To set the stage for discussion of new technologies and innovation at the June 2010 Wharton Global Alumni Forum in Madrid, Alberto Durán, founder and CEO of Rio de Janeiro-based Mundivox Communications, had this to say: While technology and innovation will help create the basis for societal growth, it is demographics that have “completely changed the economics of the way we live, and are creating both immense opportunities as well as immense challenges.”
As an example, he pointed to the 85 million plastic water bottles that are thrown away every day. “The pile of bottles in the middle of the Pacific is twice the size of Texas, yet we don’t talk about that,” he stated. “Political will is needed to address these issues. Today, we can create amazing financial instruments to fund real estate, telecom and other industries. Why don’t those instruments exist to fund new technologies for plastic? Someone has to come in and say, ‘Look, we need to do this.’ It is political will that will make this happen.”
Durán also noted the challenges that the global economy will face over the coming decades because of population growth. While 50% of people today live in big cities and 50% in rural areas, over the next 30 to 40 years, 75% will live in cities, and 25% in rural areas, along with a world population that “is growing exponentially,” not in Europe but in the rest of the world, including the U.S., he stated.
Panelist María Garaña, president of Microsoft Spain, suggested that the debate today should focus on practical applications of technology in corporations and on the ways that technology can help improve corporate productivity and competitiveness. “The people who get the most out of technology aren’t the ones who invest the most money in it, but the ones who use it to become more productive. Occasionally, it is enough to take advantage of the tools in technologies you already have at your disposal.” She suggested “abandoning technological messages and additional technical terminology in favor of making information system tools relevant for companies and people.”
In Spain, Garaña noted, “half a million people work in the high-tech sector. Yet the penetration rate of customer relationship management (CRM) information systems is barely 23%. Options such as CRM, virtualization [technology] and mobile technology have enabled companies to reduce their costs by as much as 30%.”
Entrepreneurship in Africa
Two other panelists in the session were Eric Kacou, general manager of OTF Group, a Rwanda-based supplier of services for strategic management and competitiveness services, and Eva Muraya, co-founder and chief executive of Kenya-based Nairobi Color Creations Group. Both executives illustrate the ways in which entrepreneurship is taking off in Africa. “There are more and more successful case histories of African entrepreneurs,” said Muraya.
“Panacea or chimera?” asked Kacou, reflecting the panel’s title. “The answer to that question can be found in a unique sort of entrepreneur. Wherever you look, it’s the entrepreneurs who are capable of turning innovation into a panacea.” Describing today’s situation in Africa, Kacou noted that at least “38 countries have been involved in [military] conflicts over the past 50 years. With the [current economic] crisis, the difficulties involved in doing business [in Africa] have been accentuated. The situation has had an impact on prices, financial markets, exchange rates and debt…. The only solution begins with a change in mentality.” According to Kacou and Moranchel, a significant shortage of confidence exists now as well as a certain skepticism among various governments about the role of entrepreneurship.
At the same time, with regard to Rwanda, Kacou attributes the appearance of a new class of African entrepreneurs to a revolution in the economic assistance policies of the government. “If there are success stories, it is because the government has believed in entrepreneurs. Exports [from Rwanda] have multiplied five-fold over the past 10 years. It is not about copying others or sticking with what other countries are doing, but about creating new things.” As an example, he cited a Kenyan company called Safaricom (www.safaricom.co.ke), which provides communications software that enables sales transactions to occur over mobile phones. “Now the people of Kenya can carry their bank in their pocket. There are no transaction costs because everything is done with wireless.”
Muraya offered her own recipe for succeeding as an entrepreneur. “You need to have a capacity to adapt, while at the same time maintaining your passion and focusing on the concept behind your business. Entrepreneurs also need the right partner who shares their vision and energy.” Microfinancing has played a crucial role and microloans in particular are “very sensitive to the special conditions of peoples who are located at the base of the pyramid” in Africa and other regions in developing countries, Muraya noted. The microfinancing models have benefited women more than they have benefited men, since women are more likely to repay their loans and are more focused on achieving their entrepreneurial goals, Muraya said.
Garaña, who has worked for 15 years in Latin America, joined the debate about the role that developing countries play during a recession. She noted that a recession offers these countries a unique opportunity because their growth has been limited historically by what could be called a “psychological crisis.” This is “not a global crisis,” suggested panelist Antonio Zufiria, IBM’s president for Spain, Portugal, Greece and Israel, “but one that involves the countries of the ‘First World’ — the industrialized nations. Regions such as Africa have a good future ahead of them,” and they have not been as affected by the global recession.
“If we return to the essence of the meaning of the word ‘innovation,’ we will find the answer in our own capacity to undertake new business activities,” stated Garaña. “If there is something positive that can be gotten out of this economic crisis, it is the capacity to reflect about things, to get back to talking about the basics. For many companies, innovation has stopped being considered a business expense; it has become a necessary gearshift for productivity.”