New report: Innovation key to Africa’s economic growth

Innovation has long been recognised as a key driver of economic growth, and this holds especially true for African nations where some of the world’s most innovative countries are located. The release of the WIPO’s Global Innovation Index (GII) 2022, which tracks the current state of innovation globally, has identified Kenya, Morocco, and South Africa as some of Africa’s most innovative nations.

According to the seventh edition of Disrupt Africa’s African Tech Startups Funding Report, start-ups in some of the continent’s most innovative nations raised a combined $1.9 billion in 2021. This figure represents about 92.1% of the overall total investments raised in Africa for that year.

It highlights the significant role that innovation plays in the development of solutions that address some of the continent’s most pressing issues, such as support for entrepreneurship, food security, digital innovation, energy solutions, and many more.

Brent Haumann, the managing director of African digital communications firm Tilte, believes that infrastructure development that supports the growth and innovation of digital technology will go a long way in giving business owners more comfort around growth prospects. This is crucial for the growth of small and medium-sized enterprises (SMEs) that must feel supported within their environment to thrive.

One of the most notable innovations that has taken place across Africa is the significant growth in internet and digital penetration, with the continent having approximately 570 million internet users.

This has been facilitated by the innovation that has led to more than 1.2 million kilometres of internet cables being laid across the world’s ocean floors. These numbers are set to continue growing with the arrival of SpaceX’s Starlink and Google’s Equiano, which will further drive digital penetration on the continent.

Haumann highlights the importance of digital communication for businesses and cites its crucial role in engaging with customers, especially during periods of lockdown when digital communication was the only way to interact with customers. He believes that this shift towards digital communication will only continue to increase, and that the global online audience will be almost as big as the global TV audience by 2023.

The recognition of cryptocurrencies by governments across Africa has also supported the growth of digital technologies. In South Africa, for example, the Reserve Bank has adopted regulations around cryptocurrencies, formalizing their use.

According to Tony Mallam, co-founder and managing director of South Africa’s first passive cryptocurrency micro-saving and investing app, upnup, “saving and investing can be done at the touch of a button” thanks to digital innovation.

Mallam believes that the government’s interventions are necessary to encourage the growth of blockchain and crypto businesses in South Africa.

For innovation to thrive, SMEs and business owners must feel supported within their environment. In support of working hand in hand with African entrepreneurs is technology firm Zoho, which has recently tripled its workforce and opened offices in Johannesburg, Kenya, and Nigeria. Zoho Africa’s regional manager, Andrew Bourne, believes that the company’s growth is enabling it to improve the lives of the communities where it has launched its hubs and drive innovation within those areas.

Looking towards the future, the GII 2022 report highlights the upcoming “Digital Age innovation wave” that is set to make ample productivity impacts across all sectors, including services. This innovation wave is built on supercomputing, artificial intelligence, and automation. Both the private and public sectors must work together to support this innovation to drive economic growth and technological advancement.

Innovation-driven economic growth is crucial for Africa’s development, and the continent has shown significant progress in this area. The recognition of the importance of digital technologies, the adoption of regulations around cryptocurrencies, and the growth of companies such as Zoho are all positive steps towards supporting innovation and driving economic growth.

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