There are a number of interesting business segments that offer the South African entrepreneur / intrapreneur / innovator lots of exciting growth opportunities if we are to cast our minds forward into the future.
We are all too well-aware that the South African economy is struggling. I have written about this over and over again here and on other platforms and forums, but the time for bellyaching is over - what's needed is action.
Talk time has long passed; what is needed instead is a pragmatic focus on progress.
An over reliance on selling commodities; a lack of meaningful, local job creation; an economy that is largely inwardly-focused and a poor record of innovation and high value-adding have all contributed to stagnant South African growth and lacklustre future prospects.
So where then are the future growth opportunities for South African businesses?
Well there is significant opportunity in designing businesses from scratch that firstly adhere to a few important conditions:
- Build a brand not just a business - brands are unique pockets of value that cannot simply be replicated by somebody else. If you're going to start a business, you might as well turn it into a brand while you're at it.
- Make sure that you are focused on a global marketplace, not just a local one - South Africa has a viable consumer marketplace of around 10 million individuals. China has 1400 million individuals. Exporting brands from South Africa to bigger international markets is a total no-brainer - I wouldn't even bother with a local market if making money is in any way your intention.
- Create an entity that is future-focused - make sure that whatever business you are building has plenty of runway into the future. Do some educated forecasting as to what the opportunity really is - if in doubt, consult with a trained futurist that has experience in launching entrepreneurial ventures (not one that just talks about the opportunities).
So where are the specific areas that offer the most amount of traction if you are looking to focus your innovation efforts in 2020?
- Green Economy - encompassing the three pillars of 'Social | Economic | Environmentally sustainable systems and models; the urgency to solve our global climate crisis is intensifying. If we do not rapidly transition every aspect of our economies and economic value chains to be more 'green' there will be no planet for anyone left. All businesses will therefore need to be redesigned and reengineered; the opportunities in this space then are exponential. If you think technology created a lot of room for disruptive innovation, the demand of sustainable options is going to kill the other industries that are just too big to change. This category is not a nice-to-have, it's mandatory. Innovating and supplying alternative consumer packaging, systems, audits, consulting etc is an area that you can be assured that demand will be strong into the future.
- Circular Economy - the circular economy is a framework for an economy that is restorative and regenerative by design. Most current industrial value chains are designed according to old take-make-waste extractive industrial model; a circular economy aims to redefine growth, focusing on positive society-wide benefits. In this model the definition of a stakeholder is expanded to include more than just the financial shareholders. There is a desperate need for just about every business to once again be redesigned in a circular construct. Countries like Taiwan have unlocked huge economic potential through a focus on circular economy models - it feels like a great opportunity for South Africa too if we can get our minds around it. South Africa could become a circular economy model for the whole of Africa if we can just seise the moment and dare to design in a circular way from the beginning.
- Bio-medical / Bio-cosmetic products- South Africa is home to the richest floral diversity on the planet. Many of these plants have medicinal properties, but for some reason we have never seen the glaring opportunity to market these properties in medical and cosmetic products. Again - most products coming out of South Africa are packaged in plastic, have zero innovation when it comes to business model design or even how these products engage with their market. Lots of lots of space for clever design in this category.
- High-value agriculture and value-added processing - recently I published a rather lengthy piece about the lucrative opportunity that is available for high-value agricultural exports and value-added processing. Rather than rewriting the whole thing here - just go have a read over there.
- Direct To Consumer business models - around the world, DTC business models are opening up exciting opportunities for small entrepreneurs who are choosing to limit the range of products that they offer and do so by going straight to the customer rather than relying on the whims and fancies of retailers. Luckily of small entrepreneurs - the technology tools are now available, at prices that are cheap enough, to build a brand and make a direct connection with a target market without the need for increasingly unnecessary middlemen.
- Cultural Innovation - cultural innovation refers to newness manifested and recognised in cultural goods and services offered by formal organisations. in other words - this is the innovative publishing, production, distribution, marketing of cultural products that are created mainly by independent contractors or agents, but then scaled and leveraged by larger organisations. South Africa has a rich cultural heritage and vibrant cultural reality, but these products are simply not very well-packaged and marketed to bigger markets. There is a lot that can be done in this space which not only showcases South Africa as a cultural destination, but opens up economic opportunities for thousands of South Africans. The management and leadership tiers of publishing companies in South Africa are populated by old thinking, boring and unimaginative dinosaurs who are just begging to be found guilty of laziness and sentenced to bankruptcy courtesy of disruptive innovation. Please do them a favour and put them out of their misery.
- Design Economy - South Africa is home to a wide swath of designers who over the decades have proven themselves to be very proficient in the imagining and creation of products and artefacts that are seen as desirable and commercially-viable around the world. More than ever it is good design that can make a huge difference in the way in which the world operates and critical problems are solved. Designers in South Africa are largely unsupported by government and many talented individuals end up leaving the country to take up work in bigger economies elsewhere. Our design talent is however of a world-class standard and the demand for good human-centred as well as technical design from foreign markets is vibrant. What's needed once again is creative marketing, brand-building and a focus on the export market.
If I'm honest - there are so many opportunities in this space, this post could go on and on and end up as a book. But that would bore the shit out of me and you - so I may just record a podcast on the topic and upload that later on.
What's clear is that almost every industry in South Africa needs a radical redesign. So many of our brands have been run the same way since the 80s - and probably by the same people. We hear about all the nonsense at SAA and Eskom because they are public utilities and the press are keen to tell you a story of disaster to sell newspapers, but I can assure you that the same level of mismanagement and ineffective and incompetent leadership is happening at most private companies too.
There has never been a better time for the optimistic, creative, entrepreneurially-minded brand-builder.