by Simon Lewis

CONVERGING ON GREATNESS

Convergence across industries is resulting in the rapid emergence of new business models as well as substantial investment opportunities that are turning Africa into the continent with the greatest opportunities around

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There’s something highly democratising about sitting around a table with a group of strangers, from different industry backgrounds, and sharing ideas in the name of creating something amazing.

We had introduced ourselves to one another, handshakes, smiles, and shared first names, but there were no packdrills, no staking claims to superiority or authority. The other delegates at my table didn’t know that I was a magazine editor, and I didn’t know if the rest of my group owned their own company, were CEOs of a multinational, or high-flying owners of a major startup. We were just a group of diverse South Africans who represented the demographics of our country and, for the next half hour we shared our visions and ideas for a remarkable new mobile phone app which would enable people living in rural villages to test the quality of their local water (yes, test water quality with a cellphone!) as well as reporting their findings back through a national grid.

It was the stuff of wonder. We created something special and earth-changing. You probably haven’t heard about it yet, and, in truth, you probably won’t ever hear of it. Well, it was just an idea we came up in our little brainstorming session, while the rest of the 200-strong delegation at the Growth Innovation Leadership (GIL) 2015 Congress did the same thing in their own huddled masses.

Far fetched

Later in the day all teams took a minute to pitch their own app idea to the rest of the delegates, and in truth our idea was one of the least practical and most far fetched. Think about it? A phone with some kind of straw that can dip into a stream or dam, test the water and then report back to a central network to warn about the failing health of a water source in order to prevent further contamination? Or even simply to inform the person standing streamside that the water is safe for slaking a thirst?

Crazy. Like the thought of performing surgery remotely via skype, or flying remote-controlled cameras that can monitor nature reserves, keep an eye on crime hotspots, or even deliver medicine to stricken hikers faster than a terrain-challenged ambulance. Not crazy after all— but admittedly ours was an idea that would need serious mind-power and innovation to bring to fruition. However, if you don’t ask the question you’ll never think to look for an answer, which is perhaps how the founders of four massive multinational companies took their own first steps towards immortality in the face of impossibility. A few years ago we would scoff at the thought that four of the world’s biggest and most influential companies operate on a euphemistic shoestring.

Uber transport more travellers than any other road transporter, yet they don’t have any of their own taxis on the road. Airbnb puts more travellers to sleep at night, yet they don’t own any hotel rooms or beds.

Shopping giant Alibaba holds no trading stock, while the world’s most prolific fount of publishing, Facebook, doesn’t create any of that content.

Big suddenly took on a whole new dimention.

This is highly pertinent in the African context, as not only do more Africans now have access to mobile phones than those who can access clean water and electricity, but there are also 400 million unique mobile subscribers in Africa, with only 150 million people using traditional bank accounts. This leaves 250 million Africans with access to mobile phones but who don’t have access to traditional bank accounts. This does, however, create incredible potential for the financial services industry.

The message is clear: with the globalisation of the world economy, no-one can afford to ignore the market potential in Africa … and equally no-one can close their eyes to the need to mobileise their business or business offering in order to reach out to this wider market.

Come on Dorman, light our fire

The fire of inspiration within our group had been ignited by Dorman Followwill, the senior partner and director of Frost & Sullivan, the organisation who organise this worldwide series of business conferences, with this event held at the Table Bay hotel at the V&A Waterfront in August.

When Dorman was introduced onto the stage, even if his cattle ranch moustache had been masked by a nun’s habit and his Texan ‘twang’ drowned out by a drum roll, he would still have shone as a Texan original through the manner in which he commanded the stage. He had a magnetism that charged the crowds.

He raged and enthused and moved his hands about, presenting in a way that South Africans are not (en mass) yet accustomed to. Too many of us are still too giggly and uncertain, tittering as the spotlight hits us.

“Hey, I’m on the TV!”

American kids are branded precocious, but on the positive side of that coin they are also injected with a confidence and a ‘can do’ attitude that gives them an edge when they step into the international arena. That was what was exciting about MC Followwill. But what was equally interesting was how a Texan, a man who hails from one of the world’s great economic superpowers, could be so enthused about what Africa has to offer, and South Africa in particular.

The edge of greatness

When Americans start telling you with passion that you are on the edge of greatness, it’s probably a good sign to sit up and pay attention.

Followwill’s message was that the times are changing and that Africa, sleepy hollow and infrastructurally challenged though it has been, is rising.

Ironically, our lack of infrastructure gives us an advantage.

“Africa will become an innovative adopter and pioneer of technologies in coming decades, based on its unique operating environments. The lack of legacy systems and structures will allow companies to invent innovative applications for existing technologies,” states Frost & Sullivan operations director, Hendrik Malan.

“Africa’s ability to leapfrog technologies and adopt converged solutions is tremendous. This is particularly accelerated by the mobile and smart phone adoption rates at consumer level. Converged solutions have the ability to negate the requirement for large capital expenditure and legacy systems, content, and so on. This will effectively level the playing field for Africa in areas.”

The adoption of these solutions is rapidly on the rise—the problem is that investment is still low. This would include more peer-to-peer, government-to-government and government-to-enterprise models being adopted in Africa and beyond.

This trend is supplemented with a whole new range of innovative business models being applied within, and across, industries, from telecommunications to energy, healthcare, automotive, manufacturing and much more.

Look east, young man

The economy of the continent is at the precipice of change where today’s converging forces will become significant in shaping the visionary future. “Companies will need to evolve and identify ingenious business processes to tackle transformative changes if they are to stay ahead of the curve,” said Frost & Sullivan global director for Growth Implementation Solutions, Mark Simoncelli.

Ever alert to new economic opportunities, Japanese companies have already started looking to Africa for investment. “Africa has less than 2% in Japanese investment so there is plenty of potential here,” stated Frost & Sullivan Regional Director for Tokyo, Japan (APAC) Robin Joffe, adding that Japanese companies are now specifically looking to invest in emerging countries. These companies already active in Africa are making huge investments into the continent and are looking for partners and distributors. Already there are over 200 Japanese companies across 12 industries, with a key focus on energy, electronics, healthcare and ICT. The impact of convergence, driven by connectivity, is the key component that focuses on the future of all industries and businesses across the globe.

“At Frost & Sullivan, we are seeing a number of global players moving decision-making authority and research and development (R&D) budget to Africa to take advantage of these opportunities. Convergence is a very real force to be reckoned with on the continent,” said Malan, before adding a note of caution. “Convergence introduces increased levels of operational and strategic complexities. It is therefore absolutely essential for executives to educate on not only the latest trends, but also how other companies are dealing with these challenges and opportunities,” said Simoncelli.

Convergence is rapidly leading to a cross-pollination of industry expertise as organisations start to acknowledge how one business sector impacts another. In the world of chemicals and materials, for example, convergence is happening with the advent of “green”, where chemicals are being driven to be more environmentally friendly and to enhance the concept of being energy smart.

“Smart chemicals and materials are being developed to encourage energy efficiency in the use of insulation materials and paints, for example, that reduce the need for heating and cooling in buildings (SMART buildings),” says Frost & Sullivan Business Unit Leader for Energy and Environment, Aurelia van Eeden. “In the automotive industry, smart components reduce the weight and thus fuel consumption on the road and there is an incorporation of more natural materials into cars which is leading adhesives to evolve and become less harmful to the environment.”

Additionally, fuels are increasingly being developed from biological sources, such as the development of jet fuel for South African Airways (SAA) from Solaris tobacco, and the use of landfill waste to generate gas power in municipal areas. Water management is also becoming more modular and is being combined with renewable energy sources to remove water treatment from the power grid; thus becoming more cost effective and sustainable.

“We are seeing a number of companies already adapting their business models in Africa to address the changing business landscape, including the Energy Intensive User Group in South Africa, consisting of the large mining houses like BHP Biliton, ArcelorMittal, and others like Transnet and Sasol,” notes Van Eeden. “It is vital for companies operating in the African commercial environment to understand the importance of current and future trends, as well as areas of convergence.”

Leading from the front

Africa can catch up quick and possibly even lead from the front economically given our economies of scale and the human and natural resources at our disposal … but we have to think differently. Like Uber and Alibaba, or imagining a cellphone with a straw to test water quality. We need to build a culture of asking new questions, difficult questions, searching for new answers as we shift our focus towards a new horizon.

“Expand your thinking. Democratise yourself. Cultivate an abundance mentality and share information and opportunities.”

These were the powerful lessons we took away from GIL, but they aren’t nice-to-have motivational posters to perk you up on a moody Monday. They need to be mainlined into the DNA of your organisation. The rate of change we are faced with summons images of the roadrunner at full tilt, and you can’t win in a new world with old attitude. Wily coyote has to morph from the mugger to the wingman.

Curtains up, lights beaming and the world awaits. It’s time for Africa to step up to the high performance plate. After all, right now all the world’s our stage.

Simon Lewis

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