The platform economy is growing globally but according to founder of fintech firm Ocean on 76, Prins Mhlanga (pictured above), South Africa isn’t as ready to embrace this as the rest of the world.
The rise of platforms developed by Google, Amazon, Alibaba and the like has been helped along by the availability of those company’s platforms.
These firms are able spin up these platforms easily in any country, including South Africa, and sell them on to locals. Local businesses can then make use of these readily available platforms rather than needing to build something from scratch.
That having been said, Mhlanga says that South Africa ranked 14th out of 16 countries in the Accenture Platform Readiness Index.
So why then are locals not making use of these services?
“South Africa’s low ranking is due to a lack of sufficient infrastructure, skills and economic growth needed to support adoption of this business model. The Accenture report says these factors have produced a scarcity mindset rather than an abundance mindset in which commercial success delivers mutually beneficial results to all,” says Mhlanga.
But these are not the only issues local firms face with the platform economy. The Ocean on 76 founder says that a shift of mindset is required where collaboration is favoured rather than competition.
“This might sound far-reaching, but it is a model we have been honing at Ocean on 76 Holdings and is also the subject of my doctoral dissertation. This work is aimed at uncovering and formulating the components needed to establish and grow a local business ecosystem in the digital economy,” Mhlanga said.
The founder believes that this sector is flourishing and in sub-Saharan Africa where mobile is expected to grow to reach around half a billion people by 2020, firms should really begin exploring how platforms can grow their business.
While many businesses won’t ever need to make use of a platform, those that will may benefit financially from using an already established platform.
Firms such as Ocean on 76 are already building platforms with a focus on mobile given its popularity in Africa. Others that pursue this growing sphere of technology will lead the pack in Africa when the explosion inevitably happens.