September 05, 2007
Just Doing It
Nobody likes meetings. And certainly the group that the Global Innovation Outlook assembled in Cape Town for our final deep dive on the economic enablement of Africa recognized this fact. They knew that these deep dive meetings will be successful only if they serve as a means to an end, only if there is a consequence, an action. These were not people who enjoyed sitting in a room, pondering the issues. They wanted to get things done.
“I don’t think the world needs another think tank,” said Amanda West, vice president of global innovation at Reuters. “What we need to be is a do tank.”
This sentiment resonated around the room immediately. The group included representatives from South African energy giants PetroSA and ESKOM, microfinance and private equity enablers Kiva.org and AfriCap, two groups designed to foster and support women-owned businesses, logistics and shipping company Safmarine, three of the finest universities in the world (Makerere, Instituto de Empresa, and the Royal Academy of Engineering), Siemens South Africa, Reuters, and the U.S. Embassy here in South Africa. We also welcomed a young entrepreneur from the Maasai tribe in Kenya, who runs a safari business in the Maasai Mara game reserve.
Some of them were new to the process. Others had been with us in previous deep dives. But they were all there because they share a simple belief that Africa has the potential to develop and grow in a way that is positive for both the continent itself, and the rest of the world.
It was clear from the outset that change was the mandate for this meeting. One diver said “I don’t think we should embark on this thing unless our intention is to seriously disrupt.” Another said, “I’m a strong believer in taking the first steps.” And Nick Donofrio, the executive vice president of innovation at IBM, reminded the group that “if nothing changes, nothing changes.” Finally, one dive implored us to be like Nike, and “just do it.”
And then we did.
We spent the entire afternoon in breakout groups with specific assignments. The tasks were difficult and daunting. The process was frustrating and uncomfortable. And the time was too short. But few could argue with the results. Here is a quick look at the three projects the GIO crafted during this workshop and will be working on in the coming months:
Skills Audit – Africa has more than 900 million people, but there are massive shortages of skilled labor. More importantly, if Africa is to emerge as a leader in the global economy, it will need to do more than just fill the skills gaps that exist, but also begin planning for future demand. One group proposed a comprehensive “Skills Diagnostics” exercise that would provide a template for how to bring together the private sector, government, academia and the NGO community to conduct regional studies that gauge the demand for different skills. That information could then be shared throughout Africa, creating a detailed skills map. The information would be hugely valuable, and could be used by governments to forecast future skills needs, and develop economic strategies accordingly.
Africa Grid – Microfinance has been a Godsend for thousands of individuals and small business owners throughout Africa. But it is expensive and inefficient. Loan officers on motorbikes need to travel for days to collect loans. And the interest rates are still too high. So one breakout group proposed an in-market initiative (for profit) that would act as an electronic broker of these microfinance transactions. The microfinance institutions could use the service to find potential customers, and vice versa. Along the way, data could be collected and aggregated on various borrowers, creating much-needed risk histories, which would then act as a new form of collateral for increasing loan amounts.
The Legal Informal Economy – Early on in our Africa deep dive session in Kenya, we began discussing the role of the informal economies of Africa. These off-the-books businesses are pervasive, sometimes employing more than half the population in some nations. But there is a need to legitimize these businesses, both for the tax revenue they would provide, and the benefits citizens obtain through registering themselves as such. This group decided that the barriers for most informal businesses to enter the formal economy are too high: taxes can sometimes be as high as 45 percent. So they proposed a new level of legitimacy: the registered, but untaxed business. They called it the “Legal Informal” economy. There would be incentives for these businesses to register, including small business assistance, access to new forms of capital for growth, technology infrastructure, and business training. After a time, they might grow to a level where they could then become formal businesses, employing more people, and paying taxes.
These issues are all incredibly complex, so please forgive the lack of details in these proposals. But these ideas represent real action towards change. People volunteered their organizations for participatory roles. Companies made commitments. Names were named. And in the end, momentum won out over inertia.
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Posted by: larisa thuije | Sep 6, 2007 1:04:48 AM
The most difficult problem one faces to launch a new business is finance. New business loans give them a great opportunity to open their business .This kind of loan helps them to stop worrying about the finance and start the business as and when they want.
Posted by: Clark | Sep 6, 2007 2:07:23 AM
I have been reading these blogs, as undoubtedly many have, with admiration for the scale of this whole effort. It is not surprising at all that with time, a sense of worry would seep in - Worry that people were talking but not really DOING much of anything.
Remember that it is not simply what the people involved in the Deep Dives accomplish. Actions taken by external organizations, motivated as a consequence of these meetings, are important as well!
This is one of the lessons of Ted Turner's UN oriented public efforts of the 1990s. His attempts to pay the outstanding debt of the United States to the United Nations may have failed, but his message was heard, and frightened many complacent decision makers in to action. This may happen as well with insights developed at these dives concerning China's economic influence in the region.
In the end, of course, Turner made an enormous contribution with his UN foundation.
Back to the topic at hand however:
There is one subject that irks me a bit - It is in discussions of 'Informal Economies'. It may be beneficial, and important to consider this topic, but it is also legally dubious. The appropriate solution is for the countries where these transactions take place to recognize they are symptomatic of failed fiscal policies, and the need to restructure tax codes.
It would be a terrible shame if the governmental agencies in the region were excluded from participation in Deep Dives over tax enforcement issues. This is a barrier that needs to be considered.
Posted by: Tim Raisbeck | Sep 8, 2007 1:55:57 PM
Note, of course, you did address the last concern in this Blog post. I do worry, however, about the impact of some of the previous meetings that included discussion of Informal Economies.
Posted by: Tim Raisbeck | Sep 8, 2007 2:11:23 PM
Microfinancing enables parents to provide a valuable gift to their children - education. During a recent trip to Kenya, I found the Kenyans on the whole to be industrious, kind, and focussed on improving their lives and their nation. Microfinancing is the first step. Formal education is the natural result. Schools need assistance, as well. With enablement, schools are turnign out literate, multi-lingual scholars who are committed to their educations. Invest in the infrastructure and you will see Kenya (Africa) emerge as the thes next source of global talent.
Posted by: Linda Wilkinson | Sep 17, 2007 10:35:02 AM
I agree with Larisa. Starting a small business requires business capital. And it is best if you employ a company that has experience in the industry of business loans. Unsecured Solutions has helped small business starters secure over five hundred million dollars alone in the past year. http://www.unsecuredsolutions.com
Posted by: Small Business Loans | Dec 29, 2007 7:58:42 PM
Thanks for the suggestion. I will have to check out your website.
Posted by: Fred | Jan 7, 2008 9:52:59 AM
thanks for this one!
Posted by: dax | Jun 4, 2008 12:11:21 AM
We should look into the root problem of it.. 900 million people and shortage of skilled workers?
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Posted by: unsecured business loans | Nov 13, 2009 10:35:07 AM
I mean, focusing on Africa's market is fine and dandy, but how will we help their country if we can not get our own to stop reeling on the ropes?? Credit has been frozen far to long and needs to be "thawed out" immediately. Maybe with the introduction of some new business loans will have us headed in the right direction. Then we can help Africa. Should be focused on Haiti if we really wanna help out.
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Posted by: tory burch reva | Jul 26, 2011 7:18:06 PM
I am out of the office until 08/08/2011.
Ill be out of the office until August 8th, checking email infrequently.
Note: This is an automated response to your message [Global Innovation Outlook] tory burch reva submitted a comment to Just Doing It sent on 7/26/11 20:18:07.
This is the only notification you will receive while this person is away.
Posted by: GIO Editor | Jul 26, 2011 9:02:14 PM
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