Leadership, risk and technology
Ongoing economic, social and political uncertainty is a perennial worry for CEOs globally, not least for those in Africa. Concerns over policy uncertainty, skills shortages, over-regulation and exchange rate volatility lead the long list of risks causing CEOs anxiety in the latest Global CEO Survey.
Technology: Threat and opportunity
Business risk is everywhere – internal and external, interconnected and constantly changing. Advances in technology and innovation only add to this and continuing to disrupt business operations. But innovations such as artificial intelligence (AI) and data analytics are also delivering operational efficiencies that may help offset many of these challenges.
Adapting to lower growth in Africa markets
A few weeks before Christmas 2011, The Economist provided a gift to companies searching for the next frontier of expansion and revenue growth: “After decades of slow growth, Africa has a real chance to follow in the footsteps of Asia”, announced the magazine. At about the same time, the International Monetary Fund (IMF) was forecasting average real economic growth of nearly 5.4% per annum in the sub-Saharan African region over the 2012-2016 period.
In 2019, we know that the ‘Africa rising’ narrative has not turned out to be quite as sunny as initially imagined. The slower growth scenario has been a challenge to companies that are already committed to the continent with human, financial and physical capital.
Transforming organisations to be fit for growth
In the face of headwinds, renovating the business model from within to enable growth can be a viable option, but it requires cost cutting, restructuring and human renewal. Companies that are fit for growth focus on a few differentiating capabilities, align their cost structure to these capabilities, and organise their people to create growth within challenging market conditions – like those posed by a low-growth scenario in African economies.
How Africa can grow its innovative companies
When considering economic growth today, two factors can contribute to its increase: capital and labour (inputs), and ideas and new technologies (innovation).
Inputs play a minor role in driving economic growth. Innovation growth – and with it productivity improvements – account for the majority of long-term economic growth. The importance of using innovation as a driver of economic growth is proven throughout the history of the first three industrial revolutions.
Making Africa work
While the emerging technologies of the Fourth Industrial Revolution sweep the globe with threats of replacing the current workforce with robots and promises of transforming Africa’s economic development, the only clear conclusion is that no one really knows where these developments are ultimately going to take us.
Global trends meet African realities
At the same time, Africa will also be experiencing unprecedented demographic changes. From now until 2030, the continent is projected to expand the size of its workforce by more than the rest of the world combined, as its young population enters the world of work.
For today’s young people to realise their future potential, including those in Africa, the power of new technologies will need to be matched by the wisdom and sound judgement of those charged with managing the perils and promise they introduce. Only then will we be able to make Africa work like we know it can.