Ni Hao! What Africa Can Learn from Smart Chinese Kids

So my latest adventures have brought me to China: the weird and wonderful home of the rising sun, the Tiger Mom, the Tiger Wife (hello Wendi Deng!) and Confucius. Highlights? Well, I’ve hardly had time to play but I did take an opportunity to marvel at the scale and ingenuity of the Great Wall, be awed by the grandeur of the Imperial Gardens and of course, stuff my face with Beijing’s finest food.



Like Ethiopia, eating in China is an exciting experience bar one recent incident where I indulged in one too many bowls of delicious mutton stew. After proudly patting myself on the back for my fine culinary tastes, I was casually informed that the meal I just had was in fact turtle soup. Operative word: TURTLE. Yes, of the amphibious reptile variety. Trauma! Zanele makes safe food plans: the universe chuckles.



Turtlegate aside, I have had some remarkable experiences out here. The most enriching being my chat in a beauty salon (yes, I know, très cliché) with a 16 year old girl named Echo. In exchange for letting her play with my hair (‘it’s very buuutiful Miss!’), Echo allowed me to pick her brain about life for a teenage girl in China. She’s smart, she’s fired up, she’s ‘Asia Rising’. My former Dean, Kishore Mahbubani is onto something here...



This got me thinking about the value of education in emerging economies. It’s a no-brainer, Chinese kids are super smart. Question is why? How? It's an emerging economy with developmental constraints after all. What can Africans learn from them? Well, with its demanding parents, boundlessly ambitious students, and test-obsessed culture, China's schooling is bound to be the most rigorous in the world.



That said, let's not forget that while China has no problem producing mid-level accountants, computer programmers and technocrats, it has a dire lack of entrepreneurs and innovators needed to run a 21st century global economy. It's ironic that just as the world is appreciating the strengths of China's education system, the Chinese are waking up to its weaknesses. These are two sides of the same coin: Chinese schools are very good at preparing their students for standardized tests. For that reason, they fail to prepare them for the ‘outside world’ and the knowledge economy. McKinsey apparently agrees with me:

http://www.mckinseyquarterly.com/Public_Sector/Education/Chinas_looming_talent_shortage_1685

Nevertheless, there’s no denying that China’s education is miles ahead of other developing nations. It’s hardly comparable with statistics from my own country’s education system which is frankly quite shocking. For example, despite 5.4% of GDP being allocated to education, almost half of South African students repeat a year during Grades 10-12. The picture is no better on the rest of the continent: dropout rates are high, teacher training inputs low, bureaucracy is crippling and accountability is non-existent.



How can this pattern be reversed? Sadly, I think the answer is simply: it can’t. Certainly not through small-scale, reactive but well-intentioned reforms. Africa has a schooling crisis. Period. A tragic systemic failing that only political intervention asserting government authority over schools can really make a difference.



Now don’t get me wrong: African education systems have started producing excellent scholars and professionals. Equally, our societies have long produced successful entrepreneurs and business-oriented people who against all odds (including minimal or total lack of formal education) have made smashing successes of their lives. Therefore formal education based on rigorous, soul-sapping testing is not the answer for the continent. What is? Perhaps more business focused education models that incentivise high performance and productivity in schools? Idealistic? Maybe. Costly? For sure. But I still vote yes.

Africa's Turn: Green Revolution, here we come!

She runs a farm, raises and home schools her kids, cooks, is an avid photographer but best of all, she blogs about her experiences to 23 million followers. Her name is the Pioneer Woman and ladies and gentlemen, I want to be her when I grow up!



Why Zanele, you ask? Well, apart from the 23 million strong following, revenue of a million US dollars, a creative site, a cook book and a movie deal, this woman makes a living from being on a farm.Yes, A FARM! Nevertheless, her story is the making of a Harvard Business School case study for at heart it is a story of a successful business woman.

Her story resonates with me simply because I too want to own my own farm one day. Don’t get me wrong, this is not so that I can pursue a charming Pollyanna type lifestyle in the countryside. No sir. I’m a city girl with a deep love for creature comforts that only a metropolis can offer. That said, I genuinely believe that Africa needs an agricultural revolution. I want to be part of a movement that develops commercially viable, socially responsible value chains of high nutrition food for local and regional marketplaces.



Many African countries have seen farmers been forced to migrate to cities as a result of it becoming increasingly difficult to survive on farms. The picture on the ground is grim: farmers are often trapped into inefficient technologies, poor cereal yields and shrinking farm sizes. What’s worse is many of these farmers do not find work in the cities thus perpetuating the poverty cycle and Africa’s dependence on concessionary food imports.



So what’s the solution? Well, whilst I’m no specialist on this topic and I certainly welcome debate, I believe the solution is fairly simple. Simple because it’s a solution that has been tried and tested in other regions of the world. Many Asian economies in the 60s wanted to industrialize quickly but also faced severe food shortages and slow agricultural growth. What was done? Well, the governments simply made use of their large agricultural workforce and viewed agricultural growth as a key step along the path to industrialization.



I was shocked to learn during my trip to Vietnam in 2010 that an overwhelming 70% of the country’s economy is still based on agriculture. Two thirds! What they do right: they support farm credit systems, they subsidise inputs, they intervene in markets to stabilise prices. Most importantly, they ensure that their interventions help both small and large farms.



Action plan for African governments? In a nutshell: improve technologies, increase public investment in agri-research, support food grain markets and improve market access for small scale farmers.

Oh, and get more city snobs like you and me into the countryside. Get us blogging, exchanging innovative ideas and investing skills and time in agricultural development. Let’s all be the Pioneer People! Idealistic? Of course, but aren’t all revolutionary ideas?

A Little Taste of Addis Ababa

I adore Ethiopia. Adore it!



Now you may think that I’m ill-qualified to make such an emphatic statement, considering I have not spent long in the country. But as Malcolm Gladwell (of Blink fame) would attest, there is more to first impressions than superficialities—gut reactions more often than not accurately convey the same impressions about substance and character that individuals hold about people, places, and things over the long-term. Plain English – the place rocks, my gut told me soon as I landed!




Highlights? The delightfully friendly people, the country’s rich cultural history and diversity (did you know that Ethiopia was the only country not colonised by a major power in the scramble for Africa?) and of course, the food. My word, the FOOD! A mixture of African, European and Arabic influences makes eating local food an experience of note. Even the air is a potpourri of spicy stews (wots), incense, coffee, sweets and well, smog (Addis is a large city, after all).




Lowlights? Naturally in any emerging economy, the difference between rich and poor is a thorny issue and Ethiopia is unfortunately no different. The juxtaposition of wealthy government officials and homeless individuals in Addis is apparent. What I found particularly disturbing was the visible lack of housing available for Addis' population. Staggering statistic: 70% of people in Addis either do not have a home or are living in sub-standard housing. In other words, every two in three individuals you meet in the city barely have a home to go to.




This got me thinking about a solution to housing the world’s poor using simple business principles. Surely there’s a business model that allows for housing to be developed on a large scale at a low cost to the end user that is financially sustainable? Never, I hear you say? Well, it turns out there’s a world out there of people who are asking exactly the same questions. Check this link out:

www.300house.com


Enter Vijay Govindarajan and his AMAZING blog 300house.com. Basic concept: an abode that is more than a shack that is made up of materials that can withstand hostile conditions. Basic idea: if Tata can produce a car for $2000 and GE can sell an electrocardiogram for $400 and Phillips can produce a cheap and environmentally sound cooking stove, then why can’t durable houses for the poor be produced and sold at an affordable rate? Will it work? Who knows. Land rights for one remain a problem but it's certainly worth a try.

Anyway, getting back to the point of this post: Addis is a GREAT city. Go visit!

Social Entrepreneurs: The Real Changemakers

The past two decades have seen an explosion of healthy competition in the social sector. It appears that there has been a discovery of what the business sector learned from the railroads, the stock markets and the digital revolution: nothing is as powerful as a big new idea if it is in the hands of a first class entrepreneur.

Question is: social entrepreneur or business entrepreneur? Is it important to consider how useful social entrepreneurial models are, particularly in developing countries, where every sort of entrepreneurial venture - power generation, grocery stores, water sewage, housing construction and banking arguably fills a hole in the economy or infrastructure and is at least subconsciously acting as a social enterprise?

We do not consider PECO or British gas, both utilities, as socially entrepreneurial, but if their relatively cost efficient, reliable service delivery model is transported to Accra, Ghana or Pnomn Pehn, Cambodia would this be applauded as the work of social entrepreneurship? After all, what works and what does not for business is often the same regardless of the bottom line, right?

Nevertheless, in a general context, a social entrepreneur specifically identifies and solves social problems on a large scale.

The biggest challenges I would argue for social entrepreneurship are threefold:

1)Operating in an enabling environment.

2) Adopting effective and tailor-made measurements of social impact.

3) Unrealistic time frames.

The dominant driving factor in change-effecting social entrepreneurship will be the integration of innovation systems into social start-ups. It appears that there is one basic method of innovation (as varied as its outputs appear) and the fact that social entrepreneurs have decided not to charge the end-user high prices is not going to change the required method at all.

Social entrepreneurs will have to adopt the most productive methods of the best of the for-profit innovation model. This is because in order for their important ideas to be developed and scaled up, investors need to be assured that effective operational models are already at work.

As a young girl growing up in Soweto, Johannesburg in the 80s, I was reminded consistently of the perils of failing to help the local community in addressing its unmet social needs. We subscribed to the philosophy of “Ubuntu” – the idea that my humanity is inextricably linked to yours, that I am because we are. As such, the socially entrepreneurial spirit though limited by a difficult political environment was alive. Change in its small way was effected.

The same potential to make a change continues to exist today across the world. However, the reality is that the perception of social entrepreneurship as philanthropic in nature will have to change.

Development Beyond Aid: The Next Step?

The interview above with Fareed Zakaria remains one of my favourite from 2009 because it is spot on in addressing the crux of the issue vis-à-vis economic development on the African continent.

One the one hand, there is a growing chorus of voices (refreshingly, many of them from aid-recipient countries) proclaiming the massive failure of international aid to address poverty – especially in Sub-Saharan Africa. Dambisa Moyo (‘Dead Aid’), Hernando DeSoto (‘The Mystery of Capital’) and William Easterly put forward compelling arguments for the scrapping or complete reformation of our current approach to international aid. Despite spending over a trillion dollars on aid to Africa over the past 60 years, we have seen little real growth, and in many cases even contraction and growing poverty.

Aid has too often undermined local businesses by flooding markets with free or subsidized products and created a dysfunctional handout culture, where recipients’ ingenuity and creative energies are diverted elsewhere, rather than creating goods or services of real local value. Whether you believe in reform or wholesale abolition of international aid (Dambisa’s TED talks are fascinating in this regard), there is no question that the current system is broken.

On the other hand unfettered markets have tremendous power to create wealth and are doing so for many formerly impoverished populations. Markets, by definition, treat poor people as customers – listening and responding to their needs and priorities, rather than parachuting in ill-suited ‘solutions’ to grateful ‘beneficiaries’. That said, market also often bypass or ignore particularly vulnerable and poor populations. The truth is that many of the populations – economically disadvantaged, rural families who depend on small parcels of marginal land for their livelihood – live with the reality of market failure. I for one have witnessed how incredibly resourceful, hard-working and savvy farmers in Southern Africa are. However, their communities are a high-risk proposition for most would-be investors and service-providers.

For one, they are poorly served by local communications and transportation infrastructure, they are subject to a variety of nuisance and exploitative policies and engaged in scattered production of low-volume, low-margin products far from major markets. This is by no means “low-hanging fruit” for businesses looking to fill a niche.

This is where I believe the idea of spurring would-be capitalists through social venture capital fits perfectly. According to Business Week at least $7.3 billion has been invested in 100 socially responsible alternative asset funds of which $5 billion is venture capital. It is clear that an increasing number of venture investors are hunting for small enterprises that can yield social benefits as well as high profits.

However, in developing countries in Africa and Asia where populations are notoriously risk-averse and focused on short-term returns, , it is clear that “patient capital” is the best way forward. This essentially entails making investments that are risk-tolerant and long-term. Investments of this type have tremendous potential in that they have all the discipline of venture capital — demanding a return, and therefore rigor in how they are deployed — but they expect a return that is more in the 5 to 10 percent range, rather than the 35 percent that venture capitalists look for, and with a longer payback period.

Patient capitalism can fill the gap between the social aims (but often limited effectiveness) of philanthropy and the power (but often limited social motivation) of the market. In East and Southern Africa, there are good examples of breakthroughs being made in housing, healthcare and agriculture as a result of sound investments by social private equity and venture capital funds. These success stories need to be need to highlighted, celebrated and emulated.


Will patient capital solve everything? No. Firstly, the environment needs to be conducive to growth and development -what good is investment when the business and legal environments are so bad that you cannot guarantee returns? Moreover, it is important to consider the opportunity cost of capital? A mainstream VC obviously will not invest in a fund that's offering 5 percent when he could find something that's delivering 35 percent. The problem clearly for investors and entrepreneurs is how to effectively apply the venture capital model to social enterprise. How do we make it workable and most importantly scalable? That is the challenge.

The Problem With Philanthropy

I've always been struck by the portrayal and advertisement of poverty in the West. Counter-intuitively, the West is also in Africa, or at least in South Africa, where it is neatly contained in a thin film that permeates the surface level of urban life especially. In this "West", the understanding of poverty and how life unfolds for a poor person is quite limited.

Professor Bill Easterly captures the disconnect in a succinct quote offered by Acumen Fund Founder. To paraphrase,"The problem with philanthropy is that none of the rich people know poor people." This may help explain the desperate need for products and services that fully incorporate Base of the Pyramid (BoP) consumers as design partners with scientists, engineers and anyone else charged with meeting the needs of the poor.

The point is that the poor need solutions that are tailored specifically to their own needs. It's is laughable that most Indian cooksters are designed by European males who have probably never cooked. There is so much room for bottom-up destructive innovation that taps into the end consumer as a valuable resource and source of knowledge.

Microsoft Chief of Research and Strategy Craig Mundie thinks of the innovative process at the BoP level as "serve and return"--serve something up and the market returns it back with a yes (high demand)/no response. Disagree. I think for real innovation, to really include the poor--who by capitalists' design have been excluded from the efficiency of the invisible hand--we have to challenge ourselves not just to create goods with the BoP in mind, but to allow the BoP to drive the creative process and start shifting the needle on the power dynamic.

I get quite heated with excitement listening to people acknowledge the skewed power and privilege struggles embedded in how "we" serve the poor. What really gets me going though, is hearing people drive the conversation to why BoP products should not only meet a functional criterion, but they should also be beautiful, sexy, desirable--tipping a nod to the dignity of life at the BoP level, as anywhere else on the food chain.

I think the skill that's hardest to learn is what we call "moral imagination", the idea of truly being able to put yourself in the shoes of other people and build products from that perspective.

I'm reminded of Soweto in Johannesburg and how tough Sowetan consumers are to crack. You have to deliver quality. It has to be practical and sexy, it must be desirable and above all beautiful.

In an economy where income per capita is an average R8,000 per annum--roughly $1,073, people still choose products that, at least subconsciously, reinforce their human dignity. Sara Lee's Kiwi Shoe Polish has its biggest market in Africa. Even if it's the only pair of shoes someone has, you better believe those shoes will shine. And you have never seen so many lace curtains in your life. Walk into any Sowetan home--even in shacks--and I guarantee almost always windows graced with beautiful white lace curtains that befit a bride. The poor want exactly what you want--quality. Innovative social entrepreneurs deliver BoP quality that's equal parts cheap, quality and cheerful.