter and Kesena Odede mentioned the difficulties of operating businesses in Africa. Ethnical, linguistic and legal fragmentation is high, not just between the countries but also within. A weak transportation infrastructure, underdeveloped legal systems, power outages and the low output of well-educated people and specialists are among the major challenges they face. Those so-called “institutional voids” make extra efforts of businesses necessary to be able to operate in this environment as Arnold Schuh added. Businesses cannot rely on existing and working institutions as in Europe or the USA but have to fill the voids themselves or innovate around as the multitude of solutions based on mobile technology shows. The lack of skills in quality and quantity is hampering a fast business expansion. US and European multinationals are paying Western wages for IT-specialists, making them unaffordable for SMEs. Therefore, VIEBEG and VENTIS have to train and educate the new entrants to bring them up to the needed level.
In addition to the high fragmentation of markets regarding consumer behavior, supply chains, competitive situations and legal frameworks, mistrust is widespread according to Kesena Odede. While comprehensive laws exist, enforcement is weak what makes business transactions risky. The only chance to expand geographically is to find reliable partners. There was consensus among the panelists that cooperation is the only realistic way to overcome fragmentation and mistrust when doing business in Africa.
The former UNIDO development expert and now consultant Yann Huguenard carried on this view. He drew from his experience in developing and delivering training modules for over 400 African start-ups and innovation hubs. The mistrust within the actors in the economy complicates or even hinders business activity. To succeed he recommends “digital plug & play solutions” as such systems do not only reduce access barriers but also help to overcome potential mistrust between the actors. An e-commerce platform that he developed brings together 100 small producers and cooperatives from the agricultural sector and excels because it offers standardized and easy access to markets, logistics and product insurance. Bridging the "last digital mile" by designing and delivering plug & play light digital solutions to remote areas while advancing connectivity and training of local communities makes a big difference.
The co-chair of ADYFE, the African Diaspora Youth Forum on Entrepreneurship, Youssouf Diakite, highlighted the special role of the African diaspora for bringing investments and business development to African countries. These people who have left their country of origin to study and work abroad are still in contact with families and friends back home and feel emotionally connected. Still living abroad they have acquired valuable skills, knowledge and contacts that could be commercially utilized in their home countries. In his trainings and consulting projects, he observed how this “brain-circulation” and know-how transfer contributed to the creation of start-ups and other innovative businesses.
Hans Stoisser, who has more than three decades of experience as consultant and entrepreneur in Africa, pointed to this entrepreneurial spirit that can be found in Sub-Saharan Africa. Acting as a true entrepreneur is still possible compared to the overregulated markets in Europe. Addressing pressing local problems and finding innovative solutions is a hallmark of African entrepreneurship. In his book from 2021 “Kesho business” he encourages European companies to go to Africa and experience this pioneering spirit – however, stressing cooperation again, together with African partners. European businesses have to expand their presence there to be able to participate in the growing demand and, at the same time, to contribute their resources, competencies and advanced (sustainable) solutions to the economic catching-up.
One who fully shares this view is Bernhard Hoetzl, a business angel and strategic advisor to several start-ups with more than 20 years of senior and executive management experience. He became a few years ago interested in Africa. Since five years, he had been co-teaching with Prof. Barbara Stöttinger a course on “Doing Business in Africa – the Next Frontier” in the marketing master program at WU. He told the audience about the increasing interest of the students in doing business in Africa and the seminar projects with African start-ups such as KuzeKuze (Kuze.ai). In 2021 he became mentor and strategic advisor of KuzeKuze, an EdTech start-up based in Nairobi, Kenya. KuzeKuze offers a machine learning and AI based solution that allows an innovative personalised pedagogical approach that improves learners' outcomes at a primary school level. KuzeKuze’s educational technology platform uses a paper-based approach to enhance student's learning experience, reduce teachers’ workload, help schools better manage their resources and improve guardians’ follow-up on their children's school progress. Something that is not confined to African students but could be a helpful tool here in Austria and other countries worldwide too, as he remarked.