HO: So I’ll straight up jump to the few questions that I had for us to build the status, where we are, then next it will be about where we ought to be. Development of small and medium size enterprises are termed as a centerpiece of strategies to achieve inclusive growth in middle east/ Africa. So what in your own considered opinion, the status of their growth right now
Kunle: Thank you Humphrey, that is such an important question you have raised and something of great concern to all of us in emerging and developed markets. The world has almost turned upside down, and the biggest impact has been the SME sector. The SME in itself as you know, is the backbone of development, and continues to be an important contributor to employment in developing economies.
You think about a country like South Africa, which is one of the biggest markets in our region, where we see that the SME’s contribute around 91% of the businesses in that space. In Nigeria, SME’s are contributing around 96% of the businesses in that sector.
HO: This is incredible! So what is happening in a country like Kenya?
Kunle: In both scenarios, they are big contributors to employment in their different countries, and it will be the same in Kenya. There are innovations coming through as well, the state of this space is such that, goods are being produced, but the outlets are scarce. How do you export those goods, move those goods, one of the things that we need to start encouraging is the intra-region and intra-Africa trade to happen so it starts to have some good meaning to our economies.
The important point here is centered around the importance of this sector that cannot be ignored. The question now is how do we, even as technology companies, like Microsoft, help accelerate this space, and how do we help through our platforms ensuring that this segment will grow. There are some smart partnerships that we are trying to adopt, right now within the different regions we are operating in.
HO: That leads me to the next question, so digital technologies have indeed the potential to boost SME’s productivity and growth of economies. But then, to what extent have SME’s been embracing the digital technologies, particularly within middle east/Africa, can they compete?
Kunle: There is a lot of embracing the technology going on today. I do not want to say a cliché of digital transformation, because it is not a cliché. It is real survival, if you do not digitize as an SME, or as a business, then you die.
HO: The harsh reality of things in an increasingly digitized world, are there steps for survival?
Kunle: There are several examples of SME’s that are adopting digital platforms and seeing it as the first step to their survival. For example, let’s look at a company like Twiga foods, we have worked with them quite extensively, adapting technology from a business to business point of view and enabling farmers to take their produce, who are within the SME space from the farms to the retail stores, using mobile devices.
The reality is that we live in a mobile first world. Our own internet penetration, is extremely high. It’s probably in the high 90’s. You will see that this organization (Twiga foods) is using its digital platforms, to make sure that it is connecting its retailers to food manufacturers, and moving those products through the value chain.
Getting some of the young Africans who are very adept in the use of these tools, to get some of these products and services to the end customer, that is how digitization is happening, and all of this runs on a cloud platform.
The backdoor, the engine room for this platform to run is on the Microsoft cloud platform. For example, another company that is doing smart metering in Kenya, Upepo, is thinking about water supply across communities. They have realized that water wastage is a problem, and in Africa, water is a critical part of our livelihoods. They have looked at the whole supply chain, and looked at how we can reduce wastage and they have created real time insights around water consumption and the water processes.
HO: Are they using any Microsoft solutions? And is Microsoft partnering with them?
Kunle: So this company is using the Azure IoT hub, to achieve this goal, everything is being managed with our BI platform which gives the insights, and what we call power apps, they enable some of these SME’s to get information on their mobile devices and understand how they are actually utilizing water within their environments.
So if you are wasting water you would know you need to tighten the usage in a particular part of your business and so on. These are companies that we are working with, I know that Upepo is even applying for the Microsoft AI for Earth grant.
HO: How does Microsoft play a part in this?
Kunle: As Microsoft, we work with service providers who can help SME’s digitize and we also work with the SME’s directly, but when we talk about the SME’s directly, we do it in a way where we can scale.
HO: What does this incorporate?
Kunle: It starts with converting and re-skilling the SME’s in the space, to understand all the digital platforms that are available, and start to get some form of training.We regularly have webinars explaining the services that can be found, and how to help their organizations grow and accelerate.
HO: Which other partners, for instance are you using to ensure that you have pragmatic matters that could enable SME’s that could become effective engines of inclusive growth? You have just alluded that you are working with the SME’s directly which ideally is a good thing but reaching out to every one of them might be a challenge.
Kunle: From a partner point of view, there are two types of partners. We have our traditional partners that are within the Microsoft eco system that we work with on a day to day basis. There are those kinds of partners with developer skills, that can develop applications on the cloud. There are those partners that are we work with on a day to day basis and they are varied across the continent. They are always growing their competencies, and we are always making sure they are up to date with the latest technologies.
That is one set of partners. The other set of partners, they are what we call unconventional partners. We look at a bank as an example, a bank is one of our partners, we serve the bank directly but we also partner with the bank to reach the end customers. Don’t forget that banks are the custodians for a number of the businesses that are out there.
Then we would look at another type of partnership, like the Telco’s. We also work with the NGO’s as partners, who reach the partners, helping the farmers get digitized, there are all sorts of initiatives that we can look into with all these multiple stake holders to engage with.
HO: What does the end goal entail?
Kunle: At the end of the day, the reality is that what are we trying to achieve. We are trying to help make sure that we improve and modernize these SME’s, using the right tools to help grow their businesses. We are just trying to make sure that these SME’s are able to get the right tools for them to be productive in their different endeavors and we have the tools as Microsoft to reach them.
HO: You can tell us something about how you view the future, for SME’s say the next couple of years, 5 years from now?
Kunle: That’s a difficult one but let me attempt. First of all, there is massive opportunity for growth within our region. I talked about the contribution to GDP, the importance of this space. Right now from a cloud provider point of view, our biggest segment by contribution and by growth is SME space, across Africa. I see double digit growth into the future, as long as these SME’s embrace the whole digitization agenda. One of the indicators for this is the fact that you have MWS, google, several Chinese companies engaged in our region, the competition is huge and we will start to see a lot of innovation coming through from different markets. I see a lot of digital transformation coming through our region, and Africa is a frontier for global companies. I am very excited about this phase.
HO: Any parting shots?
Kunle: The last point I want to address is scaling, how do we scale? Through cloud technology, not just the scaling but the skilling. How do we skill ourselves. Just this week we had to spend between Monday and Friday, training our employees on different topics. Whether its about identity, or compliance related issues, security. Just learn and understand that this is a very important space.
HO: Thank you for your time.
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