The advent of digital disruption, underpinned by increasing levels of internet penetration and sophisticated global logistics, has broken down geographical constraints – providing connectivity to millions of people across Africa, and creating opportunities for small and medium enterprises (SMEs) to grow their businesses in 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.
FedEx Vice President Operations for Sub-Sahara Africa, Mike Higley says, “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 without a doubt 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, either geographic or infrastructural, is insurmountable.
“The decentralization 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. It is why FedEx is focused on helping these businesses, and one of the reasons why Africa is so important to us,” says Higley.
Combining the right ingredients for global success
Importantly, Africa has the right ingredients for global success. Africa’s current population of around 1.2 billion is projected to double over the next 30 years, making Africa an exception in a world of declining population growth. Additionally, Africa will soon be the fastest-urbanizing region in the world. Africa already has as many cities with more than one million inhabitants as North America, and more than 80% of its population growth over the next two decades will occur in cities. The income per capita of Africa’s cities is more than double the continental average, making them attractive markets for many individuals and businesses.
Africa has also proven to be an innovator and early adopter of all things digital and mobile. Countries across the continent have shown an incredible 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 percent 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 incredible opportunities to change how people, companies, and ultimately 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.