When discussing emerging markets and the future of work and profit, “Data is the new oil” is an expression that has solidified its place in the conversation. If data is the new oil, as the popular phrase goes, then data is our most valuable resource, it powers almost everything we use today to work, move and live, and it is virtually unusable if unrefined.
Innovating beyond proprietary data is becoming more and more important. This is especially true in Africa, the continent that some of the world’s youngest and fastest growing economies call home, where business intelligence and revenue models are calling for a new framework of doing business. This framework, the open innovation ecosystem – where a good number of leap-frog innovations are necessary – requires the need for speed through collaboration from not just the private sector, but the public sector and its stakeholders – such as universities and innovation agencies – as well as the agility and prowess of startups.
Companies across the continent are using external data in addition to their internal data, to better understand and pursue new business developments in the continent’s innovation ecosystem. Here, we’ll explore how African corporates are innovating intelligently which is resulting in the ability to make better business decisions.
How It’s Being Played Out IRL
In his book Outside Insight: Navigating a World Drowning in Data, Meltwater’s founder, Jorn Lyseggen, unpacks the edge of the intelligence and value that both proprietary and third-party data has an impact in, in what he calls the “new decision paradigm,” giving corporates a competitive advantage and enhancing their decision making.
One of South Africa’s oldest banks recently invested in Cape Town-based aerial data-analytics startup, Aerobotics, which makes use of aerial imagery and machine learning algorithms to solve problems in the agriculture industry. Of course, the options for using the same technology and concept across industries like finance and insurance, are endless. This bet on the technology of drones and data science was a deliberate focus on the strategy of the future of agri-finance for the major bank, understanding and recognising that in an aim to win more business, the third party data and use of Aerobotics technology will be a shift in new business and product development across customers and competitors for the corporate.
And, with technological trends like artificial intelligence (AI), advanced analytics and cloud computing, one way in which Accenture in South Africa is making and informing industry with their data, and leveling up competitive intelligence is through thought leadership positioning. This has enabled Accenture to create and enable themselves and other companies to change how people work and live beyond industry, like platform economies through their intelligence, and thus influencing the business intelligence of industry through data.
African businesses are thinking about ways to truly innovate under a framework of open innovation, even though the resources and capabilities may not always be plentiful. Accenture’s Technology Vision 2018, revealed that “ … South African executives (73%) agree with their global counterparts (79%) that organisations are basing their most critical systems and strategies on data, yet many have not invested in the capabilities to verify the truth within it.” Herein lies the opportunity to better scope the future of African innovation.
2020, 2025 and 2030 agendas set by organisations and corporates are not too far from actualisation, and the reality is that innovation is not self-driving but it’s a social concept that needs humans to execute visions. The appetite and curiosity for this new oil that is data and operating through the framework of open innovation is at its peak for intelligent enterprise, so how do we prepare for such innovation?
These present future institutions are the pipeline of talent that will be nurturing the future of work in businesses and its tools in order for us to be technology ready, and to have a workforce that is future-proof.
According to the Global Entrepreneurship Monitor (GEM), the latest report for South Africa has revealed that the country’s entrepreneurial activity is as its highest level since 2013; this is good news, and in order for SMMEs to continue playing their role in the economy, we need to cultivate the space.
Perhaps more entrepreneurs are needed, my argument lies in the kind of capital that’s invested to groom and scale the current businesses that we have to produce the quality entrepreneurs that the country needs. A matter of quality of quantity. In order for this space to thrive, more capital, intentional collaboration and a government enabling and agile platform needs to be enabled.
Open Innovation Culture
The new kind of innovation that’s occurring across industries is able to be done through collaboration. This kind of culture allows for more opportunities to develop products, new customers, charter new territories of innovation and technology, add value to proprietary data and so many new possibilities.
Keep Learning, Keep Going
Lastly, in order to truly crack the code of innovation, this opportunity needs to be taken from a systematic, actionable perspective. Modest investments are being made to continue to study the strategic, operational, regulatory and societal implications of data and intelligence in South Africa’s industries and more capital needs to influence policy. In order for South Africa to participate in such an economy, more research needs to conducted so as to play the game and create an environment where intra-trade may happen.
The Future of Africa
The biggest, oldest and most established companies are most vulnerable to disruption and innovation and the way to beat archaic systems and not end up like a Blackberry or Kodak is to not just look at a company’s proprietary resources and capabilities, but to establish an innovation culture that’s for the present future. In order for Africa to truly be at the forefront of innovation globally, and be prepared for such, all stakeholders will need to realise that innovation requires the trust of stakeholders to collaborate, and the risk appetite for new technology and data to penetrate businesses and the lives of customers to enhance them and make intelligent paradigm-shifting decisions.
This article was first published on Meltwater.
One of the most archaic, traditional systems in the world is getting a facelift, it’s being disrupted from the outside in at a pace that is necessary for the sector to grow. Banking is being turned on its head through the agility and prowess of fintech startups across the globe, and interesting to me is the revolution of partnerships with startups that’s making the threat a sweetened growth hack opportunity.
More and more, we’re beginning to see the quite intentional innovation through large corporates, particularly banks with the agenda of strategic partnering with fintech startups to not only tell a good story but innovating with the intent of incrementally and radically transforming products within the bank’s objectives.
In Africa, we’ve seen successful partnerships like ABSA through their RISE signing POC deal with Peach Payments to test their product and Nigeria’s GT Bank investment in Accounteer with live integration to enable the bank’s financial services are prime examples of how the fintech dream team has mutual benefits for both entities.
Leverage the Open Innovation Agenda (Data, Infrastructure and Technology)
Innovation is expensive, and as disruptive as the process is and as sexy of a story it is to tell, the selling of innovation is nothing compared to the sweat equity involved to successfully take a product to market from ideation. One of the most heartbreaking cycles is witnessing a startup working with an entity, be it an accelerator or a bank with the intention to scale or prove a concept, and the innovation agendas are not aligned. Once the alignment is recognised and relevant, for the bank be it to incrementally or radically innovate their products which has an impact on their systems, or a growth hack opportunity for revenue and having more customers, and adding value to their data and technology. Whereas, the opportunity for startups usually comes in at acceleration of proof of concepts, going to market faster through capital investments and other capabilities and the chance to build on top of the infratrsucture of the bank through open integration.
Access to Capital, Network and Domain Expertise
As I mentioned in the previous paragraph, the opportunity to support startups from the bank’s perspective comes in at monetary investment capital, access to the network that of the bank and the knowledge sharing through domain expertise. In 2017, Merrill Lynch South Africa and Royal Bafokeng Holdings in partnership with Rand Merchant Bank’s Alphacode invested over R4 million in 4 fintech startups for the development of these high impact startups. Through Alphacode, fintech startups like Bankymoon, Livestock Wealth, Slide and Commuscore to name a few have to had access to resources such as an advisory network and a co-working space available.
The Opportunity to be a (First) Customer and The Acquisition
One of the most celebrated bank(able) fintech dream team partnerships is between startup Firepay and Africa’s biggest bank, Standard Bank to launch Snapscan. This partnership worked because of the aligned innovation agendas, and provided Standard Bank the opportunity to provide a solution to and grow their customers and supported the bank’s emerging payments strategy, and for Firepay, to have Africa’s biggest bank not only as a customer but now also as an investor in the business, and the opportunity for their product to scale beyond borders.
The dream team partnership doesn’t not come with its challenges, it’s not all rosy, after all, financial innovation and startups are competing with an archaic system with inertia to change from the security policy to the production management process. Partnering with banks is no walk in the park – especially given the early stages of these kind of collaborations.
As the ecosystem embarks on the journey, it’s key for both banks and startups to recognise that the bankable partnerships are not innovating not against legacy, but with legacy systems because of the valuable intelligence of failure’s patterns and the combination of new models, science and data through which both entities have the capabilities to impact.
And as a final word, ensure that your core values, and not just your technology and data talks to each other.
One of the most exciting things to be at this age is to be young (by age and mind), African and being a part of an organisation at forefront of contributing to the knowledge economy and leveraging the power of data and technology to empower economies and communities. We’re also at a time where the emerging market that is Africa has the opportunity to craft its own the Fourth Industrial revolution perception through not only commodity prices, but to diversify away from these resources and move into sectors which will leverage the opportunity to use open innovation as a tool to shape Africa’s Future Agenda.
Open Innovation is a term coined and promoted by Henry Chesbrough, professor and executive director at the Center for Open Innovation at Berkeley . The professor described it as “ … a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology. The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward. The central idea behind open innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (e.g. patents) from other companies.”
The holistic idea of open innovation relates to creating profit and community from technology convergence of perceptions and an efficient way to operate and find solutions.And although outlined what it is, it is NOT Just crowdsourcing and one dimensional transactions, it’s to foster accelerate creative and business value for all stakeholders involved.
The Global Innovation Index is created and published by INSEAD, the World Intellectual Property Organisation (WIPO) and Cornell University and it covers 127 economies around the world and uses 81 indicators across a range of themes. Although no African countries emerged in the Top 10 of the list, Kenya (80) and Tanzania (96) represented the sub-Saharan African region as innovation players to be on the lookout for. Products and innovations like MPesa, Jumia, Ushahidi and Obami are incredible examples of the type of innovation that can and has come out of the continent.
My argument stems at how better accelerated in proving the concept and taking the product to market could these products have been, had the application of open innovation been applied.
Is it not about time that Africa heightened the advocacy and importance of open innovation? And at that, not just leaving it to one sector, but push collaborative open innovation – the interconnectedness needed to scale a Future Africa Agenda .
One of the most fascinating cases for me is the idea of a Sandbox, which is a cloud based capability that provides access to samples of organisations content and tools and where there’s tangible value for all stakeholders part of the transactions. On Africa’s potential alike, I believe we’re ready for a sandbox, and to this point, not only because Africa data is costly but finding credible sources of data has proven to be incredibly difficult.
Organisations like Fintech Sandbox have shown the value of a sandbox for startup partnerships in Boston, CodeSandbox Live in providing value for real collaboration between developers and Any API which has over 500 open APIs that have benefitted many entities. These entities show us what is possible with the world of open innovation in both emerging ad developed markets.
With the many 2020, 2030 and future plans that Africa has for itself, the concept of open innovation to drive Africa’s Future Agenda is a tool that not only invites the strengthening of intra-African and global knowledge trade , but the opportunity to collaborate with stakeholders in the private, NGOs and public sectors to empower Africa’s success.
Images : EOH and Schema Open Innovation