It’s exciting to see how AI is opening up new possibilities for African entrepreneurs. Over the past few years, we’ve witnessed a surge in innovation, with startups leveraging cutting-edge tools and resources to turn their ideas into reality.
This truly is a new era of opportunity for resourceful young business people in the continent who are poised to make a significant impact in their respective industries.
Few technologies have democratised the business innovation landscape quite like AI.
As it stands, a recent Microsoft survey revealed that almost 50 percent of small enterprises believe AI could be a game-changer for their business.
A thriving generation of entrepreneurs is good news for us all. Entrepreneurship drives innovation, creates jobs and increases productivity, all of which contribute to economic development.
This is evidenced by the fact that countries with high levels of entrepreneurship tend to experience higher rates of economic growth.
From financial services to e-commerce and agriculture, the very way in which industries operate in Africa has been transformed by local entrepreneurs like OPay and Jumia. Entrepreneurial development is the cornerstone of future progress.
Kenyan startup Taimba, for example, reduces food wastage and streamlines the farm-to-market process by linking farmers directly to retailers.
Understanding that rural farmers often lack access to sufficient storage methods, the agritech company sources perishable produce from rural farmers at farmer-friendly rates and supplies it direct to retailers at below-market prices, allowing them to sell to consumers more affordably.
Similarly, other startups such as PCS AGRI in Morocco are enhancing productivity and decision-making for agricultural businesses.
It provides practical tools for farmers and agro-industrialists by leveraging advanced technologies like AI, machine learning, and the Internet of Things. Its services include connected traps and a platform for estimating cherry tomato yields, which optimises operational management on farms and in packaging stations, while also improving communication with end customers.
But, just as the scope for new business opportunity is greater than before, so is the complexity of challenges facing young innovators.
Securing investment has always been a significant hurdle, but more so now since African startups have found themselves in the middle of a funding freeze.
According to the African Private Equity and Venture Capital Association, venture capital investments in Africa dropped over 65 percent in the first half of 2024 compared to the first six months of 2023.
Robust ecosystems naturally provide avenues for skill transfer, mentorship, and networking, aiding new businesses in gaining crucial insights and building connections.
Already, by 2022, there was widespread consensus among entrepreneurs that running a new business was more difficult than the year before – this was particularly the case with startups in low-income countries.
It’s becoming increasingly clear that building new ventures will require greater resilience and adaptability to excel in today’s challenging environment.
One way in which some resourceful enterprises are doubling down is through successful ecosystem partnerships that can provide them with the support they need.
These systems not only increase access to financing through availability of venture capital and government loans but can also help foster collaboration and innovation. For example, well-established businesses could come alongside startups to help them identify emerging gaps in market demand that they can fill.
And these interactions can be facilitated through marketplace platforms that promote information sharing.
Large companies also have an important part to play in the ecosystem, creating opportunities for smaller enterprises to partner with them on large projects to refine their offerings. This includes creating platforms for e-commerce, improving logistics, and reducing trade barriers.
The writer is the General Manager, Microsoft Africa Transformation Office
