Sunday, September 21, 2014

India has a market South Africa has a future in Innovation

I believe that South Africa has a great future in Innovation. However many great startups in SA have a singular problem. The market in SA is very small and limited. While the Indian market is extremely large and variegated. Why do i say SA is moving toward an innovation culture and away from a manufacturing culture?
1. If one looks at the number of protests in the manufacturing sector it remains to be seen how long this sector can last before government steps in or foreigners purchase all the companies ( if they haven't already).
2. The cost of doing manufacturing in SA is just too expensive. Labour, electricity, rates and taxes etc etc etc. It doesnt't take a brain surgeon to realise that it will always be made cheaper elsewhere.
3. Very few manufacturing companies will invest here unless there are massive tax incentives ( like the automotive industry) where the taxpayer gets screwed completely.

However SA is brimming with confidence when it comes to innovation and entrepreneurship. Why?
1. Because jobs are becoming scarcer even with a degree
2. Universities are starting to push innovation and entrepreneurship
3. The whole country and government is starting to push Innovation
4. It cost far less to have an innovation industry developed than a manufacturing sector. These sectors also help build older property areas.

But the most important aspect is that young people in SA want to be innovative and entrepreneurial as they see a future in this sector. SA also has some fine examples of innovation in the last 10 years that have been exported globally.

This hunger will drive the wave of Innovation in SA.

So I see SA's youngsters driving Innovation but they will need a big market to make a success of their new venture.
I believe that this market is India.
I believe that SA innovators should take selected SA innovations and start testing them in the Indian market. Since India has such a big market it will only take a small part of that market and a few great innovations to make millions.