SMEs power Africa through digital disruption
SMEs are responsible for an estimated 77% of jobs in Africa and as much as half of GDP in some countries
September 22th, 2019 – Digital disruption, underpinned by increasing levels of internet penetration and sophisticated global logistics, has broken down geographical constraints. This is providing connectivity to millions of people across Africa and creating opportunities for small and medium-sized enterprises (SMEs) to grow their businesses on the continent and beyond.
SMEs are engines of global economic and employment growth. The World Bank estimates that SMEs are responsible for 77% of all jobs in Africa and as much as half of the GDP in some countries. It follows then that SMEs will help fill the gaps in the growing global workforce and generate much-needed employment, particularly in emerging economies.
Global trade is increasingly being driven by smaller, more agile businesses. An entrepreneur with a great idea, for example, can market on social media and implement digital or e-commerce solutions to deliver their products and services to customers anywhere in Africa or the world.
Digital disruption is at the heart of this renewed energy sweeping through the African SME landscape — driving product and customer service innovation, and a sense of self-belief that no challenge, whether geographic or infrastructural, is insurmountable.
The decentralisation of technological services creates possibilities with access to new markets; reduces business costs; and builds efficiency as SMEs increasingly look to grow their cross-border commerce.
The right ingredients
Importantly, Africa has the right ingredients for global success. Its population of about 1.2-billion people is projected to double over the next 30 years, making it an exception in a world of declining population growth. Additionally, Africa will soon be the region in the world urbanising the fastest.
The continent has also proven to be an innovator and early adopter of all things digital and mobile. Countries across Africa have shown a great appetite for digital and mobile solutions that leapfrog traditional challenges and barriers to entry such as cost and infrastructure.
Young people are largely the driving force behind this new position of Africa on the global stage. They are predicted to make up 50% of the continent’s population by 2050 — and combined with rapid technological changes and continued digital disruption, it is inevitable that the way people do business and communicate will undergo significant change.
Understanding this evolving environment provides extensive opportunities to change how people, companies and even economies work through the disruptive power of technology, allowing SMEs in particular the opportunity to expand their footprints and act as the drivers of growth and development.
Written by Business Day
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