Small, Medium Businesses in East Africa Must Innovate – Sage

5 years ago | 42


Technology, government support and mentoring programmes all offer potential ways to address this challenge

SMALL and medium businesses in East Africa are resourceful and creative, yet many entrepreneurs lack the time and support they need to innovate in their businesses. Technology, government support and mentoring programmes all offer potential ways to address this challenge.

That was the view of Billy Owino, regional director, East Africa, who said that many Kenyan entrepreneurs had great ideas but struggle to develop them into new business offerings and ventures. This parallels the challenge entrepreneurs face worldwide, Sage research shows that businesses worldwide rank development of new ideas as the most common area of neglect in their organisations.

The problem stems from a lack of time, despite small business owners working over 40 hours a week, according to the Sage research. “We see the same challenge throughout East Africa,” Owino said, commenting on issues raised by the Innovation Africa Summit 2016 in Kenya.

Owino said that there were many promising shoots of innovative growth in East Africa and that the challenge for government and the business community was to nurture them and ensure that innovative thinking spreads across the region.

One focus should be on simplifying red-tape so that smaller businesses can focus their energies on customer service and new ideas rather than on admin and compliance.

“It is pleasing to see that most East African governments are committed to simplifying the day to day basics of business red tape – like paying taxes, securing licences, processing imports and exports, or registering a business,” he added. “But we should be looking at ways to make it even simpler to do business.” For their part, large companies can help by making their paperwork easy for smaller suppliers and paying promptly.

Since broadband is an important enabler of innovation, governments and the telecoms industry should work together to build the necessary infrastructure. Rwanda offers a great example in this regard, with a government-led project to lay down a 4,500km fibre optic backbone.

Likewise, the cooperation between Kenyan government (which is luring tech investors to Nairobi), the private sector and development-focused NGOs has helped to create Nairobi’s Silicon Savannah as hub of innovation and entrepreneurial energy. “Efficient and affordable internet access allows small businesses to innovate by creating new products, services and channels,” said Owino. “It also enables them to become more efficient.”

Training and mentoring small business owners in leadership should be another priority, Owino said. “Many entrepreneurs have innovative ideas, but need help bringing them to life,” he added. “They need strategic and operational support – help in the practicalities of commercialising a product, marketing it and supporting it.”

Technology hubs and accelerators like iHub are doing a commendable job in supporting entrepreneurs in this regard, Owino said. According to him, NGOs like Educate! in Uganda are also helping by providing secondary school students with practical and entrepreneurial education. But much more could be done, for example, larger businesses and multinationals could mentor start-ups.

Innovation should also be nurtured from a young age by encouraging school children to think in creative and entrepreneurial ways and by exposing them to the latest technologies. Governments should work closely with educational experts and other stakeholders to put innovation in the curriculum.

In Kenya, for example, the Digital Literacy Programme will distribute more than 12,000 digital devices to 150 primary schools in the pilot phase.

Owino noted that entrepreneurs in East Africa can also clear time in their schedules for innovation by putting the right systems and processes in place. Mobile technology, cloud business applications and other tools can help small business owners to boost their productivity so that they have more time to focus on developing ideas, he adds. For example, payroll and accounting software streamline much of the financial administration business owners need to do.

“As we have seen from successes like Ushahidi, M-Farm and M-Pesa, East Africa is taking its place on the world stage as place of innovation and opportunity. For our region, it comes naturally to leapfrog legacy technologies, find ways to work around infrastructure limitations, and reuse and combine old ideas into something new,” Owino said. “This is the work that East African entrepreneurs do every day as they power the economy. It is their entrepreneurial spirit that makes the difference and they deserve our support.”

—  Sep 21, 2016 @ 14:40 GMT


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