Europe shows how Africa's tech hubs can thrive

Monday July 10 2017

By BITANGE NDEMO
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At the close of the Global Learning Conference on the Future of Learning in Berlin, we were taken around to visit start-ups within the city.

Young Germans are challenging the status quo, including pedagogical methods used in existing universities.

A start-up university is introducing practical project-based degree programmes that enable students to develop an entrepreneurial concept, work on it, and gain valuable experience.  

By the time the students are through with the programme, which has virtually integrated industry and academia, they are as good as any experienced person.

At the same time, cities in Europe have woken up to emulate the success in Silicon Valley. In Paris, billionaire businessman Xavier Niel has invested $285 million (approximately Sh30 billion) to set upStation F and hired experts from Silicon Valley to run the incubation facility. 

While launching the facility, TheNew York Times reported on June 23 that President Emmanuel Macron urged the French to make their country “the leading country for hyper-innovation.” He encouraged the crowd of entrepreneurs to “transform” and “shake up” the country. On its part, the French government committed to support entrepreneurs through a number of incentives including, making the country more business-friendly.

In what looks like a response to the new US policy of “America First,” the French government willfast-track visasfor international talent, their families, as well as entrepreneurs. In a direct effort to lure talent, the government will provide relocation grants and free office space. 

GROWING APPETITE

To stimulate the tech sector, the government created a $45 billion French Tech Acceleration Fund through the public investment Bpifrance.  In addition to these earlier funds, the Macron administration is adding another $11 billion to the fund and has identified13 citiesthat will become high tech hubs. On tax matters, the French have allowed innovative new companies tax exemptions amounting to $18 billion for 6,600 start-ups since 2004. 

Entrepreneurs need more, and President Macron in his short period in office has responded by pledging, as reported in the New York Times, “to exempt ownership of company stakes from France’s wealth tax and introduce a flat capital gains tax of 30 per cent down from as high as 50 per cent now.” 

With these incentives, global tech giants have responded. Virtually all the big tech giants including the giant French game publisher Ubisoft have committed to set up in Station F. Up to 1,000 firms are rushing to get space in the new facility innovating in a range of areas including artificial intelligence, food technologies, high-tech fabrics and many other sectors. 

The story of European start-ups is the same across capitals. New venture capitalists are emerging to support the growing appetite for entrepreneurship and they are succeeding. The United Kingdom, which was a front-runner in creating technology hubs, is reaping big returns from the sector. According to Tech Nation, a government report says that, “technology industry grew a third faster than the rest of the economy from 2010-2014. The sector now accounts for 1.56 million jobs, and generated £161bn (Sh23 trillion) in 2014.” 

HANDFUL OF GOVERNMENTS

The UK’s technology sector is perhaps second to the United States but it is slowly moving ahead by becoming one of the most influential locations. The British government has come up with tax and legal incentives and is allowing work visas for talent. There is a reasonable pool of investors, from seed to second stage funding.

Virtually every African country has some sort of tech hub (see map below) but most of these technology spaces (118 out of 173) are supported by civil society.  Only a handful of governments support this emerging tech sector. These include South Africa, Angola, Mozambique, Mauritius, Ghana, Morocco, Egypt and Senegal.

Just a few academic institutions have developed innovation hubs. According to a GSMA report, 50 per cent of the tech hubs are from 5 countries: South Africa, Kenya, Nigeria, Morocco and Egypt.

Let us face one fact, however. Inasmuch as civil society helps countries in many ways, it will never drive economic growth.  There are limits, especially when it comes to hiring talent to develop competitive products.

UNREASONABLE REQUIREMENTS

This is the realm of policy but in most countries, immigration departments are far removed from economic development. They see their role as gatekeepers and have unreasonable requirements for entry that are not in line with modern innovation landscapes.

For example, they insist on advanced degrees, arguing that non-degree holders have nothing to add to the local knowledge pool. 

Yet we are all aware that asking Mark Zuckerberg or Bill Gates for college papers in order to prove their entrepreneurial potential would make your country the laughing stock of the world. Many of the young people who drive information technologies locally and even internationally have no papers but their work is often superior. 

Perhaps we need to focus on talent and outcomes rather than papers.  Some of the Indian immigrants in Kenya may have had no college experience but their contribution to IT in this country has been immense. 

A European who had fired up several young tech enthusiasts was asked to leave Kenya because he did not have a college degree. Although I tried to intervene as a policymaker, his application was rejected. Today, the country that accepted him is laughing all the way to the bank because he has become a pillar of tech innovation in that country.

ETHIOPIA AND INDIA

Kenya was among the first countries in Africa to aggressively start building an IT ecosystem.  In fact, we were ahead of even some European countries but our cynicism, mistrustfulness, quarrelsome nature and pettiness denied our youth employment. 

Those who did not have their way as we embarked on developing the ecosystem leveraged the corruption narrative in our country to shoot down projects. Three organisations that had firmly committed to be anchor tenants with some 5,000 jobs took off to Ethiopia and India. 

The potentates of graft succeeded and celebrated as they choreographed the media to drive a wedge between the people, their pawns and the truth. The truth, as they say, will one day come out.

But we should not continue to cry over spilt milk.  We have a vibrant tech sector with a population dividend, but we lack lobbying capacity.  We must lobby our governments to emulate France, even in a small way. 

Some of what Europe is doing to attract talent and foreign direct investments does not even require money.  I am confident that there is a will in government and wherever there is a will, there is a way. 

FUTURE LABOUR NEEDS

We must never rely on donor money to develop the competitiveness of our countries.  For a start, we must extensively reform the education sector both in pedagogy and in content. 

We must create incentives for senior faculty to participate in the development of local tech start-ups and ensure that all higher education institutions countrywide become innovation hubs. 

At the same time, we must develop new degree programmes that can address future labour needs and make it mandatory for all institutions to teach creativity as well as critical thinking.

Africa can stride forward and become an innovation hotspot without relying on any outside interventions.  Innovation thrives in areas with lots of problems and no continent has more problems than Africa does. 

We must overcome our own self-doubt and learn to see prosperity in the midst of selfish propaganda that often derails impactful projects in Africa by turning them into white elephants that can be later sold for a song.     

The writer is an associate professor at University of Nairobi’s School of Business. Twitter: @bantigito