In this interview, Niyi Yusuf, Managing Partner of Verraki Partners, a business solutions firm clarifies the nexus between innovation and technology, highlights the barriers to innovation in Nigeria and called on the Federal Government to create access to markets for indigenous companies. Jumoke Akiyode-Lawanson brings excerpts.
What does innovation with technology really mean?
Innovation with technology simply means newer ways of doing things that add value to someone. Innovation is commonly juxtaposed with invention, but innovation is not about invention. Invention is when you create something new that doesn’t exist while innovation is when you improve what you used to do in a better, cheaper and faster way to meet new and hitherto unknown requirements. In today’s world, advances in technology have enabled major innovations and technology is now not only an enabler of innovation, but a major driver and source of innovation. To give some examples, let’s talk about mobility. In the past as it’s raining in Lagos now, if I need to go to the Lagos Mainland, I would call someone to ask if there’s traffic but today, you can check traffic conditions on your preferred routes on Google Maps, and see where there is traffic and the fastest route to go, and even get specific directions on the route map. So, that’s technology in terms of journey management. In Nigeria, we use drones for entertainment; to take pictures and do video recordings. So, really it’s around how we use technology to do better, cheaper, faster; the things we used to do and for me, that’s what you call innovation.
What are the factors driving innovations in Nigeria?
I think there are a number of reasons why we’ve seen innovation boom in Nigeria. First; every problem is an opportunity. One of the factors driving innovation is technology, as technology is now more pervasive, especially mobile technology. With over one hundred and fifty million phone subscribers in Nigeria with access to mobile phones with huge computing power, phones more powerful than the computers I used in school. Technology is now more affordable, accessible and available. The second factor is the demographic shift; Nigeria has a youthful demography and population of young people who are quite aggressive in terms of their entrepreneurship and what they would like to do; and who are also more social and mobile. A third reason driving innovation in Nigeria is the linkage with Nigerians in the diaspora. Several Nigerians who schooled or lived offshore have now returned home with the knowledge, insight and experience that they’ve gained. Finally, there’s capital; looking for great ideas and looking for great returns. So, I think a number of these factors have driven innovation.
What are the barriers to innovation in Nigeria?
The lack of a structured process to innovation is a barrier. Innovation is a deliberate process, never accidental. Unfortunately, most companies do not dedicate enough time and resources to support innovation. Secondly, Nigerians generally want quick solutions within a short time; we want results like yesterday but innovation takes a while. Again, some Nigerians have a morbid fear of failure, which usually stops people from moving forward or trying anything and hardly will you succeed at the first, second or third attempt.
What should the government do to foster innovation?
One of the most important is the Ease of Doing Business. To give you an example; we just launched Verraki Partners in April as a new company. While registering with clients, the government MDAs were asking for a three-year financials/audited report, for a new entity! So, part of the ease of doing business is understanding that there are established business corporations and there are start-ups. And for start-ups, we should have different criteria for assessment. Second is access to market, which for me is more interesting than providing subsidies. There’s an Executive Order, EO 5 that speaks to local content and buying national but beyond national, we should create another that focuses on buying from SMEs.
Is a technology hub emerging in Nigeria or is this wishful thinking?
The right word is emerging. We are seeing green shoots that looks promising. If you take the Yaba area or district of Lagos, we have over 60 companies or start-up ventures in Yaba. Last year, Nigeria recorded about $178m worth of investment in to start-ups. So, we’re talking 64 billion naira going into about 148 start-ups – more than 97 percent of that funds came from outside the country and less than 3 percent came from the country. So, if you measure it based on the number of start-ups, based on the capital going into these entities, even based on number of employees, I think we are at the beginning of something promising.
What makes an innovation successful?
Start-ups and companies that are successful are typically those that start with why, that is, they adopt a purpose-driven approach in their business to solving real problems. We see that these companies usually achieve better outcomes, outperform their peers and create more successful innovations. Why am I doing this and what problems do I really want to solve? To give an example, in the early 2000s, whilst I was still in Accenture, we worked with Telnet and FirstBank to create Interswitch working with other banks. And what problems were we trying to solve? Connectivity; connecting the banks together and allowing for online and real-time switching of transactions. Because back then, we only had two banks that had ATMs; First Bank and Societe General Bank. Between the two, they had less than twenty ATMs and these ATMs were offline. Fast-track to today, we have more than twenty thousand ATMs in the country and they are all connected. So, that for me is a good example – solving and providing ability to switch transactions online across various channels. Another product with a purposeful why is Remita. Remita has been solving the problem of how do I pay and make transfers across my accounts in different banks. Most of these examples are FinTech based because FinTech started the journey well ahead of other sectors. So, companies like Flutterwave and Paystack have been very successful, have addressed the issue of how SMEs could be able to accept payments online.
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