The potential for economic dis-intermediation in developing countries

It was commented that it can be misleading to focus too much on where the next billion dollar company will be founded – given that in aggregate billion dollar companies’ account for a small minority of economic activity when compared to the vast array of small and medium sized firms. The exciting future proposition is not just whether an African company will become the next Google (although this may well happen) – but whether the thousands and thousands of small and medium sized enterprises will begin to dis-intermediate developed world firms who have been acting as middlemen in the international economic equation (occupying the most high margin areas of the value chain).

The product branding industry is insufficiently developed in Africa which creates problems in relation to effective brand protection. Western companies will usually have far more success in taking an African product and marketing it within developed economies than African companies themselves. This needs to be addressed through better awareness and education of African entrepreneurs.