30 April 2017

Is the Sudanese private sector immune from digital disruption?

startup-photosThe nature of business has changed a lot during the past few decades. We live in an age where product life cycles are getting shorter and customer loyalties are more fleeting. In the past 20 years, we have witnessed massive changes in many industries. Just to mention a few, the telecommunication industry has been disrupted by free calls and messaging applications (WhatsApp and Skype), the music retail industry has been distrusted by iTunes and the iPod, Tidal, Spotify and the list goes on.

Also, in traditional industries, Airbnb has changed how hotels work and Uber massively affected the car-for-hire industry. Locally, many Sudanese startups have worked diligently to innovate in the traditional distribution channels to provide basic commodities in excellent prices.

The Sudanese private sector – though dominated by traditional industries – is not immune to the digital disruption. While it will take a long time before established Sudanese businesses are threatened by startups, as the Sudanese entrepreneurial ecosystem is growing, many bright Startups refresh our hopes of the ability of our ecosystem to produce more high-growth, scalable businesses. Also, as there are many new ways that are helping startups launch their ideas without the need for  large amounts of money (see figure below), I believe that more talented individuals will be launching high-growth businesses, which, in the long run, will provide  job opportunities and strengthen the economy.

cost_startup

Does that mean that startups are a threat? Of course they are not. Because usually startups offer better solutions, products and services that suit the people’s needs. Schumpeter named this phenomenon ‘creative destruction’, which can be defined as “incessant product and process innovation mechanism by which new production units replace outdated ones.” So, it is about creating solutions that work better than their former alternatives.

Moreover, while startups create disruption, yet, in the midst of this wave, winning large companies have discovered that the dynamics that drive success are the same that caused the disruption in the first place: entrepreneurship. Corporate entrepreneurship describes the entrepreneurial behaviour inside established mid-sized and large organisations and the ability of the staff to act and think entrepreneurially and to engage in an ongoing process of innovation, which leads the company to enjoy a sustainable competitive advantage.

A corporate innovation can be a new product or service, an administrative system, or a new business model. Corporate entrepreneurs focus on reengineering and enhancing the firm’s ability to acquire innovative skills and capabilities. Corporate entrepreneurship is nothing more than a process, and any process can be managed. It is not a quick fix. However, it creates a sustainable competitive advantage for the firm. And, it is nearly impossible to compete without it, especially in the challenging business environment in Sudan.

The entrepreneurial orientation for firms is the intersection of the creative power of entrepreneurs with the economic engines of large organisations. Hence, the future belongs to those who dream, believe in, and pursue entrepreneurial excellence.

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