Powering up Africa through innovation
January 16, 2018 Editor 0
Recent World Bank investment climate surveys find that the top two constraints for small and medium enterprises (SMEs) in Africa are access to finance and access to energy. Given that SMEs contribute disproportionately to boosting job creation, GDP, and exports, addressing these two constraints is critical to promoting economic development on the continent.
A new project combining skills across the World Bank Group and IFC is taking advantage of disruptive advances in the energy and finance sectors to address these longstanding challenges for SMEs.
Current access to electricity remains woefully low and is a major impediment to economic growth. More than half of Africa’s population isn’t connected to the energy grid and has no access to reliable power. At the same time, fewer than 50% of adults have an account with a formal financial institution.
In recent years, however, two important developments have made it possible to begin addressing these challenges:
- Off-grid energy solutions—notably solar power—have fallen dramatically in price with new business models working to scale them
- New digital-based financing mechanisms, such as crowdfunding, cryptocurrencies, peer-to-peer lending, psychometric testing, big data, and blockchain have emerged as tools for under-served finance markets.
There are strong parallels in these advances for both sectors. Whereas both energy and finance are traditionally provided by large-scale, centralized service providers—state-owned electricity utilities and large commercial banks, respectively—new solutions have effectively decentralized and democratized the provision of these services. Now a range of smaller, innovative companies can provide these services and consumers can go “off-the-grid” for both their energy and financial needs.
- Don’t Neglect Your Power to Bring People Together
- Patent-based investment funds as innovation intermediaries for SMEs: In-depth analysis of reciprocal interactions, motives and fallacies
- Is more IT always better for business?
- Open Innovation and the Theory of the (Innovative) Firm
- Nokia Lumia 820 4G LTE Smartphone Review
- 3 Reasons Why We Need Business Analysts in ICT4D
Subscribe to our stories
- The Strategic Role of Design in Driving Digital Innovation June 10, 2021
- Correction to: Hybrid mosquitoes? Evidence from rural Tanzania on how local communities conceptualize and respond to modified mosquitoes as a tool for malaria control June 10, 2021
- BRIEF FOCUS: Optimal spacing for groundnuts in smallholder farming systems June 9, 2021
- COVID-19 pandemic: impacts on the achievements of Sustainable Development Goals in Africa June 9, 2021
- Explicit knowledge networks and their relationship with productivity in SMEs May 30, 2021