FEATURE: DISRUPTIVE TECHNOLOGY
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Looking to spur local
growth, Prins Mhlanga,
founder of fintech
company Ocean on 76,
says that South Africa
needs to embrace a
platform economy
business model that is
rapidly transforming the
global economy.
H
aving evolved over the years, a
platform economy is a new breed of
digitally-driven, disruptive business
models. The most distinctive characteristic of
this new model is the ability to expand into
new markets by simply making their platform
available in those new territories. Well known
platform examples include Uber and Airbnb
and online stores operated by the likes of
Apple, Google, Amazon and Alibaba.
These platforms are the technology
base that opens a whole new world of
opportunities for retailers, musicians,
software developers and private property
owners so they can sell without creating their
own online distribution channels.
Their presence in South Africa is evidence
that the model works here, but what
is holding back local companies from
developing their own platforms?
According to a report released by Accenture
and the Gordon Institute for Business
Science, South Africa is far from ready for
this. The country is ranked 14th out of
16 countries contained in the Accenture
Platform Readiness Index and is expected to
remain in that position through until 2020.
Far from seeing this as a blow to the
ambitions of companies building local
platform businesses, this presents a
rich opportunity for business leaders to
accelerate their efforts.
The study, Winning with Digital Platforms,
says that 81% of the 3,000 plus
respondents to the worldwide survey said
they expected platform-based business
models to be core to their growth strategy in
2018. And 27% said that digital ecosystems
are transforming the way they deliver value.
There is little doubt, therefore, that global
businesses see this as a valid way to pursue
growth and customers.
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
rather than an abundance mindset in
which commercial success delivers mutually
beneficial results to all.
This stumbling block, more than any other,
will prevent South Africa from making a
successful transition to an environment that
supports a platform economy.
What we need, rather than this insular view,
is one which everyone can see and realise
the benefits of co operation rather than
outright 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
SA business leaders could
benefit from the power of
a platform economy
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