“Africa has all of the right ingredients to see its digital economy grow, said Alibaba Group Vice President Brian Wong at the World Economic Forum in Cape Town, South Africa on Thursday.
Wong added that the continent has the same opportunity China had when it began its rapid expansion 20 years ago, according to him, what others see as limitations such as a lack of retail infrastructure, low internet penetration and per capita income are its advantages.
“The opportunity that China had is what Africa has today. That lack of traditional economic infrastructure, like retail and banking systems, means that Africa can leapfrog,” he said during his panel on “The Retail Revolution” in Africa.
For example, in 1999, when Alibaba launched, China had a rudimentary retail infrastructure with a large population but only 8.8 million internet users and a per-capita income of $800. The continent now has over 850 million internet users and a per-capital income of $9,000 and total e-commerce turnover of $1 trillion.
“Most people would believe this is impossible unless you have a very developed infrastructure. The reality is that not having a developed, say, retail infrastructure, banking infrastructure, logistics infrastructure, provided an opportunity in China for people to leapfrog the traditional sector and go straight into digital. And that’s why the growth has been so immense,” Wong said.
Alibaba is part of a group of multinational corporations working with organizations such as the United Nations Conference on Trade and Development to help transform Africa.
Jack Ma, Alibaba Group Executive Chairman, through his $10 million Africa Netpreneur Prize Initiative is looking to identify 100 African entrepreneurs building companies that will lead Africa to the next stage of development.
Alibaba is also part of founding members of the new Africa Growth Platform, which is focused on building Africa’s digital economy. Other partners include A. T. Kearney, Dalberg Group, Export Trading Group, the U.S. African Development Foundation and Zenith Bank.
Alibaba, through its Alibaba Business School, launched the “Global E-commerce Talent – Train the Trainers” program to help teachers deepen their understanding of the e-commerce industry. Rwandan startups and Rwandan government officials are also being trained on economic growth in the digital era.
Alibaba and UNCTAD also launched the eFounders Fellowship to train 1,000 entrepreneurs on the digital economy. Two hundred of those fellows will come from Africa. Noting that no country is the same, Wong added that the common success factor is an entrepreneurial mindset that enables resilience, flexibility and innovation. The good news is that these traits can be nurtured through training, supportive policies, education and community building.
According to WEF, the two-thirds of Africa’s 420 million young people that are unemployed highlights a need for new solutions to drive employment growth. Also, while Africa’s young people are 13% more active in early-stage entrepreneurial ventures than the global average, the region’s startups are 14% more likely to fail than those elsewhere in the world because of insufficient support and infrastructure.
The ventures also fail because governments need to create policies and regulations that encourage innovation and investment in the digital economy. They also need to allow entrepreneurs be free to build and operate the platforms that will make digital tools cost-effective and accessible for small businesses to adopt. Educational institutions should train youth in the skills that are necessary to succeed in the new economy.