Four things Africa has to get right to guarantee future innovation

Fail to innovate and you will simply be left behind. As I previously noted, this is especially the case for the African continent. Africa has, for the longest time, been relegated to the back of the classroom, the backward, war-torn, black sheep of the world. But today it is emerging, and African nations are betting big on technology and innovation as the stepping-stones to rebuilding themselves.

But what will it take? What are some of the components that are necessary for African states to innovate into the future?

1. People and Skills: The engine of innovation
In his article examining the Kenya ICT board’s recently released Julisha Report, Mbwana Alliy makes the assertion that there should be very deliberate measures to build human capital:

The conclusion by many is that a skills gap is emerging given both the trends and the current supply of talent locked up in traditional ICT industries. What makes Silicon Valley what it is, is the continuous learning that occurs among the talent that moves into new jobs and new technologies.

The simple fact is that technology is a highly dynamic field. Things change a lot and they change fast! Some of the concepts that came into play a year or so ago have either been subsumed by new knowledge in that area or at least had developments to the underlying principles. If technical knowledge changes so rapidly, it means that an undergraduate student getting into a technology-related field of study will most likely be lacking in relevant knowledge upon graduation if their university is stuck teaching outdated concepts or is not closely relating with what’s going on in industry.

Therefore, there needs to be a move to strengthen technology curricula and also increase links between academic institutions and the real world of innovation — the startups and companies that are innovating.

One final point for Government officials and International Development professionals reading this — you may want to allocate more of that lavish tech park money to skills development — it will build valuable human capital to support the industry and hence economic growth. – Mbwana Alliy

2. Policy and Regulation: The environment of innovation
The policy and regulatory environment in any country can mean the difference between a caged, walled-off, restrictive and prison-like environment that does not make it easy for innovators to get creative and offer new products and services; or an open playing field.

Regulation is really a bit like the Goldilocks fairy tale — too much of it will stifle innovation and cause stagnation, and too little of it may leave consumers vulnerable and unprotected. There needs to be just the right amount of it if the right kind of enabling environment for innovation is to be achieved. The right regulatory and policy environment for innovators could mean the difference between an imprisoning, jail-house experience, or a fun play yard experience that supports invention and creativity.

In the case of mobile money, for example, as the GSMA notes, “Regulation continues to be the most complicated issue for mobile operators wanting to be involved in mobile money”. According to a paper titled “Mobile Payments go viral: MPesa in Kenya“, one of the contributing factors to the success of MPesa and mobile money in Kenya in general was the existence of a supportive regulator:

Regulation of mobile money can help to secure trust in new mobile money schemes. At the same time,regulation may constrain the success of a mobile money deployment by limiting the scheme operator’s degrees of freedom in structuring the business model, service proposition, and distribution channels. In the case of MPesa, Safaricom had a good working relationship with the Central Bank of Kenya (CBK)and was given regulatory space to design MPesa in a manner that fit its market.

The CBK and Safaricom worked out a model that provided sufficient prudential comfort to the CBK. The CBK insisted that all customer funds be deposited in a regulated financial institution, and reviewed the security features of the technology platform. In turn, the CBK allowed Safaricom to operate MPesa as a payments system, outside the provisions of the banking law.

3. Funding: The fuel of innovation
Two years back, getting financial support for your tech innovation was not very easy. Thankfully, things are different today. Looking at the case of Kenya, for example, it is definitely much easier to get funding at the seed level now than it has ever been. From pitch contests such as Pivot25 and IPO48 that have led to the development of businesses out of ideas such as M-Farm and MedAfrica, to fully fledged VC style funding such as eVentures Africa and other similar investment funds, there is now more funding available and it is more accessible.

All the same, there’s still a lot of room for more. As Erik Hersman notes, we need more investors pouring seed funding at the bottom of the pyramid:

To make the tip of the pyramid bigger, to have more success stories in the tech space, there is only one option: you have to make the base of the pyramid broader… Invest seed funds into local tech entrepreneurs.

Mbwana’s article “Innovation funding in Africa: Are VCs and Impact investors taking enough risks?” makes much the same point:

[There is still] a significant gap for early stage investing in web and mobile startups that constrains potential innovation. – Mbwana Alliy

The future does look bright though — such indications as crowd-funding platform, GrowVC making it’s initial forays into Africa are an indication that not only are investors looking at Africa, but they are finding something to invest in.

4. Startup Culture: The glue of innovation
Once you’ve got all these components: the engine (people and skills), the environment (policy and regulation), and the fuel (funding) of innovation, the glue (that is the startup culture) is what pulls everything together. Without a supporting culture that encourages people to innovate, invent and keep at it despite failures, all you have is an empty shell.

The startup culture is really a culture that is characterised largely by experimentation, something that is contrary to the sometimes prevalent status quo culture of security and finding a nice job, keeping it cool and not rocking the boat.

This is where tech hubs, for example, are making a big difference. They are bringing together dynamic, passionate people, and giving them the right environment to do what they do best – ideate, create, disrupt.

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