Slides from my talk at Yale University to current Fellows of the White House’s Young African Leaders Initiative.
Archives For Business
The UN Global Compact Conference, held on June 9 + 10, 2014, convened 300 public and private sector players from across the continent to facilitate knowledge sharing for local, regional and continental planning. The organizers did a great job in accomplishing something that is no small feat, bringing together U.N. agencies, NGOs and various companies from the private sector (such as consulting firms, BoP technical assistants and regional financial institutions) to discuss ways to come together to discuss the problems facing small and medium size enterprises (SMEs) in Africa.
The setting was the rather impressive: The UN Economic Council on Africa building is housed just minutes away from the Palace. The building, like much of the city of Addis, was partly under renovation, but that did nothing to take away from the feeling I had once we stepped onto the grounds: the people who worked there meant business. In fact, Addis Ababa is home to other convening bodies in Africa like The African Development Bank and the African Union. The city’s air of power, influence and rebirth is evident by the people who live and work there. And for the first time, The UN Global Compact decided to have their conference in the very place where it mattered the most: on the continent.
It was great to see so many different players committed to exploring how we can strengthen public-private partnerships. As I see it, there are two distinct challenges that have to be overcome to deepen the impact of these discussions.
The Main Challenges
First, we need to be clear about the specific ways our organizations want to support economic development, whether a company or organization has specific country, regional, or Pan-African goal they are trying to accomplish. The goals of a company like Coca-Cola has around investing in a local business will look very different than a local UNDP office trying to bring more services to local entrepreneurs. The question then to ask ourselves and our colleagues is: exactly how do we want to impact the communities we serve? Where are we lacking? How can we partner with an organization that has had success to close our gap? How can we pool resources together to accomplish a single mission?
Second, we need to have the mindset of open and inclusive knowledge sharing with local experts. To accomplish this we need to find more robust ways of working together to create environments to which foster economic growth and equitable opportunities.
Supporting Technology Hubs, Long Term
There were two panels I spoke on. The first was about strengthening public-private partnerships to support SMEs. One of my big points, was that we need a coalition of public and private supporters to pool resources to support entrepreneurship and training hubs. I am convinced this is one of the most overlooked ways to drive economic growth AND job development for youth.
What could this look like?
Think of what could be done if, similar to the Virgin Entrepreneur labs, multinationals committed $20 million USD to fund technology hubs that provide skills and training for youth? With $100,000 committed to each hub, say, in the AfriLabs Network, this could mean 3 years of organizational support for over 60 similar hubs across the continent, with $2 million to spare for a yearly convening event and small M+E team.
There are nearly 100 innovation hubs in Africa most of which are struggling to survive. I’ve spoken with many their managers who share the same concerns and struggles, lack of finance opportunities and their inability to come up with sustainable models. Their fears are often the same: “How many more months can we keep our doors open and provide consistent programming for our communities?”
If a public-private consortium came together with a larger operational grant, similar to but on a larger scale as Hivos and Indigo Trust’s recent TECH HUB INITIATIVE, we could scale up opportunities for youth to have consistent access to vibrant innovation hubs where staff salaries, internet connectivity, and space is stable.
Tech Hub sustainability will rely on committed partners, mentors and managers to determine what services they can provide their market that will add value to local businesses. This doesn’t mean renting desks or holding events. It means harnessing the power of the tech developers and organizers within the hub to provide expertise that companies are lacking. Until those gaps are filled, tech hubs will have a difficult time staying alive.
Strengthen Intellectual Property (IP) resources across the continent
For the second panel discussion, WIPO hosted a trip outside the city to the rather impressive Oromia Coffee Cooperative, where the Ethiopian organization has successfully licensed the use of coffee for the world market. As most of you may know, Ethiopia is the birthplace of coffee. The Oromia team welcomed us with a facilities tour, special coffee ceremony and presentation about the growth of the cooperative and how their model has helped increased economic growth for the region as well as health and training services for the workers (most of those in the factory were women).
The market for coffee globally is massive and it’s Ethiopia’s primary export. Ron’s team assisted the Ethiopian government in receiving a fair share of that profit, and getting fair trade coffee retailers such as Green Mountain Coffee and Starbucks to agree to paying Ethiopian exporters for these licenses. My other panelist, Ilmari Soininen from Sanaa Consulting, spoke on the importance of these type of IP initiatives in strengthening trade relations on the continent.
From a technology perspective, I spoke about registering and protecting the IP of young African entrepreneurs- something that WIPO is keen to work on in the coming years. The point here is, if technologists can’t protect their IP, then they cannot reap the type of success and growth that their American and European counterparts have.
As we concluded the conference, there was a strong feeling of commitment to work together to create the type of equitable and stable environment for economic development that other regions have enjoyed.
It’s up to us keep working to make this happen.
After five years of funding companies through partnerships like the Apps4Africa initiative (2009-2013) and our own team’s angel investing, we’ve decided to change course. While there are are more competitive funding events like A4A planned, the focus of our funding efforts has shifted over the past five years. We are still very committed to discovering, mentoring, virtually accelerating, and investing in the founders and upcoming entrepreneurs of Africa and we’ll be doing so through our fund.
Why the name change? Partly to reduce confusion. Since we launched, newer brands like Microsoft’s 4Afrika initiative and others playing on the ‘4Africa’ meme have popped up which creates a lot of confusion. This isn’t a bad thing and rarely is this kind of brand confusion intentional, but it is less than ideal.
Primarily, though, it’s because of how our fund will grow moving forward. We will continue to offer seed capital up to $25,000 for companies and grants for social ventures and non-profits. Currently we have about 19 companies in our portfolio across 16 African countries. While we won’t rule out future future competitions and hack-a-thons, they will come under a different moniker.
All our past companies are already members of this fund, so nothing changes for them. Internally, we’ve always done our deals as Appfrica, since that’s our company’s legal name in both the U.S. and Uganda. In fact, we’ve been doing deals quietly since 2008 when we made our first investments in companies coming out of Kampala at the time.
As the fund grows, we aim to do more early stage deals across more diverse countries in Arica, particularly in countries with less interest from early-stage investors. We also have plans to do follow-on financing for our existing portfolio as they grow their respective businesses.
Today’s African citizens are faced with a set of unique challenges: an unpredictable job market and poor global economic conditions. They choose to voice their opinions through social media, or more vocally in the streets. New generations of women and young people throughout Africa are emerging and developing innovative strategies to overcome daily problems at a local and national level, but their combined capacities have not been fully harnessed. And alongside this increased activism is an increased entrepreneurial spirit, a willingness to cross borders to seek opportunities, and an understanding of the increasingly interconnected world. How do today’s leaders (corporate and government) communicate with them? How can we tap the full potential of women and young people?
This panel discussion took place on May 25th in Libreville, Gabon at NY Forum Africa between Jon Gosier (Appfrica, Market Atlas), Akon (R&B Singer), Auma Obama (Writer and Activist), Maggy Berre (2CS), and moderated by Christine Kelly (CSA), Arnauld Engandji (Advisor to the H.E. President of the Gabonese Republic).
This past week I had the pleasure of speaking at the third annual New York Forum Africa in Libreville, Gabon. NY Forum is the brainchild of Richard Attias, who one of the people responsible for the annual World Economic Forum (better known to the world as Davos).
The first question everyone asks when they hear about the New York Forum Africa is why it’s called ‘The New York Forum’ if it’s a conference focused on Africa.
I can’t claim to know for sure, but there are a few things that I can say. The conference was always meant to be for the same types of people who might go to events like Davos or TED: foreign investors, banks, celebrities, media, government officials. It originally took place in New York where the name makes a lot more sense. This particular event included two sitting African presidents (Rwanda President Paul Kagame and President Ali Bongo Ondimba), three former presidents from Latin America (Former President of Peru Alejandro Toledo, Former President of Mexico Vincente Fox, and former President of Bolivia Jorge Quiroga) as well as African superstars Youssou N’Dour, Akon, and Dikembe Mutombo (pictured below).
At some point a partnership was forged with the country of Gabon to bring the event to Libreville. The benefits of having such a high profile event in Libreville is obvious: it’s a boost to tourism. it attracts investors, it encourages multinational partnerships. In other words, it puts Gabon on the map for people who tend to overlook it for better known countries on the continent like Kenya, Nigeria, South Africa, or Ghana.
This is a really smart move by Gabon’s President Ali Bongo Ondimba. By investing in partnerships like this, he’s quite literally presenting Gabon as ‘open for business’ to the very people who have the desire, positions, and capital to actually do business.
WHERE NY FORUM DIFFERS
There has been some critique of the very idea of a ‘New York Forum’ Africa. But the forum is so unique and diverse in its offerings, it’s hard not to find it compelling. In my experience doing business on the continent over the past six years conferences in Africa tend to fall under the following archetypes:
- Small local events that discuss important subject matter usually organized by NGOs, local Government or Civil Society
- Larger pan-African events that discuss the same subjects, but with participants from across the continent
- Africa industry specific events (think multinational organized banking, telecom, and mining conferences)
- Events focused on social entrepreneurship
- Events focused on tech startups
These are events are fine, and are more than exceptional for those close to the issues discussed. Most of these events are dominated by discussions around developmental aid, to the point that the conversation never moves past what I call ‘naval gazing’ at what new NGO programs are working or aren’t – while forgetting there are other things to give thought to. For instance, what do we do for the individuals living on the continent that aid has actually helped to move out of poverty and into the middle class?
But there are few, dare I say no, African events that are trying to position themselves like a World Economic Forum or TED. Both conferences are smartly composed: part entertainment, part industry insider event, part corporate retreat, and part marketing. The goal of NY Forum is to get people to come to the continent, to learn about opportunities, and the develop either a personal or professional affinity for Africa’s Markets. Why does this matter?
I think back to how important TED Africa in 2007 was for changing the awareness of African issues for some. Though I wasn’t there, it was a talk from the event that I saw by Andrew Mwenda that inspired me to invest on the continent.
Those who challenge the content of events like NY Forum Africa and TED Africa, I argue, miss the point. There have been leaders, intellectuals, and writers exploring the state of the continent for as long as Africa has existed. And for as long as they have done so, they’ve been followed by those wh know of them, but oblivious to most because they are too far removed from the problems or the solutions. So how do we get the World to care? You present the same ideas in a package they are more likely to find compelling. Conferences like TED, WEF and NYF are diplomacy in disguise. Good PR to help open people’s eyes just a little bit, and to expose Africa’s own movers and shakers to the otherwise oblivious world.
This, New York Forum Africa does better than most conferences on the continent. Hands down. While development is important, making it the complete focus of discussions on Africa isn’t progress. We know of the challenges, we’ve discussed the solutions, as Rwandan President Paul Kagame said at this year’s conference, “what matters now is implementation”.
SO, WHAT DIDN’T WORK?
The whole conference was incredibly productive and, as always, it’s the people who come, and the side-conversations that really make things worth while. Rarely is any anything said from the stage at a conference like this ground-breaking or different from what has been said before. That isn’t the point of such events. The point is is to convene the people who will actually do what Kigame alluded to: execute.
That said there was one thing about the conference that just didn’t work. ‘Taskforces’ which were held in smaller breakout rooms that were one part panel, one part workshop. Each was focused on discussion and ‘problem solving’ around topics like Improving Education, Entrepreneurship, and other matters. Around 30 minutes was reserved for the discussion, while 20 minutes or so was reserved for the workshop portion. Nothing done in 15 minutes is really going to be accomplished around such issues. Clearly not enough time.
I, as did many others judging by the side-chatter, felt these workshops were a complete waste of time. To come up with anything tangible, it would require almost an entire day or more to capture all the complexities of the issues and to explore what could be done, and that’s before coming up with an action plan. It would have been way more practical to just make these conversations more intimate discussions and skip the ‘tasking’ altogether.
The other thing that was made clear was that there were too many all-male panels. I personally thought NY Forum did a better job at not falling into this trope than other conferences on the continent. Still it’s a valid concern and one that will hopefully be addressed in the future.
A few months ago I cam across a fascinating study by Daniel Evans and Dr. Charles Thomas, two researchers at The Network Science Center at West Point. They set out to undertake one of the more ambitious studies of the business space in Africa, a network mapping study about who the key players in each market and how the influence or affect one another. Why? To quantify the entrepreneurial network in such a way that the analysis provides concrete policy recommendations.
The results tend to look something like this, where each node represents different key players or actors in the respective entrepreneurial spaces of each hub or country:
The trip was several months long, taking them to various countries and innovation hubs all over the continent and the results are fascinating. A description from the authors themselves from their first paper “Who do you know?” Developing and Analyzing Entrepreneur Networks:
Our research goal is to quantify the entrepreneurial network in such a way that the analysis provides concrete policy recommendations. Our Center has experimented with several data collection methodologies and we have developed an innovative yet simple technique that allows us to develop quantifiable entrepreneur networks. Our innovation is not to develop each individual entrepreneur’s network but to understand the entire entrepreneurial network of the community in which the entrepreneur lives and operates. In order to develop this model, we have adapted a technique used in sociology to measure social capital called the Position Generator (Lin & Dumin,1986; Lin et al, 2001). This technique circumvents the massive effort of mapping an individual’s social network before locating the social resources in it. By approaching the entrepreneur’s network through the analysis of his connections to prominent structural positions in the community or society, researchers are able to construct measures that obtain information on the strength of ties and structural holes (Lin, 2001).
Dan Evans has been doign a fantastic job blogging his research over at the WestPoint blog but gave us permission to make his work available through our open data portal, Statfrica. The first of three of their papers are now available for download here. They are:
- “Who do you know?”- Developing and Analyzing Entrepreneur Networks
- Quantifying Entrepreneurial Networks: Data Collection in Addis Ababa, Ethiopia
- Network Science Center Research Team’s Visit to Kampala, Uganda Daniel Evans and Dr. Charles Thomas
Each paper is supported by even more in-depth supplemental material at his blog. For instiance here, here, here, here, and here…there’s way to much to link to so I encourage those of you who are data-driven to dow your own digging to find out some of of their fascinating discoveries. These papers are freely available here and elsewhere but please contact the authors for citations, references, or future publishing.
We’ll post follow up research of our own based on these papers in the coming months.
For more details on these particular studies, contact: Network Science Center at West Point | http://www.netscience.usma.edu
A few weeks ago I had the pleasure of speaking at Rollins College in Winter Park, Florida about the changing business landscape of Africa the opportunities that exist on the continent. I shared about the general market trends of the African continent as well as specific examples from the tech sector, from startups to companies worth over $100 million that are still Africa based and African owned. The slides I used can be downloaded from Statfrica.com or here on Slideshare.
For those looking for information on Africa’s internet penetration, visit the deck below…
Africa’s experiencing a bit of a boom in startup activity right now. What’s driving it? Who’s helping to grow the ecosystem? This graphic explores the topic.
Infographic available from Statfrica
White lines represent the monetary support organizations like Indigo Trust and Infodev are proving to the innovation hubs of the continent which in turn support entrepreneurs with non-monetary services represented by the gray lines. Mentoring, workshops, events, conferences, investor meetings etc. are the types of things these hubs are responsible for organizing. Meanwhile, Local governments have mostly been responsible for enable policy decisions. Can they become direct financiers of entrepreneurs and/or the network of hubs? The fact that this ecosystem has emerged mostly without their intervention certainly presents that opportunity.
For a more in-depth analysis on startup entrepreneurship as a driver of economic growth in Africa download our latest report New African Business.
A portal for learning, sharing and discovering more about Africa.
Over the years we’ve collected more data about Africa than we can hope to ever use as one company. However, we know from meeting many other companies, NGOs, schools, investors and others that there is a huge amount of demand for all things Africa. The problem most of these groups have is not that they can’t find information, but that things are changing so rapidly, they can’t find up-to-date information. Usually articles are three to five years old. Its also hard to find information on topics that is immediately applicable like information on contemporary African social entrepreneurs, consumer behavior, and research around trends that haven’t quite caught the attention of corporates global research firms.
With Statfrica we’re making of our incredible amounts of research on these subjects available to all, for free!
Open Courseware, Open Research, Open Data
Perhaps the biggest opportunity though, is to change how classrooms teach Africa to students. I recently spoke at an international business school where much of the knowledge being offered about Africa was from the 80s and 90s, when the most recent text books were published. There was little information about contemporary phenomena like the growing strength of ‘south-south’ trade (from developing nation to developing nation).
The other problem we noticed was that corporations, universities, bloggers, entrepreneurs etc. were spending their time collecting the same information over-and-over again for different purposes. This is an incredible waste of time and while there are options for hiring firms to do this kind of research for you, it can be unbelievably expensive — obviously not a solution for students, smaller non-profits, or young entrepreneurs.
For professional analysts and universities, all of our material is available in a way that is modification friendly. We realized that it was rare to find files that can be completely remixed or modified so that they fit within a lesson. With Statfrica Pro, subscribers can download the raw files used to make each presentation in multiple formats (.pptx, .key, .pdf, .html, .ai, .psd). This gives you 100% control over what you use or don’t use in a classroom, boardroom, or conference presentation. There’s also a lot of supplemental material that isn’t available at the free rate.
Take an infographic like the one above and remix it completely!
Interested in a free or paid subscription? Check out pricing here.
By opening up our research repository, we hope to create a community that’s more aware of Africa, and an Africa that’s more aware of itself. In fact, we like to use the tagline “Africa’s Quantified Self”!
On July 16th, 2013 Appfrica CEO Jon Gosier had the pleasure of sharing information about the history of Appfrica and business opportunities in Africa with summer fellows at Temple University’s Urban Apps + Maps Studio.
Slides from the presentation. Business opportunities across the continent…
On Appfrica and our role…