By Brian Laung Aoaeh July 23, 2012 2 Comments

How To Make Africa More Innovative and Entrepreneurial – Part IV – Connecting The Dots and Tying Up Some Loose Ends[i]

 

We started our conversation on how to make Africa more innovative and entrepreneurial three articles ago. If this is your first encounter with our discussion you may get caught up by reading part I, part II, and part III. Today we will wrap up by connecting a few dots and tying up some loose ends. Hopefully when all is said and done we would have raised more questions than any one person can answer.

 

First, it is not uncommon to find that a “grand vision” lies at the genesis of successful efforts to create innovation clusters that are now the envy of the world. For example:

  • Bangalore became a reality in the 1890s when J.R.N. Tata donated money and the maharaja of Mysore donated land in order to realize their dream of building a “science city” to jump start India’s modernization. Today the Indian Institute of Science (IISc) is one of the world’s greatest centers of science and technology education[ii] and the Tata Group “operates in more than 80 countries and markets across Africa, Asia, Australia, North America, South America and Europe.” Tata Group has business sectors in information technology and communications, engineering products and services, materials, services, consumer products, chemicals and international operations.
  • Stanford University, the corner stone of Silicon Valley was formed in 1891 when Leland and Jane Stanford founded the university in honor of their son who had died shortly before his 16th birthday. Leland Stanford was a Governor and Senator of California, and had amassed his wealth as a leading railroad tycoon. At its opening, founding President David Starr Jordan said to the pioneering class of matriculating students: “[Stanford] is hallowed by no traditions; it is hampered by none. Its finger posts all point forward.”[iii]

 

Second, it is no coincidence that the Global Innovation Index 2012 (GII 2012)[iv] focuses on education as a bulwark in efforts to boost innovation. A casual inspection shows that the countries that ranked high in the GII also tend to perform well on the OECD’s Program for International Student Assessment (PISA)[v].

 

PISA assesses how far students near the end of compulsory education have acquired some of the knowledge and skills that are essential for full participation in society. In all cycles, the domains of reading, mathematical and scientific literacy are covered not merely in terms of mastery of the school curriculum, but in terms of important knowledge and skills needed in adult life.

 

In the PISA 2003 cycle, an additional domain of problem solving was introduced to continue the examination of cross-curriculum competencies[vi].

 

For example:

  • Korea, Finland, Hong Kong, Singapore, Norway, Switzerland, the United States, Sweden, and Germany all perform very well in the PISA assessment and also rank very high in the GII analysis.
  • A high ranking in the PISA analysis does not automatically translate into an “enviable placement” on the GII – Shanghai-China sits at the very top of the PISA rankings, yet China comes in at number 34 in the GII rankings. One reason for this might be an existence of wide disparities in the quality of education across mainland China. I should point out that China’s GII placement in 2012 compares to its ranking of 29 in the GII 2011 report.

 

Tunisia is the only African country whose participation is reflected in the PISA 2009 database. It comes in at number 59 on the GII 2012 index and is not very far from the bottom in the PISA analysis.

 

Lastly, the issue of trust between government agencies, universities, nongovernmental or nonprofit organizations, and businesses cannot be downplayed.  On this front, Transparency International’s Global Corruption Barometer 2010/11 (GCB) data[vii] gives one pause. Among other things, the survey asked respondents how the level of corruption has changed over a three-year period preceding the administration of the survey. These are the results;

  • Kenya: 39% of respondents to the survey said corruption has increased in the past 3 years.
  • Other African countries I looked up in relation to that question include Ghana – 60%, South Africa – 62%, Nigeria – 73%, Uganda – 67%, Rwanda – 21%, Cameroun – 62%, and Ethiopia – 34%.
  • Interestingly I did not find Botswana in the database.
  • Transparency International’s Corruption Perceptions Index 2011 (CPI) ranks these countries out of 183 as follows: Kenya – 154, Ghana – 69, South Africa – 64, Nigeria – 143, Uganda – 143, Rwanda – 49, Cameroun – 134, and Ethiopia – 120. Botswana has the best performance with relation to CPI.
  • For comparison the GCB and CPI data is: 64% and 73 respectively for Brazil, 53% and 143 respectively for Russia, 74% and 95 respectively for India, and 46% and 75 for China.
  • May be it is not a coincidence that Kenya leads the continent as a hub for information and communication technology (ICT) innovation. It may also not be an accident that Botswana’s economy has fared as well as it has over the recent past in comparison to Nigeria, for example.

 

Rampant and institutionalized corruption and lack of transparency impedes the proper functioning of financial and labor markets, interferes with the functioning of the legal system in fairly and impartially adjudicating disagreements between entities participating in the innovation and entrepreneurship ecosystem, and prevents the establishment and respect of intellectual and physical property rights.  Moreover, corruption drives a lot of activity into the shadow economy – a state of affairs that does not promote widespread development. As an example, imagine personnel for national water or electric utilities agreeing to accept bribes while utility bills remain unpaid by large segments of the utilities’ customers for months, even years.  It does not take an enlightened mind to extrapolate the unfortunate effects such behavior will have on the ability of the utilities in this example to continue providing the service for which they were established.

 

However, as with everything about Africa I cannot help but admire the resilience, ingenuity, energy and eternal optimism shared by the people confronting what many would consider daunting odds.

 

Consider that:

  • Network organizations like AfriLabs are forming all around the continent to promote the work of technologists and software engineers in developing startups to solve problems and create wealth for risk taking entrepreneurs.
  •  Programs like that organized by the Mo Ibrahim Foundation and the Tony Elumelu Foundation are aimed at developing a new cadre of political and business leaders aimed at spearheading the sort of grand visions that can flame the fires of development and modernization across the continent[viii].
  • Programs like the Innovation Prize for Africa and others on a smaller scale encourage innovation that develops new products, increases efficiency, or saves costs in the African context.
  • Though there remains a lot of work to be done, investor interest in Africa is increasing[ix]. Africans returning home after completing academic study and acquiring professional experience abroad drive some of this investor activity.

 

There are many more examples of that nature. Moreover, I cannot enumerate all the instances of individuals abroad investing in, and collaborating with, relatives and friends at home to start various entrepreneurial projects while also providing seed funding and advice.

One could reasonably argue that taken in isolation, none of the activities I have described above will amount to much. Taken in sum, they paint a picture of hope. Will this hope prove to be merely a mirage, or will partnerships develop that transform that hope into a tangible reality?

 

What do you think? What can you do to ensure this is no mirage?

Let’s talk again. In fact, let’s talk again right now. On deck? I have a co-author to help me tackle the next topic: How Can Africa’s Governments Harness Mobile Technology to Engage Rural Parents in the Continent’s Drive to Improve Educational Outcomes?



[i] Any mistakes in quoting from my sources are entirely mine.

[ii] How To Make A Region Innovative by Ernest J. Wilson III, Strategy+Business, Issue 66 Spring 2012 accessed at www.strategy-business.com on 21 July 2012.

[iii] Stanford University Wikipedia page, accessed on 21 July 2012.

[iv] Global Innovation Index 2012 accessed online on 21 July 2012.

[v] OECD PISA 2009 Database accessed online on 21 July 2012.

[vi] From www.oecd.org accessed online on 21 July 2012.

[vii] Transparency International, Global Corruption Barometer 2010/11 accessed on 21 July 2012.

[viii] Ben Schiller, Are MBAs The Solution To Africa’s Problems?, www.fastcoexist.com accessed on 21 July 2012.

[ix] Chris Tredger, Global VCs Throw Their Weight Behind African Startups, IT News Africa, 20 July 2012. Accessed on 21 July 2012.

About

Brian Laung Aoaeh is a partner at KEC Ventures. Before KEC Ventures he worked at Watson Wyatt, UBS AG and Lehman Brothers respectively. He holds a BA with a double major in Mathematics and Physics from Connecticut College, and an MBA from New York University's Leonard N. Stern School of Business. He is presently a participant in the CFA Program.

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