One Entrepreneur’s Plan to Transform Africa

Fred Swaniker is an entrepreneur and leadership development expert making a huge social impact in Africa, where he founded the African Leadership Academy, the African Leadership Network and his latest effort, the African Leadership Universities. Named one of the Top 10 Young Power Men in Africa by Forbes magazine, among other honors, his long-term goal is to revolutionize the continent’s economies from the educational system up. In a recent interview with Katherine Klein, vice dean of Wharton’s Social Impact Initiative, Swaniker explained his ambitious plans for Africa. 

An edited transcript of the conversation appears below.

Katherine Klein: Is Africa a good place for business today?

Fred Swaniker: I think that Africa is the most exciting place for business in the world. It offers the second-highest rate of return globally in terms of investments today. But more importantly, I think that there are certain long-term trends that are taking place in Africa which provide fantastic opportunities for investors and business leaders to actually not only have impact and feel good about investing, but also to really make a lot of money as well.

Klein: This is not the image that we are likely to get of Africa on the front page of American newspapers, for example.

Swaniker: No, not at all. And I think it’s also quite different from the way, for example, Chinese investors are seeing Africa. And I think the way I look at it is that the average American business leader never remembers a time when the USA looked like Africa does.

If you think about it, the U.S. has been fairly developed for the last hundred years, right? So your parents or your grandparents never remembered a time when this country looked like Africa.

But if you think about how fast China has developed, and where China was 30 years ago, for the average Chinese business leader going to Africa, they look around and [they say], “Oh, this looks like what China was like 30 years ago.” They don’t think, “This is a place I come and do charity and give to people who are in need.” They think, “This is a place for me to come and do business, because I actually get to do what we did in China all over again.”

And I think that this is the block that most investors in the U.S. have — it’s just difficult to go there and imagine that what you see could actually be any different.

Klein: So, what you’re saying is this is a time for investment in Africa, not charity?

“There’s nothing special about the water or the air in Silicon Valley. The only difference is that [there], venture capitalists, investors take a 17-year-old kid with an idea seriously.”

Swaniker: Absolutely, because there’s no region in the world that has developed through charity. The only thing that drives prosperity and job creation and brings people out of poverty is entrepreneurship Twitter , is business. That’s what creates. There’s not enough government spending, there are not enough charities, there’s not enough aid to drive development. It has to come from the ground through entrepreneurship. And that’s what Africa needs at this point.

Klein: So, talk to us about the needs in Africa. What will it take to build entrepreneurship in Africa and to build employment in Africa? And what are you trying to do to move the needle?

Swaniker: In any part of the world, for an entrepreneurial venture to take off, there are three things that need to come together: You need an idea; you need the team that can execute the idea; and you need some capital.

In the U.S. and more developed markets … you have plenty of people — thousands of people who are educated at top universities every year. There’s a long, long, huge, huge stock of human capital that can execute things. There are billions of dollars of capital, trillions of dollars of capital that’s available to invest in things. What is scarce in more developed markets are the ideas, because so much has already been done through years of development.

You go to Africa, the mix of those three things is different. The ideas are plenty. Everywhere you look, you pick up a stone — there’s another idea, right? And you don’t have to be a rocket scientist at all, because you just have to look at what are simple businesses that are offered elsewhere that have not been offered yet in Africa, and you just have to almost copy those. There’s no chain of retail stores. Oh, maybe I should build supermarkets here. There’s no system of consumer credit. Maybe I should be the first to introduce credit cards or other forms of consumer finance. There isn’t enough education. Maybe I should build a chain of for-profit schools.

So, it’s not complex ideas. [There are] plenty of ideas. [And] increasingly, actually, the capital is available in Africa. It’s not necessarily U.S. capital, but there’s more and more capital coming into Africa. What is scarce are the people who can execute these ideas. And so, what I’ve devoted my time and my real passion is in creating those people. Developing those people who are going to be the leaders and entrepreneurs who are not only going to establish small-scale enterprise, but are also going to establish large-scale, investible enterprises that will create hundreds of thousands of jobs and that are really going to bring Africa out of poverty. That’s my passion.

Klein: Ten years ago, you founded the African Leadership Academy, and this was probably your first major play. So, tell us about that: What is the African Leadership Academy?

Swaniker: If you think about a lot of the world’s great entrepreneurs and great leaders, they started young. You think about Richard Branson, he was 16 when he started Virgin. Bill Gates was 19 when he started Microsoft. Steve Jobs, same age. Mark Zuckerberg, 17. The founders of Google were 21. This is really very often the lifeblood of entrepreneurship — it’s young people who are not afraid to dream big and who have the energy to really bring tremendous ideas to life.

“The only thing that drives prosperity and job creation and brings people out of poverty is entrepreneurship, is business. That’s what creates.”

Throughout Africa, these young people exist. What hasn’t existed in the past is someone to believe in them and to give them chance. I went to business school at Stanford. And one of the reasons I was curious about going to Stanford is I really wanted to understand what’s different about Silicon Valley that creates all these tremendous entrepreneurs that changed the world. Is there something special in the water that they drink there? What is really unique?

I went there, and there’s nothing special about the water or the air in Silicon Valley. The only difference is that venture capitalists, investors take a 17-year-old kid with an idea seriously. And next thing [you know], a Facebook is created. So, I thought, what if we could go around Africa and find the same equivalents, the African Mark Zuckerberg at 17, the next African Steve Jobs or the Bill Gates or the next Nelson Mandela at the age of 17, 18, 19? And then bring them into a special program where you develop their entrepreneurial leadership skills.

You give them more class education. And then you also plug them into very a powerful network — because I believe that no matter how good your skills are as a leader or an entrepreneur, if you don’t have access to the right mentors, people who can invest in you who can open doors, introduce you to your first customer, etc., you’ll never be able to take your potential to the full level.

So, that’s where we started.

It’s a two-year program. We get about 3,000 to 4,000 applicants a year from across the continent, 48 different countries. We select the top 100. They join this program for two years. We educate them. They get hands-on practice.

Klein: So, to be clear, it’s harder to get into ALA than into Wharton or Stanford or Harvard?

Swaniker: Yes. We’re admitting about 3% of the applicants. This is really the cream of the crop of Africa, but we’re selecting them not because of the financial means they have. We’re selecting them because of the potential impact they can have on the continent. Many of them at the age of 16 or 17 have started companies, they’ve invented products, they’ve led political movements in their countries and so forth. And we say, “OK, if you did all this on your own without anyone investing in you, imagine what we can do if we bring you into this network, invest in your development, educate you and then plug you into these networks?”

So, they leave the Academy and then go into top universities around the world. Then they’ll have a contract with us that they must return to Africa by the age of 25 and serve on the continent for at least 10 years.

Klein: This has been obviously a tremendously successful and inspiring model. But you’ve recently said, “OK, that was great but we need to be looking beyond high school, beyond sending African students out to the best universities around the world. We need to create world-class universities in Africa.” Tell us more about that vision.

Swaniker: It’s been incredibly fulfilling seeing the African Leadership Academy come to life. So far, we have 700 young leaders, and over a 50-year time frame this is going to create 6,000 leaders who are going to transform Africa.

But a couple of things have been troubling me. One is that we would get 4,000 applications every year, and we could only take 100 students. So, I thought, “Wow, all these people’s potential talent that we’re leaving on the streets.” And I saw so much hunger. I thought, “How do we give access to more people?”

The second thing that troubled me is that after students came to the Academy, we would have to send 80% of them to college in the States or to Europe. Why are we sending all our students outside of Africa? Why don’t we have the equivalents of Harvard and Stanford and Wharton and Yale and Princeton in Africa — world-class universities that our students can go to?

That’s what inspired me to start African Leadership University. The vision we have is to build 25 brand-new universities across the continent, each with 10,000 students. Over the next 50 years, this will allow us to develop three million leaders for the continent.

Klein: This is a huge dream. Where are you in the process?

Swaniker: We’re opening the first campus in the next few months, starting with about 200 students. And we’re [beginning] on the island of Mauritius. After that, we’re looking to open in other countries around the continent. This is a big dream –we’re not expecting it’s going to happen overnight. I think in terms of decades when I look at my projects, because I really believe that Africa’s development is a 50- to 100-year project. You have to think about long term, and put the foundation in place that’s actually going to develop it once and for all.

It’s going to take us 15, 20, 25 years to roll out these universities. But what matters to us is the quality. We’re going to take our time and do it right to make sure that we can really use this as an engine for driving Africa’s transformation.

Klein: What will your universities look like? Many of the top universities around the world are centuries old, and they’re the most traditional institutions and organizations. They don’t change easily.

Swaniker: Yes, exactly.

Klein: You’re not really asking us to change. You’re asking for a new model of the university in Africa.

Swaniker: Yes, exactly. I think one of the best things about Africa is the fact that we don’t have any legacy. There are so many things that we can do where we can actually create, not just copy a model that is not perfect, but really create a new and improved model. One of the things we don’t have in Africa are faculty who are on tenure who will tell us that we can’t do things differently. We don’t have professors. We don’t have alumni who are going to say, “Well, that’s different from the way I went to school.” We don’t have donors who are going to put pressure on us.

That allows us to say we have a clean slate. Let’s imagine: If you were to build a university from scratch for the 21st century — because as you mentioned, most universities in the U.S. were built — especially the best ones — 300 years ago.

“The vision we have is to build 25 brand-new universities across the continent, each with 10,000 students.”

The world has changed tremendously in that time, but a lot of what happens in these universities has not changed in that time. There are many things that we’re doing to completely reinvent the university. For example, we looked at the length of degree. The typical U.S. college — to go to one of the top universities today, you’re spending about $60,000 a year. So, that’s a $240,000 investment for a four-year degree.

But when you actually analyze the amount of time that students are spending in class, you find that students typically get five to six months of vacation every year. So, you might pay $240,000 to go to an Ivy League university and you get 2.3 years of education. That for us is a travesty. And we definitely can’t afford to do that in Africa.

So, our model is a three-year degree. And during those three years, you’ll spend eight months on campus every year, and four months with an employer. You graduate with actually more education in the three years than a four-year degree and with work experience under your belt already, which also makes you much more attractive to [employers].

Klein: We’re hearing a lot about MOOCs — massive open online courses — and the potential for technology to revolutionize education. Universities in the United States are trying to figure out how to integrate technology — what is the threat to us? But you’re not talking about just online education, are you?

Swaniker: No.… There was a lot of excitement that came out about MOOCs. But what became clear is that that’s not a silver bullet solution because the completion rates are very low. Typically, less than 10% of people who start MOOCs actually finish. And from the beginning, we’ve never thought that that was the answer because the best learning is social. You still need human intervention as well.

[At] our universities, these are fully residential campuses. There’s no option to be a day student. What we’re doing is leveraging the power of MOOCs and other technologies to say, “Let’s break the monopoly on knowledge that any given university might have.”

Today, if you go to a university they’ll force you to take all the content of the curriculum from that university, whether that’s good or bad. We’re saying, you know what, let’s actually go around the world and curate the world’s best curriculum. Let’s pick the best from this university and that university and that university and bring it together in one place. Let’s pick the best from industry. Let’s look at what other research has been done, and bring it together in one place using technology.

Let’s also leverage the power of peer learning. Because what we don’t have in Africa are [enough] professors with PhDs. What we do have are lots of brilliant students. So let’s use that abundant resource. Students will learn by themselves using all this free knowledge that’s out there. They’ll learn from each other. And teach each other. Studies have shown that when you have to teach something to someone else, you learn it much better.

Finally, we will still have faculty on the ground. But the faculty are three types of people. They are recent college graduates, they’re mid-career professionals or they’re retired executives. And we’re selecting them not because they’re good at research, but because they’re really good at teaching and they’re passionate about teaching, which is one of the things I think that’s broken with the university model as well. [Universities are] fantastic for producing research and knowledge for publication. But it’s not always the best experience for undergraduates.

Klein: This could be a very significant disruptive innovation.

Swaniker: Yeah. What if professors do not enjoy teaching, and they haven’t been hired because they’re good at teaching. They’ve been hired and are rewarded for their research. We’re saying, let’s decouple the two — get the world’s best research from different places and find the world’s best teachers and train them to be teachers. And then also support these faculty [members] with a very sophisticated analytical platform that allows them to understand what the students are learning and what they’re struggling with so that they can use it tailor their lessons better.

Also, to make sure that no student gets left behind — because today, sometimes a professor only knows you’re struggling at the end of term when you turn in your paper and you get a D. In this model, because of the analytics, you can pick up where the student is struggling by Wednesday of the week and call them into your office. That way, no one can hide.

“Many universities focus only on giving you theory and content, and hope that the skills that employers want rub off on you by accident.”

Klein: What’s been the response so far to this model?

Swaniker: Well, the response in Africa has been tremendous. I mean, the need is so great. Africa graduates about 45 million students a year from high schools, and the universities can only absorb 4.5 million of them.

The tertiary enrollment rate in Africa — which is the percentage of students who are of tertiary age that are actually enrolled in tertiary institutions — is 8%.

In India, it’s 18%. In the West, it’s about 70%. Just to catch up to India’s level, not even to try to make it to the West’s, we would need to build — because of the rate at which Africa’s population is growing — 135 universities the size of Harvard every single year for the next 15 years.

Klein: Wow. So there’s demand for what you have to offer.

Swaniker: There’s tremendous demand. When we opened our applications for the first class, within 60 days we had 5,000 applications for just 200 slots.

Klein: And part of the training is a lot of internship experience for these students as well. So, the goal is that they are getting a great education, partly through peers. And they’re getting trained for business.

Swaniker: …What we’re trying to do with the internships is to give them skills. Because we believe that — and this is another way that I think the university model is broken — many universities focus only on giving you theory and content, and hope that the skills that employers want rub off on you by accident. We’re saying, actually the real things you should be getting out of university are skills. We make it much more explicit about that, because the world is changing so fast that the actual knowledge becomes obsolete.

If you started doing marketing seven years ago, you’d be talking about marketing on billboards and TV and radio. By the time you graduate, the world has changed to digital marketing. If you started in computer science six years ago, you’d be learning about how to code for the computer or PC and laptop. By the time you graduate, the world has moved to mobile.

Klein: So you want to teach people how to think.

Swaniker: Right. Teach you how to think critically, how to communicate, how to collaborate, how to lead yourself, how to lead others. Those are the skills that will endure with you as the world changes. And so, that’s what we embed in them during their formal time on campus. And then every year, as I mentioned, you’re spending four months with an employer, actually practicing those skills and learning about the industry.

By the time you graduate after three years, you’re ready. You have these skills. You have this work experience. There should be no reason why an employer isn’t clamoring to hire you or that you aren’t equipped to start your own business, which I think we need to do a lot of in Africa, and that’s why entrepreneurship training is such a key part of our [program].

Klein: So, to wrap up, I’ve heard you speak about entrepreneurship and the opportunities for entrepreneurship and the need for entrepreneurship in Africa and the need to deliver the kinds of products that you see in the United States and elsewhere at a much cheaper price, a much lower price. This is really what you’re trying to do with ALU?

Swaniker: Yeah, exactly. You can’t go to Africa with the same business model. There’s a lot of money to be made in Africa. There’s a lot of impact you can have in Africa. But you can’t go there with just the same business model as elsewhere. You need to think completely radically and redesign the model and say, there are consumers there who have needs. And they have some financial means. How do you design a solution to serve that? And very often it involves leveraging technology, like what we’re doing with African Leadership University.

But, similarly, entrepreneurs need to think about how do I do this to provide low-cost housing? How do I do this to provide low cost health care? How do I do this to provide low-cost consumer goods? There’s so many needs and we have a billion consumers. That’s growing at the fastest rate in the world. They’re going to be a population of two billion in the next 30 years.

So, that is a massive, massive market. And Africans are having fewer and fewer children. Therefore, the dependency ratio is going down so Africans will have more money to spend. There’s a tremendous opportunity.

I think that this is really where, especially with aging population in the West, there’s increasing demands on pension funds and so forth to get returns. One of the things that’s going to solve this is investing in Africa.

 

 

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