By Lord Mark Malloch-Brown, Chair, Business & Sustainable Development Commission, former UNDP Administrator and Ex-UN Deputy Secretary-General, and UK Minister of State for Africa, Asia and the United Nations
A critical transition from a heavy reliance on international public development finance to locally generated private sector solutions to development problems is underway. Earlier this year, the Business & Sustainable Development Commission launched its flagship report, Better Business, Better World, which makes the case for why the Sustainable Development Goals (SDGs) offer the private sector a growth strategy that opens new market value and helps solve significant social and environmental challenges at the same time. The Commission shows how sustainable business models could unlock economic opportunities across 60 “hot spots” worth up to USD 12 trillion and increase employment by up to 380 million jobs by 2030. In Africa alone, sustainable business models could open up an economic prize of at least USD 1.1 trillion and create over 85 million new jobs by 2030.
Digital solutions and entrepreneurs will be critical to unlocking many of these new opportunities. In Africa, entrepreneurs are bringing new solutions to social and environmental problems in remarkable ways. Affordable housing is one market hot spot that could create over 13 million jobs. In the case of food, Africa offers significant opportunities, reflecting the continent’s large share of cropland and currently low levels of productivity. Health and well-being opportunities are concentrated in developing countries, where access is currently low.
Investments in African tech start-ups have been increasing — up nearly 17% in 2016 over the previous year. In Rwanda, Nigeria, Egypt, South Africa and Kenya, digital technologies are breaking new ground, bringing life-changing products and services to underserved communities. South Africa’s Vula app, for example, connects rural health workers to specialist support and information, boosting the level of patient care. In Rwanda, where motorcycles account for 80% of traffic accidents, compared to 23% globally, the SafeMotos app allows customers to catch a moto ride with a driver equipped with technology that monitors speed, acceleration and GPS location, making for a safer journey.
The mother of this new wave of technology-based innovation is M-Pesa. In 2006, the year before Safaricom launched this service, more than 41% of adults in Kenya had no access to formal financial services. By 2015, that number was reduced to just 17%. Digital platforms can grow exponentially to shape new social and environmental value chains.
Partnerships between business, government and civil society will be critical to ensure small- and medium-sized enteprises (SMEs) and entrepreneurs have access to the capital and resources needed to unlock new market opportunities and deliver on the Global Goals. According to Brookings, African enterprises cite limited access to finance as the most important constraint to growth. As we detail in Better Business, blended financing will need to be put to expanded use, not just for funding massive infrastructure projects, but also to open access to much-needed capital for SMEs and entrepreneurs.
Digital industry groups and policymakers are collaborating to see how and where digital technologies can speed progress towards the Global Goals and to develop enabling policies. In many sectors, this collaboration is likely to be a powerful driver of rapid change. In the energy sector, the combination of technical innovation, much of it digital, and long-term enabling regulation is making clean power and energy efficiency a realistic off-grid alternative to fossil fuel power. In agriculture, digital solutions could drive up yields, cut food waste and transform water management. And a number of initiatives built on collaborations to facilitate and nurture creative business approaches are already incubating the next profitable social innovations. FabLab in Kigali is one example. Funded by the country’s ICT Chamber, the Rwanda Development Board, the Japan International Cooperation Agency (JICA), Rwanda’s Ministry of Education, SolidWorks Corporation, the Massachusetts Institute of Technology and Gasabo3D, a Rwandan engineering company, the project enables innovation by providing entrepreneurs access to tools for digital fabrication.
African companies increasingly are models for what can be achieved with ingenuity and innovation as they solve difficult social challenges. Indeed, they are leapfrogging solutions for some of the most pressing barriers to change in developing countries.