Annansi Chronicles

Video: Nigeria’s Brain Gain

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Microsoft, GE look to emerging markets for reverse innovation and profits

When GE chief executive Jeffrey Immelt wrote in this month’s Harvard Business Review that GE’s “Success in developing countries is a prerequisite for continued vitality in developed ones” and as a result the company was full on adopting the reverse innovation model, he sent shockwaves through the US-based business world. Looking at the numbers though, who could argue. The HBR article explains that “GE’s revenues outside the United States soared from $4.8 billion, or 19% of total revenues, in 1980, to $97 billion, or more than half of the total, in 2008.” all while the global economic crisis surged on.

… (business leaders) are shifting their energies from managing the present—surviving the financial and economic meltdowns—to creating the future. But we worry that too few U.S. business leaders have recognized that the future is far from home. Indeed, many of the innovations that propel global economic growth over the next few decades will originate in the developing world. – BusinessWeek

While the idea of reverse innovation – or trickle up innovation as the business practice is sometimes called – is nothing new, the business climate is ripe for it’s large scale adoption. With the global economy in peril, and waning consumer confidence particularly in the west, multinationals are increasingly seeking alternatives to old revenue and product development models. Reverse innovation – creating entry-level products for developing nations and then repackaging them for sale in richer nations – solves many problems for multinationals including reducing product development costs and increasing revenue by diversifying globally. But to truly see the gains of a reverse innovation business practice companies must make an honest effort to observe what makes it profitable; most importantly, understanding how emerging markets like China, India, Brazil and Africa, have become politically stable, more self reliant, and how innovation is now driven locally.

In a Businessweek article, C.K. Prahalad, author of the newly reissued The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits gave 5 tips for trickle up business innovation:

• Affordable Products – Emerging nations can’t afford goods priced for the U.S. and Western Europe, which pushes companies to find inexpensive materials or manufacturing options.
• ‘Leapfrog’ Technologies – Developing countries lack 20th century infrastructure and so have fast-forwarded to newer technologies such as mobile phones or solar energy.
• Service ‘Ecosystems’ – Entrepreneurs in poor nations often must rely on others for help, creating new partnerships like video-game cafés where gamers test offerings such as online identity verification.
• Robust Systems – Emerging markets require products that work in rugged conditions. A gadget sturdy enough to survive monsoons can handle spilled coffee in Boston or San Diego.
• New Applications – Customers in poor countries have few product choices, providing market openings for add-ons that update and extend the lives of existing merchandise.

More on Reverse Innovation / Trickle Up Innovation

Interview: Microsoft’s Trickle-Up Strategy – (Businessweek audio)
Microsoft is looking to developing-world audiences for inspiration on new products for the U.S. Now it is also increasingly hunting for R&D talent among students in emerging markets. The company’s Amit Mital explains.

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Feature: Innovation Trickles in a New Direction – (Businessweek video)

Designer Ozwald Boateng on dressing President Obama and his Made in Africa wealth initiative

In this three part series fashion designer Ozwald Boateng talks with CNN about outfitting President Obama for his recent Ghana visit and the designer’s new initiative “Made in Africa”.

Part 1: Tailoring for the President
CNN’s Monita Rajpal talks British-Ghanaian tailor Ozwald Boateng about his rise to fame and tailoring for President Obama’s Ghanaian visit.

Part 2: Made in Africa Ozwald Boateng talks about ‘Made in Africa.’ An organization designed to promote wealth and self sufficiency in Africa

Part 3: Designer to role model
British-Ghanaian tailor Ozwald Boateng explains his plans to help tailor Africa’s image problems.

Growing middle class and Africa’s demographic opportunity

The Economist writes an insightful article about the direct relationship between Africa’s lowering birth-rate, it’s growing middle class, and the continent’s economic growth.

Africa is still something of a demographic outlier compared with the rest of the developing world. …Its population has grown from 110m in 1850 to 1 billion today. …To get a sense of this kind of increase, consider that in 1950 there were two Europeans for every African; by 2050, on present trends, there will be two Africans for every European.

…Yet Africa is also starting out, a little late, on a demographic transition that others have already traced: as people get richer, they have fewer children. …It is surely no coincidence that the past 15 years have seen Africa’s fastest-ever period of economic growth. Africa, exceptional in so many ways, does not seem to be an exception to the rule that, as countries get richer, they experience a demographic transition.

…The result is a “demographic dividend”, which can be cashed in to produce a virtuous cycle of growth. A fast-growing, economically active population provides the initial impetus to industrial production; then a supply of new workers coming from villages can, if handled properly, enable a country to become more productive. China and East Asia are the models. On some calculations, demography accounted for about a third of East Asia’s phenomenal growth over the past 30 years.

The article presents an interesting view. Africa is going through a renaissance of sorts as the demographics of influencers have shifted tremendously in the past 10-15 years. It’ll be interesting to see the shape the continent and it’s cultures takes in the next few years.

More about the growing African middle class in the videos below:

The Nigerian middle class profiled

Ghana on the rise

Middle class life in Nairobi, Kenya

Birth and boom of a new African design industry

A recent article in African Business magazine looks at the recent boom of modern African designers on the continent and internationally. From February’s ThisDay Arise Magazine African fashion event at NY Fashion Week to architect David Adjaye being appointed to design the new African-American National Museum in Washindton DC, the influence of modern African design in global culture continues to solidify. But while there are more and more role models for budding African designers, there’s still a long way to go before Africa itself recognizes and taps into it’s strong creative capital.

To become truly competitive though, the continent must do things in
its own way, with its own brand of excellence and innovation. Africans
can grasp the best of design worldwide, as well as the best the
continent has to offer and transform it into something new, compelling,
beautiful and sustainable. Small pockets of success show that African
design development has reached the point at which it can play a very
real role in addressing poverty and unemployment throughout the
continent. From craft initiatives in rural villages to
multi-disciplinary industrial projects that boast global collaboration,
design can boost a nation’s GDP. (more)

CNN also reports on a new contemporary African design aesthetic in the video below shot at the 2009 Design Indaba in S. Africa.

Ethiopia adds luxury coffee to brand identity

Whether you’re religious about your coffee or just a casual drinker, you’ve no doubt seen mention of Ethiopian coffee on some sort of packaging or marketing. Well beginning this month the brand identity and marketing of Ethiopian coffee will finally be regulated and controlled by the Ethiopian government. After a long fight with coffee giant Starbucks, in early 2007 the Ethiopian government won the the rights to trademark it’s coffee beans which account for about 2% of Starbucks’ coffee purchase. In a effort to use Starbucks as leverage and re-position the country Ethiopia within the luxury lifestyle so many of us attempt to live out by drinking our premium coffee, the Ethiopian government recently hired UK-based design firm Brandhouse to create a series of new brand logos to use in it’s upcoming coffee marketing push. The new logo featuring a letter “E” in the form of a coffee bean over the name of the countries most popular coffee varieties Harar, Yirgacheffe or Sidamo, accompanied by the slogan “Ethiopian Fine Coffee.”, was designed to “establish Ethiopia’s reputation for high-quality coffee around the
world, like French wine, Russian caviar, or Cuban cigars.” No doubt the Ethiopian government have realised how their country’s natural resource is a coveted commodity around the world and is using Starbucks’ marketing techniques to try to get a larger share of the revenues from their number 1 export. Hopefully the marketing plan for Ethiopian coffee tells the story of how Ethiopia has long been considered the birthplace of coffee. Stories sell products and brands, and if done well a story from the originator of coffee should sell foreigners on the image of a bountiful, resource-rich Ethiopia, a stark contrast to the current story of Ethiopia resounding in tourist and consumer minds.

Annansi Notes: Fall Out Boy, Mandela, Clint Eastwood, African babies, Facebook in Kenya

• Fall Out Boy head to Africa….Uganda really (What’s a rock band’s image without an African charity connection. Shout out to director extraordinaire Alan Ferguson) )
  
• Clint Eastwood will direct Morgan Freeman and Matt Damon in a new Nelson Mandela movie “The Human Factor” (The Hollywood/Africa trend grows. They should expect a call from some concerned Africans real soon.)
• Facebook is the new office fashion in Kenya (Rupert Murdoch needs to get the Myspace/Wall Street Journal thing sorted out fast)
• Actress Mary-Louise Parker adopts a child from Africa (Can all these African childrens’ biological families get visitation visas now?)

Video: Journalist Andrew Mwenda on the dark side of African aid

UNICEF: Mudfaced African children need your help!

If there was any doubt about how ineffective and out of touch old-world charity organizations have become when it comes to Africa(ns), here is an example. UNICEF Germany put time, effort and valuable resources into producing this recent ad campaign which “shows four German kids who appeal for solidarity with their contemporaries in Afrika”. In an attempt at drawing a familiarity between German and African children on the topic of education Jung von Matt/Alster – UNICEF’s ad agency – came up with the brilliant idea of showing typical German children with mud spread across their faces. Taglines for the ads include: “In Africa, many kids would be glad to worry about school”, “Some teachers suck. No teachers sucks even more”, “In Africa, kids don’t come to school late, but not at all”, and my personal favorite “I’m waiting for my last day in school, the children in Africa are still waiting for their first one”.

Needless to say, the ads have caused a lot of controversy. When “help” efforts like UNICEF’s and the eerily similar Giorgio Armani’s Kate Moss cover are so off mark, you know there is a serious need for African intervention at the planning stages. Someone tell these guys to give me a call before they embarrass themselves further and continue to lose money.

More coverage:

• Sokari and other Africans give comments
• Jennifer Brea breaks it down on The Guardian’s blog
• RADAR Magazine mocks the campaign
• Media Bistro asks WTF??!!
• alena Amusa tries to educate UNICEF
• UNICEF apologizes??? (not really).

Forget aid and money, Africa needs IDEAS!

If ideas are capital, why is Africa investing more on things than on information, and more on the military than on education? Suddenly, I realized what this idea could mean for Africa. If the pen is mightier than the sword, why does a general earn more than the work of a hundred writers combined? If ideas are indeed capital, then Africa should stem its brain drain and promote the African Renaissance, which will lead to the rebirth of the continent. After all, a renaissance is a rebirth of ideas. And knowledge and ideas are the engines that drive economic growth.

From Philip Emeagwali’s speech delivered at the University of Alberta, Canada, September 23, 2006 (read more)