Efosa Ojomo, a senior research fellow at the Harvard Business School alongside Richard Lesser, the global CEO of the Boston Consulting Group (BCG), an American management consulting firm, chartered a path for firms in Africa’s largest economy that will lead to sustainability, amid a rapidly changing business landscape.
At the BusinessDay 2016 CEO forum held yesterday in Lagos, with the theme, “Leading in a changing world,” experts said the current economic landscape is one that needs an innovative approach to how businesses operate.
While Ojomo spoke on market creating innovation which targets the lower end of consumers, 53 year-old Lesser identified five key sectors that held the highest possible returns on investment.
“Infrastructure, education, agriculture, manufacturing and technology are profitable investments that the public and private sector should look at,” Lesser said.
However, to ensure these sectors are attractive to investors, Lesser says, “Tax breaks, improved ease of doing business and more importantly, getting economic policies right must take prominence.”
According to Ojomo, market creating innovation entails creating a market for a product or service, as against the trend of creating a product or service for a market.
This approach, Ojomo said, is a viable solution at a time when purchasing power is falling sharply, eating deep into the profit margins of companies.
“We can either wait for the middle class or create one by innovation,” said Efosa Ojomo,
“Businesses should resort to market creating innovation in order to create jobs and engender inclusive economic growth. This was the path successful corporate brands followed to attain business prosperity,” Ojomo said.
Innovation is of three types and they include market creating, sustaining and efficiency innovation.
Whereas market creating innovation generates jobs and targets non-consumers, sustaining innovation creates little or no jobs, while efficiency innovation eliminates them.
Nigeria’s unemployment rate has surpassed required thresholds, and as the economy slips into an unavoidable recession, investor sentiments have been dampened.
However, CEOs in attendance at the forum appeared more optimistic than ratings agencies and more recently, the International Monetary Fund (IMF) which forecasts GDP contraction in 2016.
“Nigeria’s best days are still ahead,” Lesser says, as he contended that the country has strong economic fundamentals.
However, the country lacks core infrastructure like railways, roads, sewage systems, housing and power.
Indonesia provides a good model for Nigeria to follow to engender effective Public-Private Partnership in bridging infrastructural deficits, while Vietnam and Morocco are examples of successful agricultural investment models.
At the panel session, Edeme Kelikume, CEO Connect Rail Services Limited, noted that there was an urgent need to invest in rail infrastructure to boost trade and drive economic growth.
Juan Elegido, Vice Chancellor of Pan-Atlantic University, highlighted the challenges in the education sector and made the point that “universities seem to be working to prevent worst outcomes, rather than promoting excellence. Access has become more important than quality in Nigerian universities.” He urged for a holistic review of education, especially in the tertiary institutions.
Udo Okonjo, CEO of Fine and Country, West Africa, said solutions to challenges in the housing sector lie in re-engineering value in real estate and finding creative ways to lower construction cost, encourage efficient home sizes and make pricing efficient.
Businesses are struggling in the digital age as new and nimble players emerge with innovative and disruptive business models.
Many are finding it difficult to transform for the digital era, while others are counting gains.
The need for businesses to acknowledge the fact that consumers in Nigeria are increasingly leveraging digital services to ease the pressure of soaring inflation amid eroding incomes,
The reality of our changing world is that we are headed for a digital driven economy “and CEOs must restructure their business models to maintain and probably expand their market share,” said Frank Aigbogun, CEO of BusinessDay.
LOLADE AKINMURELE, STEPHEN ONYEKWELU, FRANK ELEANYA & ISAAC ANYAOGU
