For SMEs and start-ups to thrive in the competitive world of business, they need to progressively innovate to ensure that goods and services reach untapped customer needs.
Similarly, business models must allow innovation to flourish, where accelerators and innovation hubs have an important role to play in nurturing talent and identifying and supporting future unicorns.
These were the words of Head, Strategic Partnerships, Microsoft 4Afrika, Soromfe Uzomah, while speaking on the theme, ‘Should post-COVID reimagining prompt African SME’s to revisit their business models?’, in Lagos.
While the COVID-19 pandemic has presented significant challenges to SMEs, Uzomah said it also represents opportunity to adapt to make the most of their resources. Business model innovation is one of the most effective ways for companies to stand out from the competition and secure their futures, particularly in turbulent times. “We must strengthen the innovation ecosystems in Africa,” he added.
He said invention is important, but it only becomes innovation when it solves a customer problem and has a business model that creates or captures value. However, innovation in Africa is often stymied by resource constraints, a lack of access for SMEs to financing, a lack of technical skills and inadequate infrastructure that make it hard to generate profits and generate the growth needed to survive.
Already, McKinsey had reported that Africa has large unserved markets and companies need the imagination to see unmet demands or unsolved problems as opportunities.
Indeed, he noted that smaller and medium-size enterprises (SMEs) have a critical role to play in accelerating economic development, serving the unmet needs of African markets, and especially creating jobs.
According to him, four innovation practices are important namely, creating products and services that fulfil Africa’s unmet needs; rethinking business models to truly engage with customers; getting lean to drive down costs and price points; and harnessing technology to unleash the next wave of innovation.
While Africa has been viewed as being behind the curve in recent decades, he said it is quickly becoming a hotbed of innovation, and the continent is now an eager adopter of and innovator in all things digital and mobile.
Alluding to the fact that there are several challenges, he said the seed of innovation has taken root. African startups and SMEs, along with non-profits and big companies, are using innovative technology to solve pressing needs in their communities.