Africa’s Tech Sector is set to Disrupt Old-School Business

Although it is the last continent to experience rapid economic growth, Africa is a market with massive amounts of untapped potential and is set to have a technology revolution. Over the past few years, the number of technological hubs in Africa has nearly doubled; from 314 active hubs in 2016 to 618 in 2019. This jump is a result of an increase in investment from venture capital funds, development finance, and corporate involvement. This increase in technological development corresponds to Africa's position as the world’s second-fastest growing economy, according to data released during the African Development Bank Group’s Annual Meetings in 2017.

Africa provides an ideal environment for technological growth; it’s home to an abundance of youth, poised to be a major compumption market, and it’s population is increasingly mobile-phone enabled. It’s young population, specifically, have contributed and can further contribute to the increase in trained computer engineering talent. Over the next 5 years, Microsoft plans to spend over $100 million on a Global Development Center in Africa poised to employ hundreds of people. As more talent is trained, more companies will look to Africa to invest.

Disruptive technological progress is transforming the way Africans and others do business in the region. By observing lessons learned from developed economies, Africans are skipping over old technology and adopting fresh and disruptive solutions that create new business opportunities and change the lives of millions of Africans. Africa’s unique socio-economic challenges have resulted in local-driven ideas; mobile money platforms and tech hubs are facilitating the implementation and success of these solutions. Old school business and technology is no longer the way to go in Africa’s new economic and technological landscape.

Before this progress, international investors were wary of investing in Africa forthright and locals favored low risk real estate investments. Now, investors have realized the potential in the African tech sector, prompting a trend to increasingly fund African tech start-ups. In our next post, we’re excited to discuss the world of FinTech and how it has developed in Africa.