Tag Archives: Training

Emerging Markets on the Sell Side -Entrepreneurs, Exporters, and their Governments

Policymakers executives and entrepreneurs in emerging and frontier markets generally want to attract capital from abroad. They want long term, job creating capital invested in sustainable enterprises.

There are four areas in which management decisions and sound policy at the government level can increase the likelihood of such an outcome.

I. TRAINING & CAPACITY BUILDING

The best investors are attracted to strong management teams and staff with the skills to maximize productivity. Emerging market companies should focus their skill building efforts in three key areas:

  1. Quality management including, for example TQM and 6 Sigma practices
  2. Innovation to help orient the company toward growth and competitiveness.
  3. Compliance with international laws and regulations against corruption as well as customers’ regulations, in financial services and other sectors.

Training organizations:

Funders:

II. INVESTORS’ DUE DILIGENCE

Prior to any investment or contracting arrangement, companies will conduct the usual financial & operational due diligence to get an understanding of the nature of their investment. In doing so they should be mindful of several concerns:

  • Have suppliers and other 3rd parties had online compliance training?
  • Banks must comply with US financial regulations and so do their suppliers. Banks and other US companies must prepare suppliers to be audited by US bank examiners.
  • US & Western companies must maintain their “social license” to operate. This requires a deliberate demonstration of corporate social responsibility and should do all they can to purge human trafficking, child labor and other human rights issues from the supply chain.

III. DEMONSTRATE VALUE OF A LOCAL PARTNER

  • Provide guidance on local procedures protocol, cultural norms and customs
  • Commitment to excellence in performance and execution
  • Commitment to strong business ethics re corruption, human rights, CSR

IV. GOVERNMENTS MUST BALANCE INVESTOR FRIENDLINESS WITH NATIONAL AND CULTURAL PRIORITIES

  • Establish clear, well documented rules of the game
  • Active participation in multilateral bodies governing global trade
  • Maintain ongoing dialogue with major trading partners
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Raising Productivity& Prosperity in Six African Economies

There is a set of African countries whose economies have grown faster than the rest of the continent in recent years and show potential for above average growth into the future. Six of these countries have been dubbed African Lions by Haroon Bhorat and Finn Tarp in there recent book “Africa’s Lions: Growth Traps and Opportunities for Six African Economies.” The book was the subject of a panel discussion held recently at the Brookings Institution.

WHO ARE THE AFRICAN LIONS AND WHY?

The six African Lion economies are Ethiopia, Ghana, Kenya, Mozambique, Nigeria, and South Africa. The list includes Africa’s two largest economies—Nigeria and South Africa. These two along with Kenya and Ghana are also four of the five KINGS countries, so named by Ghanaian tech entrepreneur Eric Osiakwan for their leadership in Africa’s technology sector. Ethiopia, Africa’s second most populous nation has dipped a toe into light manufacturing. Mozambique is a potential agricultural powerhouse.

WHY HAVE THE LIONS NOT PERFORMED BETTER?

Poverty is down but not enough and poverty reduction has been uneven across the continent. Much of the poverty reduction has been due to strong commodity prices and natural resource imports by China. This type of economic growth does not reduce poverty by as much as in other emerging economies where more of the growth is driven by industrial activity and higher value exports.

In other words, as we all know African economies, including the African Lions suffer from excessive dependence on natural resources. They have been slow to industrialize, and slow to move up the value chain into higher productivity sectors which create more and higher paying jobs. While there may be inequities in the global trading system that work against them, the biggest obstacles blocking African productivity are more internal than external—they include business governance, quality of institutions, and strength of human capital.

HOW WILL THE LIONS TAKE AFRICA TO THE NEXT LEVEL ECONOMICALLY?

The issues of productivity and natural resource dependence are well known and have been hanging out there for decades. It was evident by the mood in the audience at Brookings that Africans are increasingly dissatisfied and are looking for new solutions!

Today’s challenges cry out for innovative new approaches and Africans must lead the way. The West—and the East can help. The challenge is big enough that the combined efforts of business, non-profits & foundations, academia & think tanks are needed. The West, and for the US in particular should beef up their efforts in 3 ways:

1. Engagement

American industry and American goods and services are generally well liked in Africa. But American business has been very much on the sidelines of African growth and development. Americans need to be present on the ground, even when there is not a deal immediately on the table. There have been a few good examples:

  • Mark Zuckerberg’s recent visit to Nigeria and Kenya. There to explore the technology and innovation sector in Africa, he wound up investing in a Nigerian software developer.
  • General Electric is making significant investments in the power sector in several countries, making use of the US government’s Power Africa initiative.
  • The Case Foundation, lead by Steve and Jean Case was a major supporter of this year’s Global Entrepreneurship Summit in Nairobi

There are resources that can help such as Corporate Council on Africa , certain accounting, legal and consulting firms, and a cadre of US trained professionals with deep experience and relationships in African business. Time to put them to work!

2. Training & Capacity Building

  • Management Training. In addition to making traditional business education available to more students, business and academia should make available advanced disciplines such as project management, quality management, and supply chain logistics as applied in an African context.
  • Innovation. Many western companies are using training programs that instill a culture of innovation. African business can use similar training to build on recent successes like M-Pesa and gain a competitive edge in the global marketplace.
  • Compliance. In order to become a productive member in a global supply chain, African companies like others around the world must be compliant with global standards designed to prevent corruption, maintain labor and environmental standards, and regulations specific to certain industries like financial services.

3. Financial Investment

With significant engagement and capacity building, comfort levels rise on all sides and perceptions of risk can change. Investments specifically linked to these efforts become attractive to private capital.

Deals designed to benefit from growth in consumption and from inclusion in global supply chains will provide significant, reliable returns to investors. So far there has been a lot of interest and a lot of dancing around. It’s time to pull the trigger!

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African IT expert Comments on African IT Challenges, Value of the Cloud and Virtualization

This post features the insights of Walter Kwami, an infotech expert and entrepreneur.  Walter has spent several years supplying computer hardware and accessories in the developing world. He currently owns an internet cafe in Accra, Ghana. Walter’s comments are part of an ongoing dialogue we’ve had on the state of computing in Africa. This is real food for thought for anyone interested in developing human capital, seeking investment opportunities and improving African economies’ access to global supply chains.

English: Diagram showing three main types of c...

English: Diagram showing three main types of cloud computing (public/external, hybrid, private/internal) (Photo credit: Wikipedia)

You hit the nail on the head – training is by far the weakest link in the chain. It is the single most important reason that previous efforts at computer education hasn’t lived up to expectation. Case in point – a primary school in our neighborhood would rather avail themselves to the resources at our cafe than use their own computer lab. When I asked why, the teacher told me the students were the ones that brought the school’s attention to the fact that their lab was practically useless compared to what they are able to do in our cafe. The requisite knowledge to train, maintain, upgrade and update the school’s computers was simply lacking. 
 
Cloud computing and virtualization is already upon us, the average African user is already heavily invested in the cloud in one way or the other. The main issue facing providers is bandwidth, but that is also changing. Take a look at this map: http://manypossibilities.net/african-undersea-cables/. Less than a decade ago the entire country of Ghana was sharing a 340Gb undersea cable with other West African countries. Today two new undersea cables with bandwidths of 1920Gb and 2500Gb have gone live (see map). Of course the challenge remains the last mile. Once that last mile access improves, bringing down the cost of bandwidth, cloud and virtualization will really take off in the enterprise and institutions. 
 
Imagine a company that currently depends on its internal IT to host servers, applications, support users, manage and update their systems, protect against intrusions, all in an environment where the infrastructure is unreliable – i.e. frequent power cuts, requiring further investment in expensive generators. In many instances their IT personnel have limited expertise and lack the requisite technical skills. With cloud and virtualization such an organization can host their applications such as email, Office 365 http://www.microsoft.com/en-us/office365/compare-plans.aspx), in the cloud and simply access them through their browser. Not to mention data backups to the cloud. Power cuts wouldn’t be as disruptive since they can use laptops, tablets, and mobile gadgets to access their applications and productivity tools. Such an organization could even employ a well qualified IT person in the US who would work with the local IT personnel to support the organization. 
 
I am currently doing something similar for a company in Ghana, and since the bandwidth is reasonably reliable, I’m pretty much always online with the guys in Ghana through my iPhone, Skype, Google+, etc. We share ideas, and train on new technologies as they become available  Often times some of them bring new technologies to my attention before I even know about it. The key here is access to, a) expertise/mentoring, which is made possible by b) reliable bandwidth. Recall the distance education product we discussed about 5 years ago? Slow bandwidth was the bane of distance education. Distance education will explode with improved bandwidth (this is already happening to some extent).
 
I once asked a class I was training how many people knew how to use computers. A few hands went up. But when I asked how many people have a Facebook account almost everyone raised their hands. How were they accessing Facebook?  You guessed it, every single person in the class had a handheld. Folks have Yahoo and Gmail accounts, store their photos taken with mobiles phones in the cloud, chat, email, text, watch YouTube, etc, all from their handhelds. Google recognized this major trend a few years ago, which is why they debuted Google Trader in Ghana and Uganda (they have since expanded to Nigeria). http://www.google.com.gh/local/trader
 
Basically, anyone with a mobile phone or computer (the vast majority of users are accessing the service on the mobile phones) can advertise and/or browse what’s for sale on Google Trader and transact business. The service has caught on quite well and will continue to grow in leaps and bounds. Bear in mind that accessing the cloud on a mobile phone is as simple as topping up your device – you buy credits, load it to your device and start browsing, whereas accessing the cloud through traditional computers is a lot more complicated. The ease and simplicity with which mobile devices enable access to the cloud is what drives adoption, as well as being largely immune to those frequent power cuts (most folks have multiple batteries for their mobile device). Services such as TxtNpay http://txtnpay.net/ even make it easy to load your device by purchasing and distributing phone credits through that very device. 
 
Without question cloud computing and virtualization will enable Ghanaian companies compete globally, maximizing their IT investments, while cutting costs. I believe their IT employees stand to gain more as they will be able to focus on improving their technology skills and supporting the organization as opposed to being distracted by infrastructure issues unrelated to their job. 
 
As to how best to solve the training issue, my bet is any initiative should consider access to reliable bandwidth as a critical component of the overall strategy. I believe there will be no shortage of volunteers from developed countries willing to share and collaborate with those in the developing world if they can easily do so in the cloud.
 

Best regards,

Walter
Panorama of central Accra

Panorama of central Accra (Photo credit: Wikipedia)

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