With the fourth edition of the Innovation Prize for Africa (IPA) around the corner, I am eagerly waiting to meet the creators of the latest innovations that were shortlisted for the Award. I find myself preoccupied with a subject that both excites me and exasperates me in equal measures… building African innovation ecosystems.
As an optimist, I can see these ecosystems playing out beautifully in my head. I see African nations as innovation economies where knowledge and creation are seamlessly transformed into products, processes and services that fuel economic growth, create employment and wealth, and raise the living standards for all Africans. This vision never ceases to excite me… until reality kicks in.
I am then forced to acknowledge that the seamless picture in my mind has some way to go before it can be fully realized. Not because Africans lack innovative ideas, but because many crucial pieces of the puzzle are still missing – they either haven’t yet been conceived into existence or they exist but haven’t understood that they form part of the great African innovation ecosystem puzzle.
An innovation ecosystem, like any other ecosystem, is a living, functioning, ever-evolving mechanism that supports the continuous creation of new products and services to meet evolving market needs. It consists of multiple participants, resources and recipients who each have a role to play in perpetuating this environment of co-creation.
Africa needs to create parallel ecosystems that can support wider innovation
Since innovation rarely succeeds in isolation, innovation ecosystems must be aligned with business and education ecosystems that can support and perpetuate parallel innovation. So this means that for an innovation ecosystem to function, its players must include innovators, entrepreneurs, researchers, academia, venture capitalists, investors, as well as training consultants, legal consultants, business and professional development experts, and marketing gurus amongst others. All of this needs to be underpinned by strong government policies, ethical practices and African cultural understanding.
The source of my exasperation is exactly this. Africa’s innovators and social entrepreneurs are rearing to go, their ingenious innovations address African-specific challenges, and often also have important global relevance. Where we fall short however is the lack of research to back up these innovations, expertise to promote knowledge transfer and funding to upscale innovative ideas into full-fledged commercialized products and services. It’s not that we don’t have these variables in place, it’s just that they don’t sync up at present.
So how can we create these synergies that will pave the way for African innovation ecosystems to thrive? I believe the answer lies in a comprehensive shift of mindset. It simply cannot be limited to a few visionary players collaborating beyond sectors or cluster borders. This got me thinking – what will it take for African nations…I mean whole nations…to reconfigure themselves to operate as cohesive innovation ecosystems?
Being an idealist, I believe that this is perfectly doable. After all, most African economies are still young enough to manage this radical shift of mindset. It is possible to reinvent the wheel and create ecosystem models that suit African needs rather than follow existing models. There is a fundamental need to shift our collective thinking in this direction and it all comes down to one core reason – job creation!
We all know this already but let’s look at it again. The Washington Post did a great job crunching United Nations data to provide this stark picture of Africa’s population growth and its social, economic and political implications. The continent’s overall population is expected to more than quadruple in 90 years or so. It will have four times the workforce, four times the resource burden, and four times as many voters. In fact, Africa will be almost as populous as Asia by 2100. This population explosion, with a dramatic youth bulge thrown into the mix will be most prominent across sub Saharan Africa, and will likely transform political and social dynamics within African countries and impact their relationship with the rest of the world. Unless properly managed through good governance and careful resource management, it could threaten the peace and stability that has just come to so many parts of Africa.
Africa needs job and it needs them fast
Africa is the world’s second fastest growing region. According to McKinsey’s 2012 “Africa at work: Job creation and inclusive growth” report, poverty is falling, and around 90 million of its households have joined the world’s consuming classes—an increase of 31 million in just over a decade. Their data indicates that the continent must create wage-paying jobs more quickly to sustain these developments and ensure that growth benefits the majority of its people.
The data suggests that in the past decade, 37 million new and stable wage-paying jobs were created yet some 63 percent of the total labor force is still engaged in some form of self-employment or “vulnerable” employment, such as subsistence farming or urban street hawking. In the next 10 years, 122 million Africans will enter into the labor force. Some 54 million stable wage-paying jobs will be created by 2020 (with a potential to reach 72million), with much of the job growth coming from manufacturing, agriculture, and retail and hospitality. Construction, transport and communication and financial services also have the potential to expand wage employment but this will not be enough to absorb these new entrants. The pace of wage-paying job creation has to be accelerated.
The good news is that by 2020, there will be 3 billion new Internet users, most of which will come from emerging markets. A large chunk will no doubt come from the African continent. Here’s why. In Q2 of 2014, the continent had 297,885,898 internet users according to Internetworldstats.com. The continent has recently seen major infrastructure sharing initiatives aimed at cutting down the costs of providing mobile voice services, increasing internet access, and reducing mobile telephony costs for end-users. The outcome of this will be the cost effective expansion of services into underserved rural communities.
Today international bandwidth and data networks have become more widely available in Africa and data-enabled devices are becoming more affordable as a result of competition, technological developments and economies of scale in the device business. According to telco analysts from Informa Telecoms & Media, the number of smartphone connections in Africa will rise from about 79 million at end 2012 to 412 million by 2018, spurred largely by the arrival of low cost smartphones.
Increased data access is transforming the kind of jobs needed in Africa
These trends in increased data access will naturally increase the demand for innovation-based jobs. Take the ICT sector for example. According to a report by the World Bank, the African Development Bank, and the African Union, the ICT market in Africa is projected to be worth $150 billion by 2016. This sector has driven up to 40% of the economic growth in East Africa in the past 10 years. In Kenya alone, the IT industry is expected to grow by 11% annually, creating a need for highly-skilled professionals capable of driving IT innovation and entrepreneurship.
Perhaps the most transformative impact of increased mobile and internet access stands to be seen in agricultural sector, which incidentally has the highest potential to realize gains in growth and to create employment for young people. Access to data will allow for radical transformation of Africa’s agricultural sector as rural farming communities begin to access the many agricultural innovations that are being developed by African innovators today. As outlined by the International Food Policy Research Institute (IFPRI), higher-valued agriculture will use services more intensively, creating employment opportunities. Demand for transport, plant protection, veterinary services, mechanized field operations, and advice can be met by young people with skills and enough capital (or leased machinery) to start small businesses. They maybe part-time farmers, with small allotments of land and enough capital and skills to establish themselves as sellers of services.
Innovation ecosystems drive economic opportunity and equalize wealth distribution
Herein lies the importance of creating innovation ecosystems that are a hybrid of education and business ecosystems as well. Knowledge and innovation are key to unlocking growth opportunities in Africa, and so we need to start creating these innovation ecosystems. Africa needs to, as a matter of priority, start educating, training and mentoring African youth and its rural communities to adapt to and even create the kind of jobs that these key sectors will be demanded of them…otherwise these jobs will go to outsiders, an Africans will continue to be excluded.
It’s probably worth pointing out that innovation is likely to displace many existing jobs, but in doing so it also creates new jobs. If these new jobs translate to higher quality, wage paying jobs for young Africans, who represent the future, then we need to pave the way for it to happen.
Governance, strategy and leadership will pay a central role in building Africa’s innovation ecosystems. If African leaders start taking concrete steps to regulate key areas such as technology transfer, intellectual property rights and data management, as well as increase efforts in education and training, they will be taking important steps towards creating innovation ecosystems. Access to financing, venture capital and partnerships will increase with improved regulation. The pieces of the puzzle will start coming together, laying the path for Africa to become a great innovation-led continent that drives economic opportunity for its people, both urban and rural.
Innovation thrives when people are connected, and when they are connected ecosystems are born. By supporting innovation ecosystems, we collectively contribute to building African innovation economies. I believe it’s achievable (and I’d go as far as to say in the very near future), if African leaders, business communities and investors can take a step back, observe the strengths and gaps particular to their nation or region, and then accordingly mobilize knowledge, expertise and funds where required.
Reassuringly, many African nations such as Kenya, South Africa, Nigeria and even smaller islands nations like Cape Verde are focused on becoming important ICT hubs with broader mandates that encompass business, capacity building and innovation. To me, it’s an indication that these nations will eventually operate as cohesive innovation ecosystems if they remain focused on those mandates. But what will it take for the rest of sub-Saharan African nations to make the shift?
By Jean Claude Bastos de Morais, Founder of African Innovation Foundation