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Much has changed in Africa since 2014 when oil-rich nations began to see their incomes slide and the global recovery began to falter. During these years of change, African governments redoubled their focus on economic diversity and innovation, which we know go hand-in-hand. Yet in the context of a region that continues to suffer from high levels of poverty, disparate infrastructure and young capital markets, Africa’s entrepreneurs continue to face an uphill struggle. Africa needs to accelerate enterprise – it is a region that is set to become the youngest population on the planet, hungry for economic success; stymied by structural, regulatory and fiscal hurdles.
This is why I believe that Africa needs to create an innovation ecosystem that is cohesive: allowing entrepreneurs to access all African markets and reach out across the continent. Incubator hubs have already become widespread – in September 2015 the World Bank estimated that there are 117 technology hubs. The traditional incubator model is increasingly commonplace in Africa, with government-backed incubator hubs emerging in places such as Botswana. The government’s 57-acre Botswana Innovation Hub (BIH) will operate as a science park, supporting home-grown innovators in science and technology.
The new incubator model
Incubator hubs typically offer seed funding in exchange for an equity stake – a model that continues to be relevant but is restricted to ventures that demonstrate strong commercial viability. They aren’t so great at providing space for blue-sky thinking or risk-takers. Maker-spaces do provide such an environment. These community-operated workspaces are designed as a platform for entrepreneurs with common business interests to meet, socialise and collaborate. They also provide space for non-conventional innovations to be explored and developed, free from the financial restraints and expectations of a profit-driven investor.
Supporting marginalised entrepreneurs
Makerspaces are particularly important in Africa because they provide a platform for individuals to use their local expertise to create solutions to problems that exist in their own communities. This also lends itself to the ‘made in Africa’ factor, which has the power to change what people buy – moving away from imports to locally produced goods and services. African people want to find their own solutions and they want to ‘buy African’. However, there are many innovators who do not have access to science parks or heavily commercially-driven hubs.
In Angola, the country’s first hybrid innovation hub, Fábrica de Sabão, is just emerging in the heart of one of the largest slums. There are tremendous opportunities to tap into this segment of society to drive needs-based innovation. This model is an innovative, cultural and creative hub in the middle of Cazenga, Luanda with a special focus on stimulating local start-ups through knowledge transfer and capacity building. It’s all about preparing companies for funding/seed capital with peer-to-peer mentorship and networking. It features a co-working space, which aims to foster a collaborative culture for creative idea generation, and a makerspace that brings the informal sector to life through urban manufacturing. It also provides a cultural exchange platform, local radio station and a residence program for visiting mentors and artists.
The social entrepreneur
Drilling down on a local level is important, not just in supporting existing entrepreneurs but to help inspire the next generation. HacKIDemia is a mobile invention lab that launched in Africa in 2013, with the goal of inspiring young African makers and planting the seed of local change through social entrepreneurship and regional collaboration. Its model is unique – it recruits a local team to run hands-on workshops in local private and public schools. It is encouraging to see the concept of enterprise filter through to the education system in Africa – adding another layer to the overall innovation ecosystem.
At the same time, we have seen the ecosystem mature over recent years with the evolution of venture accelerators and hybrid incubator-accelerator hubs. Accelerators in Africa (which are often time-defined programs) are adding breadth and choice to innovators. They offer a more intensive ‘boot-camp’ approach to business development. In August 2015 the University of Nairobi launched Africa Technology & Innovation Accelerator (AfTIA) during Nairobi Innovation Week.
Places for rapid growth
AfTIA aims to accelerate market realisation for start-ups with technology solutions in finance, agriculture, education, governance and health care. Others include CTIC Dakar, which offers a suite of services including accelerator programs for ICT start-ups, enabling them to grow quickly by sharing revenues and gross margins. Kenya’s Nailab is an accelerator that offers a 3 – 6-month entrepreneurship program with a focus on growing innovative technology ideas. In Angola, Fábrica de Sabão, is also gearing towards launching its incubator and accelerator platform for Angolan entrepreneurs. So how do these hubs help the wider picture? What does the average African gain from the development of a joined-up innovation ecosystem?
Exports and global markets
Right now, intra-African exports make up only 10% of all African exports and the region is still a net importer of almost everything from food to electronics. Trade deficits are continuing to widen as African countries export less of their extractives and import more from abroad. It remains a tragedy that many African countries consume what they do not produce and produce what they do not consume; which is why it is so important for all stakeholders to forge regional relationships that have the ability to foster intra-African trade and open up African businesses to global markets. Local and national hubs are crucial – but they need to link up regionally to share information, open business opportunities and offer foreign investors a regional investment platform. This is how each and every hub can be at its most effective – and how each and every entrepreneur can be given the best chance of success.
Feature image: Matthias Ripp via Flickr.