Don't forget the rest of Africa

The bigotry of low expectations is gradually fading away and a new anticipation of African creativity and technical prowess is gaining hold across the world.

What's less well known is the impact innovation and development in other African economies is having on South Africa's entrepreneurs, workers and policy makers.

As the founder of Paramount Group, a privately owned defence and aerospace company, I am constantly travelling across the continent meeting with everyone from factory workers to chief executives, and what is remarkable to me is how much we South Africans can learn from them.

A bigotry of our own

As much as we hate to admit it, for too long we have held a bigotry of our own: we have looked to Asia and the West for the best ideas and viewed them as our natural competitors, as opposed to our African neighbours.

Nothing could be further from the truth: moving across the continent, I am struck by the creativity, vigour and sheer ambition of Africa's growing middle class.

Ethiopia is a perfect example of this. Their economy is expanding at 7.5% annually and it's not just traditional industries such as agriculture and mining that are growing, but also manufacturing. Just outside the capital Chinese shoe maker Huajian has built a factory employing around 500 workers.

How Africa could overtake Asia...

An economist at the World Bank who recently wrote a report on light manufacturing in Africa cites this as an example of how Africa could overtake Asia to potentially become the world's next manufacturing hub.

Low labour costs, a ready availability of natural resources, and preferential access (duty-free and quota-free access) to the US and EU markets are all some of the advantages of operating in Africa.

Africa's demographic trends are also extremely positive. By 2035, the continent's labour force will be bigger than any individual country in the world, including India or China. Nigeria and Ethiopia will add a total of 30 million workers by 2020 while South Africa is expected to add 2 million.

As opposed to Western economies which are struggling with an aging population, a younger population gives Africa a huge boost, especially in the form of reduced entitlement spending.

A more developed manufacturing base is also likely to reduce the costs of some products which are currently cheaper to import from China than the continent. The boom is waiting to happen: Africans already spend more per head than Indians on goods and services, according to some reports.

It's not just about manufacturing

However, it's not just manufacturing that Africa is excelling in and challenging South Africa. The Economist recently (August 2012) named Nairobi an "African tech hub" because of the hundreds of start-ups that have sprung up in the last few years - quite an achievement given they labelled Africa "the hopeless continent" a decade ago.

Kenya's exports of technology related services have risen from $16m in 2002 to $360m in 2010. It is also a world leader in the adoption of mobile payments technology - and is far ahead of China and India.

Although mobile payments are used widely in other developed countries, Kenya has - to its credit - 'leapfrogged' the traditional stages of economic development to get there.

This readiness and ability to implement new technologies is encouraging and it is this attitude of ambition that we can learn from our African neighbours.

Within a few years Kenya could soon emerge as a world leader in mobile payments and export the technology to countries across the world.

Innovation across the continent

South Africa can also learn a lot from some of Africa's creative industries, such as the Nigerian movie industry, which has overtaken South Africa's to become the strongest on the continent worth £500 million and producing more films than Hollywood every year.

The films may not be international blockbusters, but they have huge appeal across Nigeria and Africa, and prove that Africans have the creativity to compete in non-traditional industries.

This innovation across the continent is having an impact on South Africa in two ways. Most obviously, it's a positive opportunity for us to export our products and knowledge and generally expand trade with other African nations, which in turn will generate jobs for the youth of our country.

South Africa has some great assets - its infrastructure, education system, well developed services sector, stock exchange - that give us the opportunity to provide a range of goods and services to help grow our own economy, but we can work harder to maximise these advantages.

Some serious competition?

The second impact is psychological. The reality is countries like Ethiopia, Kenya and Nigeria are tearing ahead and emerging as serious competitors for destinations of foreign capital.

In short, this is forcing our government and business leaders to look more closely at their policies and approach to business and consider an extra dimension in their policy-making. The harsh reality is that if South Africa is to retain its position as the leading economy on the continent it can't for a minute 'rest on its laurels'.

We are not in competition with the rest of Africa, but we can learn from each other, which is why it is essential we share technologies and collaborate to build strong regional industries that bolster inter-Africa trade.

Working towards collective economic interests

In the past I have called for the creation of a pan-African BRICS as a way of achieving greater collaboration and working towards our collective economic interests.

Speaking from a personal perspective, I've always regarded Paramount Group as an asset to the continent, enabling the sharing of skills and technologies, and I think this is the attitude all African businesses need to approach.

Yet despite the growing confidence and innovation of our neighbours, South Africa is still an economic leader, coming up with ground-breaking ideas that challenge conventional thinking.

One of these areas is defence and aerospace, which South Africa is a world leader in. At this week's African Aerospace & Defence exhibition, taking place from 19-21 September in the City of Tswane, South Africa, Paramount Group will be showing off some of its latest products, which are testament to the skills and creativity of South Africa's engineers.

But we mustn't get complacent, which is why learning from our African neighbours, and adopting a more mature concept of the competition we will face from them in the future will ultimately enable South African to remain the continents economic leader.