Used to be called an African giant, and ever since its announcement as Africa’s largest economy early in 2014, Nigeria has proudly secured its position with pride – a position that points to it as the pacesetter in the African community. Exploring the emergence and success of disruptive innovations within the Nigerian context is definitely worth the investigative rigour.
It begs to answer the question again…. what is disruptive innovation?
While Clayton Chritensen’s theory of disruption has been under massive attack in the last few months, it is worth noting that the new market theory is something to consider in the case of Nigeria (read more about the new market theory here). In the new market theory, technologies/products are introduced to a new market that are usually not attractive to large corporations (who would rather sell their products, provide incremental innovations and satisfy their mainstream customers elsewhere), but extremely attractive to smaller industry entrants (or startups) who do not mind to sell at profit margins lower than what incumbent products and companies may have.
Why then is Nigeria a likely successful case study for the new market theory of innovative disruption? Thinking about the consumer class, Nigeria currently has just above 8million households that fall into Mckinsey’s “emerging consumers” category. They have “sufficient income to meet all basic necessities and have money left over to start buying more and better food as well as health and education services”. The staggering statistic is the fact that by 2030 an estimated 35million households (160million people) will be living above that threshold. This inherently means that purchasing power will increase, coupled with the internet and technology savviness of the emerging youth population (constituting more than 60% of the entire population of Nigeria). A quick scan of this shows that this market may be just ripe for nurturing disruptive innovations …. new market disruptive innovations.
I will dare say that the quickest source of new market disruptive innovations may be the indigenous companies in the country. Robust market insights, ability to navigate successfully through the often difficult bottlenecks present in the commercial structures in the country and a necessity to stick to the lean approach of product prototyping (due to a dearth of resources), will dictate the success of these startups in adapting to the market dynamic. These indigenous startups/companies are the disruptors that will emerge in the landscape.
In my next few articles, I will be exploring these possibilities further and try to support the statement: Why Nigeria may be home to the next disruptive innovations.