Leapfrogging Rival Technology By Taking A Different Path

Learning from Africa

As of June 2016, there were 39.7 million mobile subscriptions in Kenya, equating to 90% penetration. In the same year there were 26.3 million mobile money transactions. What is most surprising though is that Kenya, a world leader in mobile money payments, is rated 124th in the world in terms of traditional land-line infrastructure. Kenya appears to have bypassed a step in the technological journey. This is referred to as leapfrogging, where a company, a country or a person is able to leverage technology to catch-up with, or in the case of Kenya, overtake their competitors without having to invest in the same steps or infrastructure used previously. In the United Kingdom, small challenger banks such as Revolut and Monzo have been able to quickly take on large established high-street banks as they have not been constrained by the old and costly infrastructure which still exists at their competitors. By taking a different path, they have been able to leapfrog their rivals in terms of mobile banking.

Mobile phone technology has also been powerful in other countries in Sub-Saharan Africa. Mangwee is an early stage start-up addressing a key issue in Zambia – poor access to bank accounts. As financial institutions are scarce, bank accounts are difficult to set up, and as a result, the majority of the population keeps their financial assets in cash. It is common in Zambia for families to send cash to their relatives in the form of remittances, however, this can be unsafe and very costly if using services such as Western Union. In light of this, they have built Zambia’s first mobile wallet allowing users to transfer money from peer-to-peer and from business-to-employee. Through deploying Mangwee ‘agents’ on the ground, acting as small financial institutions across local communities, it enables users to digitise their money by debiting their e-wallet account with cash. Mangwee users now have a viable alternative to sending money to anyone and anywhere, paying bills and making online transactions.

Leapfrogging technology in other sectors

Leapfrogging technology, however, is not only confined to financial services technology. Agriculture is Africa’s largest economic sector, amounting to 15% of the continent’s GDP. There are many emerging technology solutions to help innovative the agribusiness sector. One such innovation is a soil testing device company called UjuziKilimo. 95% of African farmers don’t soil test which leads to the majority not fully understanding their soil composition. This, coupled with altered growing seasons due to climate change and over-fertilisation have led to farmer’s crops failing more frequently. UjuziKilimo’s device digitises the entire testing process and accurately measures the soil’s attributes. The device will send an SMS with soil results and bespoke recommendations based on one’s soil type, in real-time. Previous soil testing used to be a very analogue and slow process with the likes of litmus paper used to test soil pH – only one of many key indicators of soil health. Such tests rarely exist in Africa. UjuziKilimo’s device provides a faster, more accurate way of determining soil health and simultaneously sends recommendations on what chemical inputs to use. This optimises crop yield, tackles food security and helps cut back on over fertilisation for small-holder farmers.

A notable Tanzanian start-up working in the education space is Mtabe. Internet penetration in Tanzania is only 45% whilst mobile phone penetration is 80%. Despite these penetration rates increasing every year, school children struggle to access a quality education due to constrained resources. As a result, there are few libraries, computer labs and textbooks. The case is worse in rural areas due to further constrained school budgets. Mtabe have built an AI-powered, Q&A platform. Students can ask questions based on their subject and the Mtabe platform will provide curriculum aligned answers – all via SMS – eliminating the need for internet-based education resources. Mtabe is an excellent way for school children to find an alternative way in accessing quality educational resources without the need of the internet.

Mtabe has potential going forward. Internet penetration rates and lack of text books affect both student education and the ability for teachers and schools to track student progress. Through Mtabe’s Q&A platform, teachers can set homework, quizzes and exams and their results can be logged under a progress report for each student. As Mtabe scales across Tanzania and beyond, they will build both a macro- and micro-level data set of education results, invaluable for both government and private sector companies.

These aforementioned emerging tech companies have the ability to contribute to a wealthier, healthier and better educated continent. However, their applicability goes much wider than Africa and it will be exciting to track their journey to see how they have made global impact in the coming years.

Liam Lewin-O’Cuinn heads Innovation at The Baobab Network – Africa’s Social Impact Technology Accelerator –  finding new and exciting ways to connect large corporates with tech start-ups across Africa to address some of the biggest social and economic issues across the continent, and globally.

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