U.S. Tech Giants Flock to Africa to Compete for Digital’s “Final Frontier”

Thursday, June 2, 2016

Companies like Alphabet and Microsoft are pursuing the continent’s mobile-first customers.

Not so long ago, Big Business saw Africa as a charity case. Much of the investment by multinational corporations across the continent was geared more toward burnishing corporate sustainability programs—building schools, planting trees, offering occasional internships—than gearing up for future growth.

Today the picture has changed radically. In the past few years, U.S. technology companies have begun to invest heavily in Africa.

Why? They suddenly grasp the huge potential for customer acquisition. Africa has a combined population of over 1 billion people spread out over its more than 50 countries. And it boasts seven of the world’s 11 fastest-growing economies, with Ethiopia, the Democratic Republic of Congo, and Ivory Coast leading the charge. It’s also very much a mobile-first audience, as 99% of internet subscriptions on the continent are via handheld devices.

 What’s more, as big tech companies grapple with market saturation in other markets, Africa is increasingly being seen as a “final frontier” for new customers. Alert to this, the likes of Alphabet Google -0.21% , Facebook -0.03% , IBM -0.80% , and Microsoft -0.28% have been stepping up their business operations.

None more so than Microsoft. The company was one of the first U.S.-based tech giants to spot the continent’s potential when it launched its 4Afrika initiative three years ago. With a $75 million budget, the program was created to train tens of thousands of potential employees and place tens of millions of smart tech devices in the hands of African youth.

Source: Fortune (link opens in a new window)

Investing, Technology
Base of the Pyramid