A successful entrepreneur knows how to master his or her environment. An idea can only take you so far. The skill lies in knowing how and when to execute. Inspire Mastery is a series that looks at some of the trends that are driving the journey of South Africa’s savvy tech entrepreneurs.
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The best part of a journey is the exploration. That, and the expectations. Though South Africa’s yet to become a leader in tech, it’s showing some promising signs. And if these current circumstances and their numbers are anything to go by, we’re in for quite a ride.
A recent report by Ernst & Young (EY) took a trip into the future of South Africa and Africa in general. Fifteen years from now the continent is going to be very different from what we know it to be today.
EY looked at international trade, macroeconomic management, international trade, business regulation, diversification, political reform and technology as the key drivers of the continent’s growth.
Internet penetration is on the rise
A study which looked at different ways in which the internet is improving the lives of the majority of the people on the continent, found that education, connectedness and entertainment are the most valued trends.
While each country faces its own obstacles and has its own opportunities, there are a couple of common trends across the region. The survey found that Africans with access to the internet via mobile meant that they had better access to education and the opportunities around education.
Furthermore, it drives connectedness. Access also means people have better access to the world and connecting with people from around the globe. Whether it’s phoning a friend to come pick up his birthday present, a tailor informing people of their product order or staying up to date on current global events, the internet is revolutionary.
Let’s crunch some numbers.
Since June 2014, there’s been a 19% internet penetration rate of 172 million users and a further 69.3% mobile penetration rate. This number is set to rocket in the next decade with US$50 smartphones becoming more and more widespread.
With that growing number comes money money money. Research has shown that the internet can contribute up to US$300-billion to Africa’s GDP by 2025, up from an estimated US$18-billion in 2013.
Where exactly is all this moola expected to come from? Mostly from Africa’s consumers.
A report by Deloitte released last year painted a rather impressive future for most of the continent’s growing markets.
The report further founded favourable population statistics noting that approximately 62% of Africa’s inhabitants are under the age of 25 and a population growing at an average rate of 2.2% which is twice as high as the growth in Asia. This means that there is a growing workforce on the continent, if managed correctly.
Though the internet is great in how it content gets consumed, things get really interesting when we look at those creating the content, or the tools to access it. This is where business steps in. More specifically, this is where tech startups of today, will hopefully become the industry shapers of tomorrow.
Enabling a playing field for this to happen is of course extremely crucial for the future of Africa.
Business regulation improving
Red tape is seen as one of the biggest obstacles for entrepreneurs to flourish. As the World Bank’s research on the continent found, 45 out of the 46 economies they track have improved their regulatory environments for doing business since 2005.
The World Bank similarly found that Rwanda is one of the best places to start your business because of the government’s little red tape. Businesses for instance are forced to register online in a step-by-step process, minimising human error while maximising efficiency.
To roll-out this online registration process to the rest of the continent, a new simplified system, called the Global Enterprise Registration (GER), was announced recently. Essentially, it’s a one-stop-shop to help entrepreneurs start businesses legally anywhere in the world.
Formalising industries and processes is key to the state not losing out on potential tax revenues and affording entrepreneurs better access to financial and consumer-markets.
The Global Entrepreneurship Week found that more than 50% of all businesses operate within the informal economy — a massive market untapped and unregulated. Initiatives like the GER will help governments put these businesses on the map, and with the amount of data captured, will be able to better implement policies best suited for the business landscapes.
Africa’s becoming a platform yet to master, meaning that there are so many things still to be uncovered and developed. Though there are many obstacles ahead, if we play our cards right we could truly shape the continent to become a global leader in tech.
Image by eirasi via Flickr.
