Africa: Future workshop of the world

Following my recent facilitation of the #manufacturing forum at the American Chamber of Commerce, Kenya Business Summit, I want to share the key insights arising from the discussion.

Firstly, Africa should be confident in showcasing the success it has already achieved in advanced manufacturing. As the continent continues to develop its manufacturing capabilities, it is essential to communicate these success stories to the world and demonstrate Africa's potential as a manufacturing powerhouse.

With a large youthful population and a growing manufacturing sector, Africa has the potential to become the future workshop of the world.

1.??Africa's youthful population, with over 60% of its population under the age of 25, presents an opportunity for the continent to become the future workshop of the world.

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To achieve this, African governments must focus on providing future skills relevant to the future of manufacturing, such as technology, automation, and data analysis. By doing so, they can ensure that the continent is prepared to take advantage of the changing manufacturing landscape and remain competitive in the global market. For instance, Ghana is already leveraging its young talent pool to create tech-enabled manufacturing jobs, leading to increased productivity and exports.

?2.????In contrast, Asia, which has long been considered the world's manufacturing hub, is experiencing a decline in manufacturing growth. Countries like China are facing challenges such as rising labour costs, stricter environmental regulations, and an aging population. This presents an opportunity for African countries to attract manufacturing investment by offering cost-effective labour, favourable business environments, and abundant natural resources. Kenya and Ethiopia, for example, have attracted significant foreign investment in their renewable energy and textile industries due to their competitive wages and favourable investment policies.

3.????Africa has already demonstrated its potential in advanced manufacturing, particularly in the automotive and aerospace industries. South Africa, for instance, is home to several global automakers, while Morocco has become a hub for aerospace manufacturing. Furthermore, African countries are prioritising sustainability in manufacturing, with Kenya implementing green manufacturing policies and Rwanda investing in renewable energy to power its manufacturing sector. By showcasing these successes and investing in future skills, Africa can become an attractive destination for manufacturing investment and lead the future of global manufacturing.

Our teams at EY are working with manufacturers across Africa to advance technology, efficiency and innovation for the future.

To gain a larger share of the global manufacturing market, manufacturers in Africa must focus on reinventing their business models. They have the potential to lead in their value chains by embracing new business models that prioritize value creation. This is the key to successful growth strategies in today's global economy.?

When value creation opportunities require capabilities beyond their core competencies, manufacturers should consider building or joining an ecosystem. This approach will enable them to leverage the expertise of others in their value chain to create and capture more value.

Product-centric innovation alone is not enough to gain a competitive edge. Manufacturers must also develop innovative business models that enable them to create and capture value in new ways. This can be achieved by combining connected products, customer knowledge, and the right ecosystem of relationships.

Forward-thinking manufacturers in Africa are already broadening their innovation efforts to include their own business models. They recognize that this is crucial to their long-term success in the global manufacturing market. By embracing new business models and collaborating with others in their value chains, African manufacturers can position themselves to become leaders in their industries.

At EY-Parthenon , we are helping our clients achieve continuous delivery of higher-quality, advanced products and processes in order to deliver greater margins and drive faster, permanent innovation. The ‘Internet of Things’ is revolutionising many aspects of manufacturing operations, including real-time production monitoring, improving metrics accuracy and production efficiency.

Key to any success manufacturers should be embedding #artificialntelligence , #blockchain technology and #robotics in their operations today. The convergence of these new technologies will fundamentally shift the manufacturing enterprise. A new workforce with the ability to augment these technologies is beginning to emerge.

We understand how to improve productivity for smarter, faster and more advanced manufacturing. Our 安永 Smart Factory methodology helps businesses achieve operational efficiency across the enterprise to build a better tomorrow.

Lastly, EY is helping clients reinvent their supply chains in order to effect a fundamental change in their performance to support sales growth, become more cost-competitive, minimize risk and improve operational resilience.

A smart way to look ahead!

Frank Mwiti is the 安永 Eastern Africa Markets Leader. He also manages the EY-Parthenon strategy and M&A practice across Eastern Africa.