Viewpoint: The Entrepreneurial Mind at the Bottom of Africa’s Pyramid

Monday, November 17, 2014

By Anna B. Wroblewska

The bottom of the pyramid framework initially imagined an enormous market opportunity for multinational corporations to tap into high-volume, low-margin markets around the world. But it might just be local, small-scale entrepreneurs who make the most profound impact.

Africa is a young continent with a large so-called “bottom of the pyramid” population. There has been growing interest in the continent from investors and multinationals alike, with many South African firms in particular aggressively expanding into new markets and heightened mergers and acquisitions interest from abroad.

But while the growth of consumer spending is enticing, it would be a mistake to think of Africa solely as a consumer market, from both a developmental and business perspective.

Researchers Hsain Ilahiane and John Sherry of Iowa State University and Intel Corporation, respectively, point out the limitations of the idea , telling AFKInsider that “[Consumerism] assumes that customers are just passive receptacles for goods and services, may be beyond the simplest level of decision-making in the marketplace.”

“People are co-producers, and the idea of consumerism does not imagine a space for people to be producers. It’s the difference between ‘dumping’ development solutions on local populations and engaging the local community to invent, develop, and test their own hypotheses about what might work.”

And with a youthful and growing population, there is ample opportunity for such activity — especially in a region with a lack of formal employment routes for many.

“We would be happy for students to get formal jobs, but it’s just not a realistic thing to plan for,” says Loren Crary, director of external relations at Educate!, a non-profit which provides a targeted program of business-related hard and soft skills to encourage entrepreneurship among secondary school students in Uganda.

Africa is a remarkably young continent, and with a relatively high birth rate it’s likely to remain that way for the coming decades. A UNICEF study estimates that by 2050, there will be nearly 1 billion children, representing 40 percent of the world’s youth. As more of today’s youth enter the workforce, the level of potential productivity and economic activity could be staggering.

Source: AFK Insider (link opens in a new window)

Base of the Pyramid