Africa is a continent full of hope but struggles to turn potentials into reality. A region satisfied by little and led by despondent leaders. Nations of great orators but few actors, apparently good in formulating policies but weak in acting on them. A continent full of youth should not be lacking in activity on the global economic and tech scene. Every great continent has had failures n stories of victory, lots of them. But how can Africa, a continent of faith struggle in action.
America has faced the global meltdown, the great depression, American civil war, subprime mortgage crisis, world wars even tech companies went through the dot com bubble. Africa has often declared her intention to win through great speeches but has failed to win by forfeiting her battles.
The answer to Africa’s struggles is venture capital plus tech startups. A high growth space on the global economic scene. Venture capital is the most efficient engine to drive Africa into her ambitious destination. Boasting of an incredible track record of fueling high growth ventures that generate huge revenues, pay high taxes, train extremely skilled engineers, fuel fantastic innovation, attract savvy investors who are willing to spend and also contributing high figures to GDP boosting Africa’s ability to leverage her economies.
Venture capital is basically providing financial resources not only money to fuel innovation and grow it into stable industries. There can be no failure on the tech scene because any idea or innovation on the tech scene lingers on and evolves into a useful product even though the company may die. The metamorphoses of these ideas enhances the general tech ecosystem. But the engine of tech start-ups is financial ingenuity. Many startups will die but their death will fuel the rise of giants in technology from Africa on the global stage. Africa needs to adopt the vision of providing capital to fuel innovation in the tech space. A vision, because a future you don’t see you cannot arrive at. Africa must learn that no one will develop unique technologies that give them unique advantages over you and cede the tech edge they have over you in the name of aid or trade.
Venture capital is a web of safety, allowing visionaries to explore n tweak their visions while not being too cautious. This wisdom drives high end innovation much needed to tech industries. Innovation is the capital of technology, venture capital is its muscle. Venture capital also helps monetize tech by merging innovative brains with financial powerhouses who are skillful in working with money, generating money and managing money.
10 Reasons Why Venture Capital Will Do Well in Africa
1. Africa has a largely youthful population who have basic education, are literate n have an interest in internet driven technology.
2. Growth in the global economy will slow down in the future drastically because the developed economies will end-up with a crowded industrial territory with low opportunities for growth it will take Africa and parts of Asia and Latin America to sustain the global economy and distribute risk to regions like Africa. To simply put Africa has to grow for the world to grow so the world will force Africa to grow.
3. The persistent desire for tech companies to cut cost and improve profit margins. This is a model in the global industry. Big firms will always shift production or parts of it to regions of cheap labor and less sophisticated labor laws. This enables them to cause the workers’ to work for longer hours for lower margins.
4. Tech companies will build major industries close to regions of natural resources in the future to spread risk across the globe and control supply to prevent disruptions in manufacturing processes.
5. Overtime the legal framework in the west and China will mature and the tech space will be overregulated in advanced civilizations this will cause tech firms to move to Africa.
6. A struggle for global leadership will cause industrialized countries to become increasing nationalistic and authoritarian. This will cause much coveted tech advancements to be ceased and used for military purposes.Tech companies will then have to move to Africa to exercise control of their technologies.
7. Venture capital will prevail in Africa because the change Africa needs will come mostly from her citizens not leadership. It is common people of Africa that will change Africa for good not its leadership even though its leadership will provide guidance to do so.
8. Investment banking is under developed in Africa, so venture capital in its traditional sense will not thrive in Africa but newly evolved models of it will.
9. The growth of many industrialized economies have been sustained by debt, in bid to continue to develop the debt ought to be restructured. New and savvy financial instruments will be created to sell and restructure the debt. The debt will then be passed on to high net worth companies financed in part by venture capital this will check systemic risks in the global economy. And create the putting up of prudent financial policies to fuel growth in Africa.
10. Ripple effects from ongoing heavy investments in technology in advanced countries will spur Africa on to grow her tech startup base. Because smart phones will become cheaper and more advanced. This will increase computer and internet penetration in less developed countries which will cause the cost of starting internet based companies to be cheaper.
An article by TSA Simon.