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Whitespaces & Opportunities

Africa’s innovation journey has begun but significant whitespaces remain

Africa is at the epicenter of digital innovation for social development. The significant development challenges coupled with the lack of legacy systems and infrastructure positions the continent as a hotbed for technology-led innovations that can trigger exponential impact. Although a beginning has been made towards this direction, significant whitespaces currently exist. For identifying these whitespaces, we scanned 100 technology use cases in Africa and mapped them against the six development challenges and the five impact amplification levels viz. speed, deep insights, customization, democratization and system change identified in the report. Our selection comprises of use cases which are currently deploying emerging technologies like IoT, Blockchain, Big Data, AI, Robotics and 3D Printing and a few which have high potential of doing so. The selection considered only enterprise-led use cases and excluded experiments and projects. Some of the use cases which have cross-sectoral applications were mapped to development challenges where they promise to have maximum impact.

Whitespace 1: Beyond speed and deep insights

Most emerging technology use cases in Africa currently focus on either enhancing speed of delivery of products and services or facilitating deep insights to improve decision making and product performance. Emerging technologies, however, are capable of triggering much greater impact which is all the more critical in the context of Africa’s large development challenges. These technologies can enable heightened customization of solutions and democratization of access for BoP populations. They can further converge to have potentially disruptive effect on existing industry structures and create system changes. Currently there is a dearth of innovations that promise to bring about these higher levels of impact and innovators in Africa and from around the world can capitalize on this whitespace.

Whitespace 2: Beyond financial inclusion

Almost half of the enterprises we identified were mapped to the development challenge associated with expanding choices for the BoP and reducing their vulnerabilities via financial inclusion. This includes a few which do not directly focus on financial inclusion but empower other enterprises to expand BoP choices. However, beyond financial inclusion there are other major development challenges in Africa that emerging technologies can help address. Innovations are particularly sparse around creating a future-ready workforce (5%), managing the competing usage of water and the interplay between water, energy and food security (5%) and securing low carbon energy security and protecting the environment (9%).

Whitespace 3: Beyond Internet of Things

Most of the innovative emerging technology applications in Africa are currently unfolding on the IoT front while evidence of use cases is relatively limited for technologies like AI, Big Data and Robotics. Innovations using sensors and wearables are finding applications in various sectors. This is partially due to the fact that globally, IoT as a technology is at a relatively more advanced stage of development compared to these other technologies. Having said this, interestingly enough our scan revealed quite a few enterprises working on Blockchain innovations although these use cases are still at early stages of development. Going forward, as internet penetration and digital connectivity expands in Africa, the case for leveraging the other emerging technologies like AI and Big Data is expected to grow stronger.

Whitespace 4: Beyond South and East Africa

While there is a lot of buzz around emerging technology innovations in South Africa and countries in East Africa like Kenya, Rwanda, Uganda and Tanzania, innovation activities are limited in other parts of the continent viz., West Africa, Central Africa and North Africa. The primary reasons behind this are lower levels of digital connectivity and political and economic stability in the latter regions. While, these factors may hold back private investors from playing an active role, they indicate the potential need for other players like governments, donors and foundations to take the lead in funding and nurturing emerging technology innovations in these regions of the continent.

Whitespace 5: Local whitespaces exist and are waiting to be unearthed

Africa is an expansive continent comprising of 54 countries. These countries present vastly different demographic, socioeconomic, political and cultural settings implying a range of potential applications emerging technologies can have, when contextualized to each country. We believe that through this report we have only scratched the surface and that significant whitespaces for spurring emerging technology innovations at the country level are waiting to be unearthed and explored.

Making it happen: How to create a high impact tech innovation ecosystem

Turning our tech vision for Africa into reality can be sooner than we think, if we create a nurturing environment and step outside our traditional boundaries. Governments, regulators, donors, investors, corporates, and innovators have a role to play in shaping tomorrow and becoming part of Africa’s high impact tech innovation ecosystem: Through collaboration, we can find new ways of providing capital into underfunded white spaces, closing the talent gap, creating an enabling policy and regulatory environment, and triggering necessary behavior changes. Intellecap is committed to drive this conversation and to jointly with like-minded organizations pursue outcomes around the following opportunities:

OPPORTUNITY 1: New forms of collaborations

Emerging tech for social good is a field for pioneers making new forms of alliances critical: Partnerships between corporate research and development labs and startups and innovators working on similar problems on the ground can help faster product development and market feedback. Corporates can provide emerging technology innovations with the necessary platforms for testing and scaling, like already demonstrated in the financial services industry. Similarly, ‘unusual alliances’ between those developing tech and those working with the target consumers can offer insights around how to create new consumer touch points and effectively drive behavioral change. While technologies are sector agnostic, finding solutions to Africa’s development challenges often is not: Hence connecting the dots between emerging technology experts and those who understand sectoral development challenges in healthcare, energy, water or financial inclusion can open up new solution spaces. Finally, intermediaries, governments, and donor organizations can play a proactive role in bringing together innovation ecosystem stakeholders on common action and advocacy platforms.

OPPORTUNITY 2: ‘Test beds’ to speed-up prototyping and learning

While greater collaboration between corporate R&D labs and innovators is required, the innovators also need to be brought closer to the on-ground context in Africa. Many technology innovators are developing solutions in R&D labs, but often outside the African continent and far away from the context in which those solutions need to be applied for creating maximum impact. Local, real world test-beds enable quick prototyping and getting instant user feedback. Facilitators need to connect the dots and link those who are developing solutions with those who have rich knowledge of the development challenges in Africa. The facilitators could be intermediary organizations, donor agencies or specialized service providers. In recent years, a few local innovation labs have emerged that help create this bridge between innovators in the global north and use cases and applications in the global south. Donors can play a catalytic role by helping innovators navigate local contexts and opening up their programs and initiatives to innovators to embed their innovations. They can in effect, serve as ‘live innovation test beds’, providing exposure to real world situations and ground level stakeholders and actively supporting the prototyping and piloting process. In addition, they can provide a ‘safe environment’ that helps tech developers understand customers and the market.

OPPORTUNITY 3: Risk-taking innovation capital

Reaping the potential of emerging technologies and their ability of creating system shifts requires new forms of patient capital and proof-of-concept funding as well as tech savvy investors who have the appetite to fuel the design, scale-up and growth of tech innovations. While Africa has seen an inflow of impact and venture capital, high risk-taking innovation capital is still a gap. Tech investors who understand the potential of technologies are unfamiliar with the African context, while local investors often lack the appetite for technology investments. Philanthropic capital, donor and government funding hence can play a particularly critical role in filling the proof-of-concept funding gap in the short term. In the long term, intermediary organizations can help build knowledge among local angels and investor networks around promising technologies and increase tech savviness of investors. Networks of experienced tech investors in other markets such as US or Europe can help crowding in such investors into the African market. In addition, new financing structures such as blended financing structures are needed that are able to reduce risks and crowd in private funders. Last, traditional financing actors such as banks can play a crucial role in providing seed capital and venture debt, especially to existing enterprises working on innovations.

OPPORTUNITY 4: Open-source knowledge infrastructure

Open source data platforms and communities that enable knowledge sharing between innovators, corporates, technology experts and experts having knowledge of the local context in Africa can shorten learning cycles and reduce the risk of failure or making mistakes others have gone through before. Africa’s diverse development challenges and their changing contours from country to country requires such knowledge sharing platforms to create local chapters that focus on bringing solution development as close to ground zero as possible. The sharing of knowledge, information and experience amongst ecosystem stakeholders via engagement platforms around specific topics embedded in the local context can significantly fast track innovation design, testing and deployment. Such open-source knowledge sharing infrastructure helps create ‘hives’ comprising of the most relevant stakeholders in a particular given context. These stakeholders can develop a deeper understanding of each other’s roles and expectations and generate common vision of how innovations that can potentially deliver maximum impact should look like.

OPPORTUNITY 5: Building robust cyber-security infrastructure

As emerging technologies create a digitally converged world and bring in efficiencies through generation and analysis of voluminous data, new vulnerabilities and threats in the form of theft and unauthorized use of this data also increase manifold. Securing the integrity of data and the digital infrastructure is thus imperative to create user confidence. While governments have a pre-eminent role in ensuring protection of data privacy via policies and regulations, intermediaries, technology experts and donors can lend vital support to the government in such policy formulation process. These ecosystem stakeholders can support governments in developing consumer and data privacy protection standards and protocols for emerging technology innovations to factor in. Many of the African countries need to build secure digital infrastructures from the scratch. This provides an opportunity for these stakeholders to help identify potential cyber security threats at the very onset to inform the conceptualization and design of robust digital infrastructures.

OPPORTUNITY 6: Creating an enabling environment for tech convergence

The greatest potential of emerging technologies to democratize access to products and services and trigger system changes in Africa can be unleashed when they interact and work together rather than act in silos. Closer dialogue and collaboration between innovators, emerging technology experts, experts with knowledge of the African context and governments can greatly help inform the design and contextualization of emerging technology convergence to create large-scale impact. Convergence-led innovations require platforms underlying the multiple technologies to ‘talk to each other’ and therefore entail greater investments and time to develop and deploy. Investors, donors and governments need to therefore, adopt a more long term perspective in financially supporting such innovations. Governments in Africa with support from technology experts and donors, also have a more direct role in establishing standards and processes that guide technology convergence. Enabling policy and regulatory frameworks can incentivize enterprises working on convergence-led innovations to enter the African market and customize and scale such innovations to address the large development challenges the continent faces.