Jean-Claude Bastos:


073 – Innovation in Africa with Jean-Claude Bastos

Jean-Claude Bastos:


073 – Innovation in Africa with Jean-Claude Bastos

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In this episode, we are joined by entrepreneur and innovation influencer, Jean-Claude Bastos. Jean-Claude is the founder of Quantum Global Group, Banco Kwanza, Angola’s first investment bank, and The African Innovation Foundation (AIF), which aims to support sustainable projects in Africa and hosts the annual Innovation Prize for Africa.

  • Jean-Claude’s perspectives on Africa developed from his longtime experience through education, innovation hubs, and technology training and why he sees the continent as “the last frontier in business and innovation”
  • How the demographics of Africa – where in 60% of the population is under 19 -years of age – impacts its approach to innovation
  • How the African Innovation Foundation has helped innovators transform $13m of investment into $200m of valuations

Key Takeaways and Learnings

  • How the AIF’s created an innovation ecosystem, which includes an incubator, accelerator, co-working spaces, make it spaces, and cultural hubs to connect innovators and investors in Africa
  • How companies who have invested in Africa have used employee ”loyalty programs” as an approach to retain local talent, where social safety nets are often weak
  • The traps international businesses risk falling into if they view Africa as a monolith. Its diversity of histories, languages and cultures, etc., mean that approaches to business vary widely across the continent

Links and Resources Mentioned in this Episode

 

Summary

In this episode, we are joined by entrepreneur and innovation influencer, Jean-Claude Bastos. Jean-Claude is the founder of Quantum Global Group, Banco Kwanza, Angola’s first investment bank, and The African Innovation Foundation (AIF), which aims to support sustainable projects in Africa and hosts the annual Innovation Prize for Africa.

Jean-Claude Bastos

Jean-Claude Bastos is a Swiss-Angolan entrepreneur, an executive, and an innovation influencer with a deepest interest in Africa. Beyond his work at Quantum Global Group, Banco Kwanze and the African Innovation Foundation, he also has wide-ranging interests that span literature, music, art, science and community service. He is the co-editor of the book Innovation Ethics: African and Global Perspectives, co-published by Globethics.net and the AIF. His second book, The Convergence of Nations: Why Africa’s Time Is Now was published by OMFIF Press in collaboration with a team of 31 authors from 15 nations.

What Was Covered

  • Jean-Claude’s perspectives on Africa developed from his longtime experience through education, innovation hubs, and technology training and why he sees the continent as “the last frontier in business and innovation”
  • How the demographics of Africa – where in 60% of the population is under 19 -years of age – impacts its approach to innovation
  • How the African Innovation Foundation has helped innovators transform $13m of investment into $200m of valuations

Key Takeaways and Learnings

  • How the AIF’s created an innovation ecosystem, which includes an incubator, accelerator, co-working spaces, make it spaces, and cultural hubs to connect innovators and investors in Africa
  • How companies who have invested in Africa have used employee ”loyalty programs” as an approach to retain local talent, where social safety nets are often weak
  • The traps international businesses risk falling into if they view Africa as a monolith. Its diversity of histories, languages and cultures, etc., mean that approaches to business vary widely across the continent

Links and Resources Mentioned in this Episode

 

Jean-Claude, welcome to the Innovation Ecosystem.

Yes, thank you very much, Mark. Pleasure for me to be here and to be invited as a speaker. I’m looking forward to the interview.

So, Jean-Claude, your resume is broad and deep and I only touched on the highlights, but perhaps to get going into the conversation, how do you answer the dinner party question ‘What do you do?’

Well, I try to simplify and just say that I’m a private equity player and I’m working in three different areas which is finance, consulting, and real estate, and that I’m an entrepreneur which is focusing his activity since the last fifteen years into Africa because I’m a big believer that this is the last frontier where a lot can be done.

Okay, and let’s get into that because, as you say, you’ve been active on the continent for many years. One of the things you founded was the African Innovation Foundation in 2009, and this foundation amongst other things runs the Innovation Prize for Africa, so maybe we can start here. What is unique about innovation in Africa and how is it different from, for instance, innovation in Switzerland?

Yeah. Mark, let me quickly contextualize this. Africa today has approximately 1.1 billion people and 60% or more of it are nineteen and below, and according to various statistics the demographic should grow from, over the next generation, if we take a generation is thirty years that means that in approximately 2050 we will have 2.5 billion people in Africa and approximately 70-75% are going to be eighteen and below, so this is a number which may sound frightening but could also be seen as a chance because if you look at it from the perspective of innovation, one of my dreams and that was also one of the reasons which I would say prioritized when I founded the African Innovation Foundation and when I created the Innovation Prize for Africa, I was thinking, ‘What can I do to turn that number and this potential into something very, very positive’ and that would be then my kind of contribution to the continent. I was looking at that thinking that the continent looks to me like a very early stage market. There’s so much which needs to be done and can be done. There’s so much young people which have so much dreams in their head so this should be used, and when I looked eight to ten years ago when we started to think about the Innovation Prize for Africa I thought, ‘Okay, what is it really what we need to create with this prize?’ and the answer was quite simple. I need to be able to create the innovation spirit. What does that mean? That means that we have to be able to give hope and belief to the local small community of innovators and try to make that thing become viral and spread it all over, so that all young Africans want to be innovators because that will make a big click in the brain of all young people because then they will not wait until politicians or programs to change their life, but they will attack the problems by themselves and seek for solutions, and help their communities with their ideas and their creativity. So, we have then created that platform which is a platform where we give about a $185,000 dollars prize money, $100,000 dollars to the Grand Prize which is then the winner, $25,000 thousand dollars to the second, and a Special Prize for the higher social impact, another $25,000, and $5000 to all the nominees which have participated. What we wanted to do with this is to create a perception that innovation in Africa is important and has a value, and with this, we were able to create a platform where we attracted a lot of invisible innovators because when we started everybody told us, ‘You guys are crazy. In Africa, there is no innovation. Innovation is non-existent, it doesn’t exist,’ and now we have within the African Innovation Foundation created the biggest database on African innovation in the world, but we have over 9400 innovators and innovations in our database, and we’ve been able to create a $13 million investment for the nominees and this has generated a $200 million valuation only out of these nominees, and this comes from fifty-five different countries in Africa, and we have then created a kind of small community of 41,000 followers of this Innovation Prize, so we’re quite proud of what we’ve done, and obviously I can talk much more about this but I don’t know if you have further questions but I can tell you that it was quite a journey. It was quite exciting to see how much joy and belief we have been able to generate within the nominees and all the people which are participating, and I invite you to come to the next Innovation Prize for Africa to see and live it by yourself because you will see how much passion the young African innovators have and bring to the table, but I have to say it has been a very positive journey so far.

So, if I understand, what you’re saying, I think, is you started with mindset, you started with tapping into the spirit and the future aspirations of what is a very, very young continent essentially, and then secondly, it’s very much a sort almost like a grassroots movement that you’ve spared and you’ve fueled with the prizes and the infrastructure around those prizes. Is that a fair description?

Yeah, this is a fair description. I would even say that we have been able to generate that first because it even cross-fertilized from the innovators to entrepreneurs, then to the politicians, because we’ve been able when we’ve launched in 2011 the Innovation Prize for Africa in partnership with the United Nations Economic Commission for Africa, that was for us quite an achievement, and then in 2012 when at the joint African Union and UNECA conference the Innovation Prize for Africa received the indorsement of all these ministers which were there attending, and we managed to pass a resolution with all member states to work with the African Innovation Foundation and the prize to promote innovation based societies in Africa, so after that what had been created there was a kind of a movement which came out of this resolution because a lot of ONGs, NGOs, followed that, and we could really literally feel that in the years after that you had a lot of NGOs, innovations, coming into Africa with all kind of accelerator and incubator programs, make it spaces, co-working spaces and all that. It was like we got a kind of a ball, a snowball rolling, so that was a kind of a big achievement from our perspective. Another important achievement is that we have signed Memorandums of Understand (MoUs) with innovation hubs and we were kind of instrumental to opening this innovation hub, for example, the Botswana Innovation Hub where the president of Botswana then was present at the Innovation Prize and we integrated that. We signed with the Academy of Science an MOU where we have a collaboration to make research with researchers and scientists for grassroots innovation. We have been able, I don’t know if the right word is to ‘motivate’ the President of Ghana during the Innovation Prize which we had in Ghana, to make an open statement that he is now giving between 1% to 3% percent of the GDP for innovation, so there’s a lot of things which we’ve managed to move so, yes, we have generated a spirit, we’ve generated a movement, we have been instrumental in many decisions and things. We have now generated a kind of new ecosystem style which is an incubator, accelerator, co-working space, make it space and cultural hub in Angola which is called The Soap Factory. We have launched the ZuaHub which is a platform to connect innovators in Africa and help them to grow and find investors, so there are many, many, many things and I can even mention more than that which has been done over this journey where we focus on innovation.

And what are some of the myths about innovation in Africa which you would like to dispel or which you’re bumping up against but are just that, are myths if you like?

I don’t know what you mean with myths, if you mean like hurdles?

More, Jean-Claude, what are the misperceptions, if you like, when you’re sitting in Europe talking about, what’s the commonly held view that is actually fundamentally incorrect from those who don’t really understand doing business in Africa?

Yeah, well, I would say that in terms of innovation I think that people think that Africa is still what sometimes you see in television when you see the wild animals and when you see all these tribal things and music going around. I think Africa is now a thriving place where a lot of young people have the willingness to work hard, and are looking for jobs, and are creative. You have a growing middle class. Obviously, you have a lot to do. There’s a lot of infrastructure which is missing, there’s a lot of education which is missing, but you can feel this willingness that people have to participate in the economic growth. They create more and more companies, you have more and more little young startups. Of course, it’s not in comparison with Europe, it’s, I would say, on average you still have quite mid and low-level innovation, but there is incredible innovation too which have even potential in Europe, and I have one innovation which has marked me dazed. Many innovations are incredible but this one which I have specially looked at, a specific African innovation. It’s an innovation which is called, the company is called AgriProtein, and they won the prize of 2013 and they came out of South Africa, and basically what they invented is a kind of a new nutritional product which is a natural feed for animals and this is coming out of fly larvae, and this-

Coming out of what, sorry?

Fly larvae, and the fly larvae are fed by biodegradable waste and this feeds them the flies that in return produce the larvae, and the larvae are then in the ground and they are with a specific system they are heated and they get dried, and they have a higher degree of protein and provide more ecologically friendly, naturally occurring type of animal feed than I have seen in any other product which is around, and this approach really improves the nutritional values of meat and lowers the cost of animal feed for African possessors and farmers in a tremendous manner, and you have to imagine it’s a fly farm and incubation time is incredibly fast, because if you see, some of our chickens, they eat fish or product coming from fish, and this is totally not natural for chicken, but if you have larvae and specifically in these larvae, they are incubated in eight days. It’s a fast incubating time, it’s high protein and it’s natural, and it’s quite simple to do. You have this natural waste and you have flies, and this is an interesting market fact that they have even started to sell that in China and [inaudible 24:06] one of these innovations which come out of nothing which can only come out of Africa based on the needs of saving money and which asks special creativity. I can mention many others but that’s an example of what can come out of African innovation.

I mean, that’s fascinating because one doesn’t hear, I think one of the best or the most commonly discussed innovations is M-Pesa, the mobile phone money transfer business, which is similar, I guess, to WeChat in China, but one doesn’t hear much about innovations that actually are exported from Africa, and I guess I’m curious as to why do you think that is because a lot of the innovation, the coverage of emerging markets if you like, it tends to be more around India and China, I’m just curious as to why the lack of interest? Is it because it’s earlier stage in Africa than those other markets?

Yeah, I think that’s certainly one of the reasons, that it’s earlier stage but you have to see that also there’s a lack of many things. The lack of financing and bringing it to the next level, the fact that you don’t have the right infrastructure in place in many African countries is also increasing the price in terms of distribution and logistics, the fact that you have a lot of inefficiency in the market is also artificially increasing the pricing of even local products. I think that Africa has still a long way to go but I think it’s in the right direction now, and we have heard from the Ghanaian president which has made an interesting speech, ‘Africa for Africa.’ I think it’s time for the African people to look out for their own kind of enterprises and to believe in the African enterprise and consume the African product, and it’s time that the African entrepreneurs also start to believe in African innovation and start to build that in their R&D because I can’t see a lot of research and development is not in the culture of African entrepreneurs yet, and I think this is also a big, big, big, big problem. Obviously, lack of education and lack of equipment in universities where they can’t have the specific labs where they make the researches, this is also something which lacks, so that makes it a different and difficult journey for local innovators to come out of that kind of embryonal stage and then bring their product to the market, I mean, it’s not easy in the Western world but it’s even more difficult in Africa, so that’s why we have created these platforms and that’s why we have emphasized also in creating specific ecosystems which have all kind of different levels and layers all in one, so when I mean all in one I mean to have a co-working space together with a make-it space together with some designing platforms where young designers can come and design together with incubators together with accelerators, and then also some spaces for a kind of technoparking approach where you have enterprises which can go and rent some space. I think the big innovation which we have which we brought to the market is that we’ve made a bet that we think that innovation has a big attraction into the slums, specifically in Africa, because we believe that the barrier of entry is lower there and the willingness to not give up something and to fight for something is higher, and the pool of young people is quite impressive. I can tell you that we have in our make it spaces and our courses which we give, for example, in The Soap Factory in Kazenga, in Rwanda, we have young kids which were not able to almost read, we brought them into 3D printing and we’ve showed them to dismantle and build 3D printers and to try to find a kind of secondary maintenance tools out of little phones, second hand or destroyed phones, and they have been able to rebuild 3D printers with spare parts which they found from televisions, which they found from phones within one month of training, so I have been amazed and I’m still astonished by the capacity of these young people and their willingness to learn. They sleep sometimes in this factory just because they are afraid if somebody else comes and takes their place. Incredible.

It sounds a little bit like this concept in India of frugal innovation, the jugaad, where people cobble together from whatever they’ve got to hand and build out very, very specific solutions to local problems which don’t have any excess features, it’s purely solving the problem at hand. It sounds like the ecosystem that you’re putting together is tapping into that sort of desire amongst the young or that capability amongst the young to do that?

Yeah, I agree, I agree. I haven’t seen this there but if this is existing there then we’re following their path because that’s exactly what we’re doing, because we believe that we have to show them that they can do it because they often they are afraid of a new technology and they see this as a black box, and they don’t think that they’re able to do something, so we open the box, we train them to not be afraid to touch things and to try to put something in, and having a kind of learning by experience approach and we’ve seen that this has a tremendous effect in all kind of sectors, so, yes, this is what we are doing.

So, Jean-Claude, let’s switch a little bit, you started your career as a management consultant, so if we switch to the more enterprise part of the marketplace. I presume in your Quantum Global Group, the company you founded, and also the investment bank in Angola. They’re less involved in grassroots innovation, they probably might be more involved in advising multinationals trying to penetrate these markets or national companies looking to expand across Africa, and I’m just curious as to what are some of the – let’s just take one example, what do you see multinationals being successful in Africa, what do you see them doing? What are some of the leadership behaviors that are actually working as people are coming into Africa from outside, for instance?

Well, at the multinational level on the companies which we brought in or which we advise or others,  I think that the big success factor is always hedging their risks by having bilateral contracts with the government, that’s always something which is important at the big company level where you have this leverage, and most of the big companies use this leverage which makes sense, and then where I believe I’ve seen the biggest level of success is always when the company’s teamed up with a serious sound local partner where they can rely on to resolve problems, to tell them about the difference in terms of the entrepreneurial culture, of perceptions from the government, and tell the employees and competition so that they can understand where they may make a mistake and use that as a risk management tool, so that they have preemptive approach, so that they get more intelligent marketing in order to not make the mistakes because the fact that multinationals are big players and are big job creators, sometimes they have the wrong approach and then it can turn sour because then you became vulnerable locally, then people are negative towards that enterprise. I have seen that in different cases, so I think it’s very important to have a sound selection process for a local partner, and then also, have a very, I would say, patient approach towards the local culture. Make sure that you provide a lot to the local community and that you create a kind of a loyalty program with the key employees because the key employees get very quick value in the market, because if you train them, what I have seen in the past is that they jump over quickly to other companies which come at a later stage because they see the first success, so I think it’s important to have a loyalty program for employees and to give them a kind of a social safety net because they don’t have the social safety net coming from the government often. So, if you have loyal employees, that’s very, very useful.

And when you say local culture, up to now we’ve talked about Africa as one continent and we haven’t distinguished really between countries or between different ways of doing business even within a large country like Nigeria, for instance. How important is it to understand, when you say local culture are you talking at the national level or are you talking at a more micro level?

No. Well, first I would say that it’s important to understand the national level but then it’s also important to understand the sector, the behavior they had in the past, because sometimes you disrupt some of the local habits and local businesses by coming in, and obviously, you push away the local importers and there are maybe long term business people in the market, so what I mean is you have to understand the culture. I mean yes, it’s a big difference between the countries because it’s a complete but really deep, deep difference to do business in Nigeria, and do business in Angola, and do business in South Africa. It’s all on the same continent but it’s a huge cultural difference. A successful South African businessman may not be successful in Nigeria or might not be successful in Angola or may not be successful in Kenya, so there is a huge gap in terms of culture, local understanding, understanding the languages which are spoken between the lines because I would say it’s not like other big cultures, or like in China, or like in Japan, but I’d say that the difference between one country to another and you not understanding that difference can be the key element to the success or to failure.

And I’m glad you mentioned that because I was going to dig into this idea of what does effective communication look like in an African country? To take the example, people in the US or in Germany, people a very, very straight talking versus in India or Japan, and I think what you were just saying just now in certain parts of Africa, there’s far more context, there’s far more understanding of what’s not being said as part of the communication process. What about leadership? Another sort of spectrum here, I guess, is between egalitarian leadership versus very hierarchical leadership. How important is hierarchy in organizations in Africa or is it impossible to generalize again?

Well, I think it depends a little bit on the general style of management you want to bring in, and then it depends on also what country. If you go to countries where they had a kind of communist past, a kind of more horizontal approach is probably more welcomed than in another country which had a more business driven approach over the time, and then it also depends what kind of colonial powers were there, and then it also depends what kind of, I would say, level of sector you were in in terms of business, so I think you can’t generalize but I think in order to summarize, communication is important and if you have an ability to communicate with the community you are in, you can only win.

Yep, yep. And I suppose, the final piece around innovation, the leadership behavior here, Jean-Claude, is around sort of disagreeing because as we know much innovation comes from the conversations between different functions or between different technology providers, or between different disciplines, or between different approaches if you like, and sometimes that grates, and I just wonder how disagreement is handled. I suppose, here in Europe, countries like Germany and France, confrontation is far more the norm versus in other parts of the world, you know, people go out of their way to avoid confrontation. Does any of that resonate with you in terms of, are there places where you’re active closer to avoiding confrontation or more the head on – I’d imagine South Africa given the roots with the Netherlands is more confrontational in terms of disagreements?

Well, it depends heavily on your function and how you deal with the problem, but I would say that in different countries, I would now not want to generalize because again it’s a complicated thing to say, but I’d say that in Africa people tend to, if they are talking to their peers at the same level they’re very confronting, they confront themselves to their peers and within their collaborative environments, but if it goes to have an approach towards another hierarchy level, I think they are very cautious and they don’t say what they think.

Yes.

Often, because it’s very important to have a job there because the unemployment rate is high, so you rather don’t say anything because losing the job is a huge problem and can be trouble. It depends what level you have, and how important, and what your value is in the market, I would say, but in general, they do not really confront themselves with their superiors but between them, they are quite confronting.

Yeah, yep. I’ve seen that on a few occasions I’ve done business but think you put it very eloquently, Jean-Claude. So, I’m mindful of time, so maybe we can just switch gears. I sent across a few questions in advance, if we can just go through them very quickly, Jean-Claude. The first one being what have you changed your mind about recently?

That’s a big question which I was asking myself what I should respond, but I’d say that recently in the last, I’d say two years, it’s a progressive process, I think that I feel that it’s more and more important to have a community approach and communicate well with the community, and I have personally a big need to share my knowledge with this community because I can see that you have a higher degree of loyalty which comes out if you are authentically sharing with the community, and that, I  would say, is something which has recently changed in my mind, and so before I was like me, myself and I a little bit approach, and now I would say that’s a big change, that’s my big personal change.

I mean, it’s fascinating you say that because the last two podcast guests that we’ve had, the interviews I’ve done, one was with a nuclear submarine commander and the other one was with the founder of Yum Brands which now runs 46,000 restaurants around the world. They both talked about that as being their new, well, a recent insight in terms of what is the most effective model of leadership, so, yeah, you’re in good company, Jean-Claude, so thank you for that.

Thank you.

Second question – where do you go to get fresh perspectives to help you solve problems and make decisions?

Well, I think it’s in line with also, I think that what is very, very important to me and I believe I can see that with some of my peers is the approach you have towards a problem. If you have a constant, positive approach and a strong belief that what you do is the right thing to do, and you have a clear purpose why you do this thing, everything you do becomes light and not complicated, that means every challenge which is in front of you, you have a direct pop up of solutions, and I think it’s really a mind thing. You have to be constantly thinking positive. If you can do that and set your mind towards positivity, you can see no problems, and that’s a very, very strong tool and that’s, I think, my main tool which I constantly use, I see solutions everywhere. I don’t feel heavy problems or challenges as heavy as some of my peers, I constantly see solutions, and another thing which I’m trying to do more and more, and specifically since I passed my fifties, I try to have more and more fun in what I do, so that goes hand in hand. A positive approach, have fun, and stay focused, be light, and also thankful to and grateful for what you have achieved and to the people which work with you. I think that has, yeah, that’s probably one of the things which keep me having fresh perspective constantly.

Yep, yep, yep. Well, we talked before we started about the importance of fun, I think that combined with gratitude which is a very, very powerful and misunderstood emotion, those two harnessed can get you a long way very quickly.

I agree, I agree.

And then finally a question around your sort of most significant, I don’t want to use the word failure, but I mean, low, or learning? I’m just curious about what have you taken away, because clearly not – I mean, you do a huge amount as I said in your resume, not everything will always go according to plan. Any big learnings, is there one that you can share that really has turned out to be far more productive even though it might not have felt like it at the time?

Yeah, there is one thing which has happened several times in my career and it’s always hitting me hard, it’s hitting me less hard when it happens, it’s when I get betrayed by an old friend or business people, I think that’s the thing which I’ve always thought, ‘How can they do that? I would never do such a thing.’ I think that’s the worst thing that can happen to someone is be betrayed by people you trust, and what I’ve learned out of that is basically not giving up, to continue to trust even though that happens, trust more in my intuitions, specifically about certain people or behaviors, but also continue when you build an enterprise or project, you cannot, because it happened, start to mistrust people, but you have to get into a kind of a deeper analysis mode towards your intuitive senses which tells you things. I think that’s what I’ve learned over time and that’s because of disappointment constantly.

Got it. Well, Jean-Claude, just before we wrap up, where can people get in touch with you if people want to know more about your work and your activities? Is there a place where they can connect to you? Is there a website or are you on social media? Just wondering what instructions we should give to our listeners and that we can include in the notes for this podcast that would help people connect with you?

Yeah, there is a website which I have, but you have now put me – let me give you this-

Okay, we’ll include it in the show notes, I wasn’t meaning to embarrass you, so we’ll put that in the show notes, but Jean-Claude, I wanted to thank you very much for your time, I know you’re a very busy man. I mean, it’s a remarkable story, a very broad and impactful set of activities you’re involved in, and I’m sure our listeners will have found this of interest if only because it’s a misunderstood sector of the economy or sector of the geography, and what you’re doing is clearly relevant today, but given the statistics and the growth of the demographics in Africa will become increasingly relevant, so I wanted to thank you very much for your time and yeah, very much looking forward to meeting you in person.

Thank you, Mark, same thing here. Anytime, come to visit Africa, come to visit one of our ecosystems in terms of innovation or visit me in one of my companies. You are always welcome.

Wonderful, thank you very much.

Okay, thank you, Mark. Bye-bye.

Goodbye.

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