Platforms are altering business processes and value creation mechanisms as previously witnessed across traditional pipe businesses. Africa has over 300 active digital platforms that serve millions of consumers across every sector of the economy – health, education, commerce, tourism and hospitality, government, information technology, and others. The rise of the platform economy has also popularised the concept of sharing, which has been with Africans for centuries. Through platforms, economic models have also evolved, allowing asset owners to monetize idle assets by offering these assets to those in need of them for a commercial fee using pay-as-you-use (PAYU) pricing models. This chapter serves as an introduction to the concept of platforms and the sharing economy while highlighting industry trends and opportunities that have been triggered by this innovative and disruptive business model.
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‘Sharing within social networks is central to economic life in much of Africa’ (The Economist, 2019)
African economies have been attempting to leapfrog development through technology deployments. While traditional pipe businesses have been the dominant drivers of these economies, a new class of business model is disrupting this incumbent model. The growth and adoption of the Internet as a communication and knowledge-sharing platform has resulted in complementary technological and transformational developments including, but not limited to cloud computing, social media, mobile technology, and big data. These technologies have created new business models, such as the on-demand economy and a new sharing economy. While the on-demand economy has primarily grown out of industrialised economies especially North America, Africa has been known to communal living characterised by sharing. Literature has shown that the introduction of information and communication technologies (ICTs) to everyday life and business has redefined the concept of sharing and evolved an entirely new spectrum of sharing - both at the individual and business settings. Alongside this new spectrum is a new disruptive business model known as the platform business model. Prominent examples in this category include businesses such as Facebook, Google, Airbnb, Amazon, Alibaba, Rent-A-Runway, and others.
Many of the largest and most successful businesses now operate as platforms given the role of technology in today’s digital world (Fenwick, McCaherry & Vermuelen, 2019; Parker & Van Alstyne, 2018). Platforms have been evolving across several industries such as finance, entertainment, e-commerce, logistics, agriculture, health, education, hospitality. David-West, Umukoro, and Onuoha (2018) argue that research on platforms is nascent with limited literature. To this end, little is known, much of which is not yet validated locally. While the subject continues to attract interest globally consequent on the relevance and roles played by platforms in driving economies around the world, there is need to deepen understanding of this subject to validate global perspectives on platforms as economic drivers within the African context. In 2014, the Centre for Global Enterprises (CGE) launched a survey-based research project on the emerging platform economy, acquiring regional data on platform development from China, North America, Europe, India and Sub-Saharan Africa (Evans & Gawer, 2016). Within this purview and from an African perspective, David-West & Evans (2016) explored platforms in relation to their emergence, locations, typologies, models, scope and partnerships. Despite these efforts at understanding the African platform landscape, not much is documented, especially as it relates to platform entrepreneurship, contribution to economic development and digital jobs creation.
The platform-led and the sharing economy has disrupted traditional industries and has been hailed as the next frontier of crowd-based capitalism, more so, in Africa. However, with an upwardly mobile youth population and entrepreneurial innovation hubs emerging across the continent, there has been little research to validate these assumptions. This book provides an evidence base on platform dynamics and how they impact Africa as a continent leveraging technology for socio-economic development. This narrative is necessary given that amidst the emerging platform economy bubble, several platforms are unable to survive in the long term as their global peers and exit the platform ecosystem almost immediately following a start-up phase. Besides platform survival, are several other issues to contend with if Africa is to reap the benefits of the platform economy. The number of active digital platforms in Africa reflects on the current regulatory landscape regarding platform evolution across Africa. With the advancement and deployment of technology in governments, issues such as data privacy and security, data protection, consumer rights, intellectual property, and copyrights continue to receive wide attention. The European General Data Protection Rules (GDPR) and other policies and regulations will affect the design, deployment, and use of platforms for businesses. Africa as a developing continent still has much to do as some of these policies and frameworks are absent and may inhibit her from fully maximising the benefits that the platform economy offers. The understanding of these dynamics is essential for not just academicians within the domain, but also for industry players and policy makers within Africa’s technology ecosystem.