What the people behind these innovations have in common is that they are simple and have simply taken what already exists elsewhere to create a much needed breakthrough in addressing problems of underdevelopment across Africa. They are also scalable, portable and are great because they show that the developed countries have nothing to fear in Africa, if they are willing to adapt their technologies to African conditions.
First, though, let us remind ourselves what innovation is.
www.businessdictionary.com defines it as ‘The process of translating an idea or invention into a good or service that creates value or for which customers will pay’.
Customers determine what constitutes value on the grounds that what they pay for meets a need or a want. It is futile to argue with a customer about the value of what we provide as businesses, because we can never really win. If they do not perceive any value, they simply will not pay. Equally, if they see value in what we offer them, but they cannot afford it, the uneconomically low demand will wipe out any need of supply.
These solutions fit this definition perfectly, proving that innovation need not be an invention. If anything, the brains behind these innovations only invented a new way of using what we take for granted.
Insurance need not be a grudge purchase - MicroEnsure
I am sure you have never felt like hugging your insurance company or smothering your insurance salesman with loving kisses; even if they miraculously settle your claim without hassles. If they do, after all, that is what you would expect after stuffing their bank accounts with one-way thankless payments called monthly premiums. In most cases, our relationship with insurance is like a forced marriage. Ever tried to finance a vehicle without insurance?
What makes insurance even more loathsome is the fad of no-claim bonuses. These are often quoted in today’s money, promising us an opportunity to go on holiday in 15 years, if we do not claim. Okay, so these insurance leeches and their actuaries have figured: not only are we happy to pay high escalating premiums, we do it so that we can go on holiday after not using what we pay for over a period of 15 years!
The combined effect of the business model of insurance companies and the lower per capita income in developing countries is the inability of low income groups to buy insurance.
Would it surprise you then, that according to the South African Insurance Association in 2013, only 35 percent of the vehicles on the road were insured? Think about it: if there are 10 cars on the road and yours is one of them, only 3 would be covered by insurance; plus that 0.5 percent of a car or half a car! That might be the one half of your car after you would have been smashed by one of the uninsured cars into two pieces.
In 2012, a report by Ventures Africa stated: ‘Kenya has 46 insurance companies and 4,576 registered insurance agents, yet a paltry 3% of Kenyans have insurance cover. This is in sharp contrast to countries like South Africa, with a 9% penetration or Malaysia, which has an estimated 41% of the population covered by some form of life insurance’.
Enter MicroEnsure! The company’s Marketing Director, Peter Gross, told me that his company, which was founded in 2002 by Opportunity International and supported by a multi-million dollar grant from the Bill & Melinda Gates Foundation in 2007, uses alliances with broad-based community organisations to increase access to affordable insurance.
Imagine getting life cover that is pegged to the amount of airtime you use. Gross said that because people have a better relationship with their mobile phone company, for instance, it is easier for them to trust it as a provider of insurance. In return, the mobile company enhances the loyalty of its customers by offering them more than simply airtime – rewarding their patronage with insurance. Too good to be true? Only to the uncreative.
MicroEnsure claims on its website to serve ‘15 million people in 17 countries around the world with insurance, the majority of whom have never before been insured.’ In 2014, they added 8 million new customers in Africa alone.
This is no different from voyager miles, e-bucks or any other loyalty programme. Nothing new, just a new way of thinking to solve an age-old intractable problem.
Sproxil – no fake
Most of us have seen or bought fake DVDs or sneakers. Imitations of brand names are commonplace, but imagine buying critical medication, only to find out that it is not the real deal. While a fake DVD might annoy you with a less than optimal picture quality, a counterfeit drug can kill you.
Sproxil estimates that more than 700,000 deaths a year are caused by counterfeit malaria and tuberculosis drugs worldwide – but emerging markets carry the brunt of this scourge. That is why Sproxil deploys its trademark ‘Mobile Product Authentication technology’ which ‘drives revenue and engages consumers at point of sale through brand assurance, fraud protection, and loyalty rewards’ in emerging markets such as Nigeria, India, Ghana, Pakistan and Kenya.
CEO and Founder of Sproxil, Dr Ashifi Gogo, explained the way his company operates in a simple way. Authentic products, medical and otherwise, have a unique serial number and bar code. Their app allows a buyer anywhere in the world to scan this bar code with a mobile phone and verify the authenticity of the item in a matter of seconds.
By enabling buyers to be confident that they are procuring the real thing, and manufacturers to protect their intellectual property, Sproxil contributes to lower death rates and makes emerging markets attractive to investors who depend on royalties for their inventions.
No wonder Dr Gogo is among Fortune Magazine’s top 40 leaders under 40 years of age and is included in the latest Salt 100 Compassionate Leaders’ List. The latter promotes what founder Stephen Vasconcellos-Sharpe calls ‘a more conscious and equitable economy’ – something which resonates with Tony Elumelu’s Africapitalism.
M-Kopa: pay as you go solar energy
We all agree that electricity has to be generated from renewable resources instead of fossil fuels. The problem is that, for all our talk about the abundance of solar energy in Africa, the technology remains unaffordable.
M-Kopa walks a different talk, thanks to the company’s innovative financing of solar energy equipment in countries like Kenya.
With ‘power for everyone’ as its tagline, this company provides customers with a home-based solar system. The customer buys solar energy using the same technology they use to buy airtime, allowing them to switch their power on and off according to their needs and budget. After 12 months of regular payments, the customer owns the solar system – and can continue to buy solar energy on a flexible system which allows access to electricity on a day-to-day basis for as low as 45 US cents.
What these three innovative solutions can teach us, because all the three companies when I interviewed them were either in the US or the UK on a trip to meet investors or partners, is that the developed world and the developing world stand a better chance of succeeding in solving the problems of poverty if they work together. It is multilateral win-win economics.
Just like M-Pesa in Kenya took technology from the UK to design a pioneering African solution to an African problem, Sproxil, M-Kopa Solar and MicroEnsure are applying established technologies to problems of inclusivity. Africa and the rest of the developing world need solutions that work. It would be inefficient to re-invent technologies for Africa when such exist elsewhere. It would equally be folly to import holus-bolus first world technologies without adaptation to local conditions.
These examples of innovation address both these concerns; and that is why they are winners.
