A recent Ewing Marion Kauffman Foundation study revived the term “gazelle companies” to describe the young, rapidly-growing U.S.firms that are producing the majority of new jobs in the U.S.  The report recommends that policy-makers nurture Gazelles to stimulate job growth at a time when unemployment is high.

I’m interested in another class of companies—agile, well-run firms in emerging regions like the sub-Sahara. Like their Western counterparts, they’re creating a disproportionate number of jobs. But these young African companies are playing a more crucial role than gazelles do in driving market growth.

To belabor the metaphor, I call them Impalas, after the lean, swift gazelles indigenous to Africa. Impalas provide technology-enabled and outsourcing services to a growing number of multinational (MNC) service providers – mobiles, airlines and banks – in Johannesburg, Accra, and Nairobi, etc.  They share many of the characteristics of gazelles, but there are some notable differences.

Impalas make it possible for their MNC clients to devote more of their limited resources to building their core capabilities. For example, telecoms can concentrate on expanding their network infrastructures and building their brands while their resourceful Impala partners supply customer care and data services.

Business process outsourcers (BPOs) and large enterprises work together around the world—this practice is commonplace. Africa is different because it’s growing so rapidly. Only China’s consumer markets are growing more quickly.

Despite it’s rapid rise, the sub-Sahara’s growth trajectory is unsustainable because of  acute capability gaps in the region.  Companies are struggling to meet the needs of their customers. As African markets mature, Impalas are providing vital, high margin services like customer care, back-office support, and data analysis that require advanced technical and managerial talent.

Just as U.S. policymakers are advised to remove barriers to gazelles’ growth, African governments ought to lend a helping hand to Impalas which are creating jobs and raising standards of living for their citizens.

That’s been happening in economic hot spots like Botswana and Mauritius, but elsewhere on the continent, progressive economic policies are scarce.  Lack of access to capital and excessive regulatory burdens stifle young African companies.  Policymakers in Africa are missing a critical opportunity to move their economies forward at a time when the continent is poised for more growth.

There is an opportunity here for Western companies that can see and are willing to seize opportunities in Africa.  Partnering with Impalas on knowledge-exchange projects can be rewarding. Impalas benefit from acquiring tools and skills that Western companies have developed, and Western companies can become players in one of the most dynamic markets in the world.  Of course, it’s imperative to choose such opportunities wisely.

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As always, I’d love to find out what you think about this subject…

Image courtesy of Daryona

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The term ‘gazelle’  was coined by David Birch of Cognetics (c. 2001) to describe a class of companies that “run fast and jump high.”

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How should businesses respond? We see exciting opportunities for companies to leapfrog the traditional approaches that firms in developed markets have struggled with in the past.  Firms that make the most of their business intelligence and continually seek out new ways to gain new insights about their performance and their customers should have the upper hand.

There’s no magic bullet. Ultimately, it boils down to getting the fundamentals right. Simplicity and agility are critical.  But companies that tighten up their business processes and align their people around a clear, customer-focused strategy can gain a serious competitive advantage.

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Throughout Africa, business knowledge is crucial to economies at every stage of development. It enables companies to establish more effective capabilities necessary for developing thriving businesses. Knowledge transfer between companies makes sense. Well-structured collaborations are thriving and the benefits flow in both directions.

Efforts are mounting to raise awareness. In 2007, an unprecedented string of high profile events placed this agenda on the radar screen. After the Davos symposium and the much lauded TED events in both Monterrey and Arusha, Tanzania, African entrepreneurial successes are getting lots of attention.

In a more modest French conference hosted by Insead last April, “Nurturing Business Education in Africa,” a diverse group of educators focused on practical steps for transferring knowledge. “We will be looking for practical ways that business schools and their professors can strengthen the capability of African schools to train the continent’s future managers.”

A recent CNN Int’l article notes, “Africa is in desperate need of qualified and talented management to help its economies, not only running companies but helping entrepreneurs and ensuring more effective corporate and legislative governance policy”.

The publicity that Africa is getting seems mostly helpful and is growing more so as it attracts not just luminaries, but pragmatic entrepreneurs whose early forays are informing the business community about the region’s market potential. But, a looming concern is this becoming a flavor of the day movement.

Like all trends, it runs the risk of being discarded, supplanted by the next, new shiny idea. Another issue is the process being co-opted by global companies seeking to enhance their images. This may dampen the aspirations of those who genuinely want to make things happen.

This project isn’t for short term thinkers. Gains typically come through successive approximations. It takes patience and perseverance to develop opportunities across cultural divides. But, we’re finding that it’s worth the effort.

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