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Tech innovation drives entrepreneurship

Joanne Carew
By Joanne Carew, ITWeb Cape-based contributor.
Johannesburg, 13 Nov 2012

Half of the workers in Africa are employed by SMEs and 40% of Africa's GDP is driven by small businesses. The situation is similar in SA, with as much as 61% of total employment and 57% of GDP made up by SMEs.

These figures were highlighted by Desmond Nair, SAP's director of ecosystems and channel in Africa, in the opening address at the Fourth Annual State of Entrepreneurship in SA Summit, held in Johannesburg as part of Global Entrepreneurship Week. Hosted by Endeavor SA, and sponsored by SAP and SA Breweries, this year's summit focused on empowering high-impact entrepreneurs.

Nair focused on how innovation drives entrepreneurship, highlighting the importance of Africa within the global marketplace. "The opportunity in Africa is endless," said Nair.

During his presentation, Nair showed a video featuring the Star Shea Network, an initiative that uses education and technology to improve the income and living conditions of women in northern Ghana. The network links a Ghanaian village, where shea nuts are the main source of revenue, with nut sellers around the world. The initiative makes use of SAP technology to connect the community with international buyers, rather than communicating via intermediaries. As part of the project, the community members receive shea nut price updates on their cellphones, which allows them to price their products competitively. Through the network, incomes have increased by 82%, according to a study by Stanford University.

"All we really did is made these entrepreneurs stronger sellers by connecting them with stronger buyers," said Nair, adding that this demonstrates how innovative technology can empower small businesses and make them more successful.

Nair also showcased a local example - a Standard Bank initiative that aims to reach SA's unbanked population using mobile technology and SAP's core banking platform. Agents from the bank are able to open an account on behalf of a customer using only a cellphone and the customer's ID book. The users of this technology can buy airtime or electricity, transfer funds and make payments using their mobile phones.

When speaking to small businesses about their needs, SAP found that technology was one of the main problem areas for SMEs. According to a survey by the Economic Intelligence Unit, many small businesses are embracing electronic methods of communication and marketing, with social media featuring significantly in the strategies of these businesses. The survey also found that, over the next year, 46% of SMEs will look to technology as a means to make their businesses more efficient. "The Web, by default, is becoming a part of business. These businesses are looking to improve their bottom lines, and many of them believe that technology is a key enabler of this growth," said Nair.

This sentiment was echoed by Sol Bezuidenhout, associate at Hasso Plattner Ventures Africa, during the morning panel discussion. He asserted that, in SA, issues of scale hinder the start-up technology space, but this is changing. "About 70% of the tech developed in the US is sold only in the US because they have such a big market on their doorstep," said Bezuidenhout, adding that the size of the market means there is a need for businesses that can support the use and maintenance of this technology.

But Kelly Ritchie, owner of SalesPartners Worldwide, puts it all down to timing. When talking about entrepreneurship, particularly within the tech space, good timing is essential because technology changes so quickly. "Speed is fracturing realities, and advances in technology are happening because of this ever-increasing speed. Businesses need to get their timing right in order to succeed."

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