As high commodity prices fade, governments and non-government organisations are frenetically seeking to resurrect old ideas to boost Africa's growth. They will come up short, again. It takes commercial minded people to identify and animate the regional advantages that provoke sustained high growth.
Africa's income growth performance, viewed on a per capita basis with adjustments for commodity cycle distortions and income distribution lumpiness, has been low reflecting the lack of potent growth models. Agricultural and extractive based economies with low discretionary income cannot achieve sustained high growth through trading with each other. Asia's broad industrial prowess stemmed from selling to wealthy western markets. Africa will now have to tap distant markets through truly distinctive business models.
Competing traditionally cannot lead to Africa capturing valuable manufacturing markets sufficient to create jobs on an adequate scale. Western advantages stem from massive investments in knowledge and fixed assets. Asia is a hyper success-driven continent of four billion people who aren't distracted by fairness issues. They accept both unequal outcomes and unequal opportunities - as these are seen as outcomes of parent and grandparent sacrifices. Also, they start early. An Asian five year old is about five times as likely to wear glasses as children from other regions.
The global economy is expected to expand from $75 trillion today to over $300 trillion by mid century. This equates to adding 12 US economies. Consumption patterns will have to be starkly modified. Business people must manage the adjustments which should include integrating massive numbers of people into the global economy from Africa's isolated subsistence farming communities which have long been economically stagnant. This will require new ways of satisfying customers and rewarding initiative and investors.
Moralising aside, consumerism is more addictive than fulfilling. Happiness spikes when incomes rise to escape food stress and then the trajectory drifts lower until it flattens out. Suicide is more common among the wealthy than domestic workers. Finding meaning in life is mostly about beliefs, aspirations and relationships. Materialism was used to encourage people to take jobs which were risky, unpleasant or both. Great economic successes then provoked cultures where young people, particularly in the West, were taught that ‘the sky is the limit'. As earth's limitations come into focus, it turns out that this phrase has multiple meanings.
Distributing video streaming cellphones in isolated rural communities is a once-in-a-world event. How communities which have been shielded from the religion of consumerism react to strange sights and sounds invokes a soulful reflection. Meanwhile, Jeff Bezos, Amazon's founder, has undermined shopping's appeal for multitudes of affluent consumers. Vacant malls now serve as hollow monuments to that addiction slipping into remission.
Deep fundamental shifts open the door for Africa's entrepreneurs to demonstrate how buying mass produced goods often feeds upon ill-considered consumption habits. Men traditionally bought women pricey gifts to signal their worthiness as providers. In many universities today, more women are graduating than men. Powerful shoulders provided advantages on farms and in factories but not in offices. As women assess men more on character and less on capital, should expensive, mass-produced gifts lose-out to more thoughtful giving? Without traditional store-based shopping, personalisation becomes feasible for many purchases.
Asian conditioning that emphasises rote learning from early childhood impedes the forms of untrampled thinking that Africa can inspire. Why should people buy loved-ones gifts that other people have? Why shouldn't people have a signature pattern, a modern day coat-of-arms, as exclusive to them as their cell phone number? Why shouldn't individuals in the East and West have a life-long relationship with a community, family or person in an otherwise isolated African community who designs clothes, decorations and personal items exclusive to the individual customer with his or her signature pattern displayed subtly or prominently?
Can something like that catch on? Are such ideas silly or a path toward more balance and greater meaning? The observations in this brief article are combined to spotlight: Only business people have the tools to assess commercial viability and to continually adjust business models to bring disruptive ideas to life.
Connectivity and individuality sell - particularly when packaged together. Conversely, today's consumerism crowds-out a broader sense of a connected being. South Korea brought us "gangnam" music videos, an anthem to consumerism. Meanwhile, blacks and Brits have dominated the evolution of stirring music styles for how many generations?
Africa's future is tied to the aspirations of its young - and young at heart - as expressed through creativity. Such assets can outshine peak-production gold mines. They won't, however, be developed by governments or NGOs. Business minded people from the East, West and Africa should embrace such possibilities together - as Africans can compete, and win, in ways that others can't.
Shawn Hagedorn is an independent strategy adviser.
This article first appeared on www.biznews.com
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