The news, and the media more broadly, is really in the public zeitgeist right now. A lot of discussions are raging regarding its place within the political arena. This is an interesting read. It discusses the potential for a kind of entrepreneurial revival of news media.
Monthly Archives: February 2017
Young Entrepreneur Tips: Growth Hacking
After reading Patrick’s post (Cash Me Ousside), I was reminded of an article that I found about what makes someone stay on a website or make a purchase. This article is from 2016, but discusses what can make one ecommerce site more successful than others.
The bottom line is that people want to see a clean and fully functioning site before they make a purchase. If the first impression is a well-tested, bug-free website, there is a greater opportunity of sale. One of the tips mentioned that is under discussed is “Alpha/Beta Testing”. It seems shocking to me that there are still websites that go live without any sort of testing – even the video gaming community has moved to a process where products are put on the market in an “Early Access” stage to provide an opportunity for feedback.
Fighting Malaria with a Chair
I just came across this CNN article that talked about different aspects of philanthropy with Bill Gates. Interestingly, the article mentions a new malaria prevention idea that’s rooted in building furniture and making clothes out of materials soaked in mosquito repellents! I thought this was the perfect example of entrepreneurship for a cause.
http://www.cnn.com/2017/02/09/health/looking-forward-with-bill-gates/
Hamilton as an Entrepreneur?
I read an interesting passage from Ron Chernow’s 2004 biography of Alexander Hamilton. (the same book from which most of the historical content in the Lin-Manuel Miranda’s hit musical is drawn) Chapter 18 is provocatively entitled as a reference to Hamilton’s work in the Federalist No. 12, Of Avarice and Enterprise. The chapter begins with some interesting thoughts about Hamilton’s place amongst the founders, his unique contributions to American economic thought, and some historical insight into the way that entrepreneurship is perceived in America.
Chernow, citing noted historian, Gordon Wood, argues that as the unparalleled economic expert of the founding generation, Hamilton’s historical esteem has waxed and waned with the presently prevailing opinion of businessmen in America. Although Hamilton’s own beliefs, as demonstrated in his many writings on the subject of commerce, do not neatly fit into the capitalist (or any easily-classifiable) paradigm, he has largely been seen as the capitalist par excellence of the founding generation.
Both Hamilton and Franklin believed there to be something special about the American propensity for entrepreneurship. Franklin once wrote, “As to whatever may depend on enterprise, we need not fear to be outdone by any people on earth. It may almost be said that enterprise is our element.” In Hamilton’s ascent from an impoverished boyhood in the Caribbean to being one of the preeminent lawyers and statesmen of his time, we see hints of an almost cliché “American Dream” story.
Despite Hamilton’s inexorable connection to capitalism and the “rise up” (a VERY recurring phrase in Miranda’s musical) type of story that he represents, the man himself had a very strong sense of what the government’s role in maintaining a healthy economy should be. Most modern-day conservatives and capitalists would squirm at many of his policies and proposals such as his excise tax on domestically produced-whiskey, his vision for a strong central bank, his adoption policy under which states’ debts were assumed by the central government, and a variety of others.
What this passage made me wonder can be distilled into two types of questions:
1. Is there, as Franklin suggested, something inherent in the American experience that drives us to be entrepreneurs? Are our business behaviors all that different from those found in other capitalist societies? How does our entrepreneurship differ from entrepreneurship in similarly-situated post-industrial nations, such as Germany or Great Britain.
2. Is Hamilton’s waxing and waning reputation based on a false dichotomy that represents a lack of understanding of history? Is the currently- prevailing historical estimation of Hamilton at a given time based on the fact that it is merely the easiest route to classify a complex figure as standing for a “consistent” ideology that we can think about in modern terms and without thinking too hard about the complexities he presents?
MIT Enterprise Forum Pan Arab Region
The MIT Enterprise Forum provides young entrepreneurs and small business owners with an opportunity to display their projects in an annual competition and possibly receive a cash prize to help grow their businesses. Interestingly, the Forum’s Pan Arab region has been getting increasingly more applications and entries. In terms of Saudi Arabia, it seems that as the country begins to diversify its economy, its entrepreneurs are having no trouble starting things themselves. In fact six Saudi teams were made it to last year’s final round. I think this shows that what governments may sometimes perceive as problems, i.e. having to diversify the economy because oil prices are unstable, the people often times see as opportunities. It would be interesting to study whether or not entrepreneurs in other countries do fit the archetypal image of the young entrepreneur as most of these projects seem to be headed by people in their 20s or 30s.
http://saudigazette.com.sa/saudi-arabia/six-saudi-teams-mit-competition-finals/
Social Entrepreneurship in the Middle East: Old Practice, New Concept
https://ssir.org/articles/entry/social_entrepreneurship_in_the_middle_east_old_practice_new_concept
This article is very interesting in the sense that it provides concrete examples of communities in other countries taking steps for the progress of social entrepreneurship. Specifically, in the Middle East, social entrepreneurs in regional communities attempt to improve the economic and social situations of their areas that usually go against the policies and regulations of their respective governments. For example, the author mentions that the lack of an unreliable energy system from the Lebanese government spurs alternative energy social enterprises in smaller communities to create solutions that are practical to fixing the problems stemming from the government’s inattentiveness towards finding these solutions. Furthermore, another interesting point was that the author discussed that there are generally a variety of legal frameworks because of the informal nature of these organizations, which creates innovative methods for social entrepreneurs to navigate governmental regulations, find loopholes to remain “legal” in the region, and still remain beneficial to improve the quality of life in these areas.
Any thoughts?
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Africa looks to its entrepreneurs
This article also confirms some thoughts about how entrepreneurship is a necessity in some countries and the key components that when lacking becoming obstacles: http://www.un.org/africarenewal/magazine/april-2016/africa-looks-its-entrepreneurs
Africa looks to its entrepreneurs
A useful strategy in the toolbox to reduce youth unemployment
From Africa Renewal:
With a majority of African nations diversifying from traditional sources of income, entrepreneurship is increasingly seen as a key to economic growth. So far, entrepreneurship has yielded huge returns for entrepreneurs, and according to experts, there lies great untapped potential to drive the African continent into its next phase of development.
A study released in June 2015 by Approved Index, a UK-based business networking group, ranked Africa as among the top of the entrepreneurship chart. As a testimony of the continent’s rising star, the Entrepreneurship around the World report listed Uganda, Angola, Cameroon and Botswana among the top ten on the entrepreneurship list. The group sees entrepreneurship as a ‘necessity’ at a time of high employment, saying: “When unemployment is high and the economy is weaker, people are forced to start small businesses to provide for themselves and their families.”
Today, entrepreneurship is seen as one of the most sustainable job generation tools in Africa. Roselyn Vusia, a human rights advocate, points out that Uganda’s youth unemployment estimated to be 83% according to the African Development Bank’s 2014 report, is one of the highest in Africa.
Unemployment around the continent is also worrying. A 2013 study by Brookings Institution, a Washington DC-based think tank, found that African youth (15-24 years) constitute about 37% of the working age population. The same age group, however, accounts for about 60% of jobless people in Africa.
Kwame Owino of the Institute of Economic Affairs (IEA), a think tank based in Nairobi, says: “High youth population, poor policy choices and a lack of comprehensive employment plans in many African nations precipitate the high rates of unemployment.”
Ms. Vusia comments on one proactive approach: “The government of Uganda has implemented an entrepreneurship strategy that is focused on skills development, resource provision and access to markets. This seems to be bearing fruit,” she says.
The importance of entrepreneurship was underscored at the July 2015 Global Entrepreneurship Summit (GES) held in the Kenyan capital Nairobi, attended by US President Barack Obama, entrepreneurs from over 100 countries and a group of American investors, among others.
Speaking at the summit, President Obama lauded entrepreneurship for its promise for Africa with participants at the GES agreeing with him that entrepreneurship is one of the key ingredients in the toolbox to address youth unemployment in Africa, the region with the youngest population in the world.
“Entrepreneurship creates new jobs and new businesses, new ways to deliver basic services, new ways of seeing the world — it is the spark of prosperity,” Mr. Obama told the summit.
According to Evans Wadongo, listed by Forbes Africa as one of the most promising young African entrepreneurs, many African governments have not been keen on developing policies that would avert unemployment among the youth in a big way.
“Governments are not doing enough. The private sector is trying, but most goods brought into the African market are from China. This denies the youth the much needed manufacturing jobs, which are more labour intensive,” he says.
Success breeds success
Kenya’s cabinet secretary in the Ministry of Industrialization and Enterprise Development, Adan Mohammed, however, defends the policies of most African governments, saying that their efforts have been spurring confidence in the continent and are enabling more young people to turn toward entrepreneurship.
“Success breeds success — as many entrepreneurs make headway, others get on board. Also, technology-based inventions are pulling entrepreneurs,” says Mr. Mohammed. “The mindset has changed and many young people now think as employers. Many African governments have created opportunities in terms of finance and access to markets.”
Commenting on the increase in foreign investment and economic growth in Africa, Ugandan Prime Minister Ruhakana Rugunda said his government’s efforts to promote entrepreneurial culture have produced “remarkable results.” For instance, the state-run Youth Venture Capital Fund trains and provides money to young people with good business ideas. The government also
helps young entrepreneurs to market their products.
Most importantly, with youth comprising more than 75% of its population, Uganda has remodeled its education system to include entrepreneurship as one of the subjects of instruction in secondary schools and colleges. Also, with the help of the private sector and development agencies, the government has established information, communication and technology innovation hubs which help entrepreneurs to launch successful startups.
Creating an enabling environment
In Kenya, Eric Kinoti, the group managing director at Safisana Home Services, a company that provides cleaning services, hopes the government will follow Uganda’s example by creating an enabling environment to support entrepreneurship that could create jobs for youth.
“Many financial institutions in Kenya expect young people to provide collateral, yet only a few investors are ready to invest in young people’s ideas,” notes Mr. Kinoti, who mentors other young entrepreneurs and is listed among Forbes Top 30 under 30 in Africa.
Lack of access to working capital has hampered entrepreneurship in Kenya. Even though the government has created the Youth Enterprise Development Fund (YEDF) and Uwezo Fund to support youth entrepreneurship, budgetary constraints limit their impact.
“Entrepreneurship, if well managed, can create more jobs on the continent and increase the middle class which is essential in sustaining economic growth. There is need to integrate entrepreneurship training in formal education in Africa to prepare the youth for the future,” says Mr. Wadongo.
In Cameroon, Olivia Mukami, the president and founder of Harambe-Cameroon, a social entrepreneurship organization, insists that Africa needs to prioritize youth unemployment: “African countries are sitting on a powder keg and if they don’t change, it is going to explode”.
Ms. Mukami says that in addition contributing to job creation, entrepreneurship can also help the continent to solve some of the social problems that undermine progress. “I am encouraged that the government of Cameroon has prioritized entrepreneurship as a key pillar of Cameroon Vision 2035,” she said.
Andrew Wujung, a lecturer of Economics at University of Bamenda in Cameroon, attributes the country’s entrepreneurship effort to its unique poverty reduction strategy. Unlike other countries in Africa, Cameroon’s poverty alleviation strategy is linked to entrepreneurship. Moreover, the government is organizing robust skill acquisition and training programmes for entrepreneurs and making credit facility easily accessible to people with innovative technological and business ideas.
Facing challenges
For entrepreneurship to strongly impact Africa’s economy, governments must tackle some of the greatest challenges that impede its progress, including lack of funds, relevant mentorship and poor government policies. In addition, African governments should consider giving the private sector incentives through tax relief to create more jobs. Laws and regulations should favour entrepreneurs.
Mr. Mohammed says Africa is on the right path. But to reap the fruits of entrepreneurship, effective strategies and policies are required to create more employment opportunities within small and medium enterprises.
Raphael Obonyo is Africa’s representative to the World Bank’s Global Coordination Body and a Ford Foundation fellow.
Why Africa’s Young Entrepreneurs Are the Key to Diversified Growth
This article has some points that confirm some of the thoughts from our brainstorming session:
http://www.worldpoliticsreview.com/articles/20033/why-africa-s-young-entrepreneurs-are-the-key-to-diversified-growth
Why Africa’s Young Entrepreneurs Are the Key to Diversified Growth
Ernest Nti Acheampong
Tuesday, Sept. 27, 2016
NAIROBI, Kenya—When U.S. President Barack Obama attended the Global Entrepreneurship Summit in Nairobi, Kenya, in July 2015, it helped place Africa in the global limelight as an emerging entrepreneurship hub. At the event, global leaders, business executives, mentors, young entrepreneurs and high-level government officials reiterated the crucial role of entrepreneurship in economic development, creating new jobs, driving technological innovations and enhancing economic growth. Many speakers specifically called for African governments to put in place strategies to support the growth of enterprises.
Africa is already taking advantage of its youth demographic dividend to push young entrepreneurs to contribute to the continent’s economic transformation. Ghana and Kenya, which tout themselves as gateways to West Africa and East Africa respectively, have featured prominently in this trend, with youth increasingly focusing on the use of mobile technology to improve agricultural production and encourage governmental and policy support for youth-driven innovation and enterprises. But more can and must be done for African nations to diversify their economies sustainably.
As recently as two decades ago, Africa was hardly represented on the global business map due to its insignificant contribution to the global economy. All economic indicators pointed to a continent headed for a disaster. But gradually, Africa has begun to establish itself on the global stage as a hub for economic growth and business opportunities. While poverty persists in many countries, others—such as Ivory Coast, Tanzania, Senegal, Rwanda and Kenya—have undergone rapid economic transformation, inspiring great optimism and attracting investors from around the world.
The progress made in improving both international and domestic conditions has helped Africa’s collective economy grow steadily, maintaining a 5 percent average growth rate from 2001 to 2010; Ivory Coast, Tanzania and Senegal are among the top 10 fastest-growing economies in the world. In 2009, Africa’s collective GDP was estimated at $1.5 trillion, exceeding Russia’s $1.23 trillion and inching up on Brazil’s $1.6 trillion. However, since 2015, African economies have encountered significant headwinds owing to the fall in global oil and commodity prices. In 2015, the continent recorded an annual growth rate of 3 percent, down from 4.5 percent in 2014 and the lowest since 2009. The commodities slump has highlighted the perils of an unsustainable economic model reliant on the export of natural resources such as minerals, timber, oil and gas.
Mobilizing Youth for Prosperity
Despite the turbulence, the International Monetary Fund still forecasts that Africa will remain the world’s second fastest-growing economic region, after East Asia, due to investor confidence and an improved business and macroeconomic climate, among other factors. Africa’s average economic growth is expected to rise by 3.7 percent by the end of 2016 and pick up to 4.5 percent in 2017, provided that the world economy strengthens and commodity prices gradually recover.
However, the ultimate measure of growth for the African population will be reflected in priority issues such as reduced poverty, greater access to good health and education, food security and expanded job opportunities. Current indicators seem to suggest the opposite is occurring, with limited job opportunities and high youth unemployment. In most African countries, the public sector is no longer capable of absorbing the massive number of young people graduating from universities every year.
Africa’s rapidly growing population has led to a massive youth bulge, with over 40 percent of the continent under the age of 15, and 20 percent between the ages of 15 and 24. The statistics present both risks and opportunities for future prosperity. On the risk side, the high unemployment rate and limited opportunities for youth create widespread dissatisfaction and, especially in countries with limited avenues for dissent, can serve as a recipe for social unrest. Absent progress in these areas, an immense pool of talent will be left to waste, at the expense of African economies.
But on the opportunity side, if properly harnessed, Africa’s youth bulge can offer strong and energetic human capital with the potential to speed up economic growth and foster a sustainable future for the continent. Many young, dynamic Africans are highly motivated to define a better path to prosperity. They are well-connected and well-placed to create new technologies to transform Africa’s economy from resource-reliant to service-driven. There are plenty of reasons for optimism; many youth are already making their mark.
The commodities slump has highlighted the perils of an unsustainable economic model reliant on the export of natural resources such as minerals, timber, oil and gas.
Still, the growing urgency to create millions of jobs for the continent’s young population remains a serious challenge. The critical question is how can Africa develop a cadre of homegrown entrepreneurs who will establish businesses, become competitive in the global market, and foster growth in an inclusive and sustainable way? With an environment conducive to nurturing innovative ideas, developing skills and social networks, and improving access to financial capital, the youth cohort would be well-positioned to advance Africa’s economic transformation agenda. Entrepreneurship, particularly when new businesses are established and run by young people, will be a fundamental mechanism driving future prosperity across the continent.
Entrepreneurship is not a new idea in Africa. For decades, Africans have established small-scale enterprises to support their families, make a profit, and create menial jobs. From Cairo to Johannesburg and Dakar to Nairobi, young people have demonstrated their creativity and ingenuity in creating businesses and establishing small- and medium-scale enterprises. Take for example, Samuel Malinga, a 26-year-old Ugandan agricultural engineer who founded Sanitation Africa. The innovative company has developed a full-cycle sanitation system that starts with a locally manufactured low-cost hygienic modular latrine and ends with the conversion of sludge into cooking briquettes and agricultural manure. Another initiative, Tapera Bio Industries, launched by young Zambian entrepreneur Mutoba Ngoma, is involved in the production and promotion of biodiesel fuel and derivatives of vegetable oils.
Tapping into the digital revolution, young entrepreneurs are now developing a wide range of cutting-edge services and products that are transforming fields including agriculture, business, health care and transportation. These services and products address everyday issues and have improved socio-economic conditions at both local and national levels. Inspired by the need to address drought and the impact of uncertain weather conditions on farmers in Rwanda, 22-year-old Rosine Mwiseneza created the Ivomerere System, an automated irrigation system that uses sensors to detect soil moisture. Another 22-year-old Rwandan, Ange Uwambajimana, developed an Intravenous (IV) Drip Alert System, an automated tool for monitoring IV drips in hospitals.
The expansion of mobile phone connectivity is also proving to be a game changer for young entrepreneurs, facilitating the development of mobile apps and the emergence of business start-ups and tools to address pertinent societal needs, while also filling the employment gap. Africa has witnessed a tremendous rise in mobile phone usage in the past decade and a half, with approximately 70 percent of mobile users able to access internet via their phones. Between 2000 and 2010, mobile phone subscriptions grew at an average of 30 percent annually. By 2011, there were over 620 million mobile phone users in Africa, according to a survey by the Groupe Speciale Mobile Association. In the past 5 years, the annual growth rate of mobile phone use in Africa has increased by 65 percent, twice the global average. By the end of 2015, Africa recorded approximately 725 million mobile phone subscriptions with about 226 million of them smartphones.
In Ghana and Kenya, a Notable Push for Innovation
In the agricultural sector, which accounts for approximately 32 percent of GDP in Africa, new mobile applications and market information systems offer novel market tools for agro-business and so-called smart farming, which entails the application of affordable technology solutions for agriculture.
Gradually, Africa has begun to establish itself on the global stage as a hub for economic growth and business opportunities.
In Ghana, one of the most successful companies is Farmerline, a mobile-based service company that uses voice-based messaging, SMS and Android platforms to collect data, share new farming techniques, and better link smallholder farmers to other actors along the agricultural value chain. Established by a group of young Ghanaian entrepreneurs in 2013, the company provides vital market information on prices, weather and farming techniques to small-scale farmers to help them to improve productivity, adapt to climate variability, and negotiate good prices for their produce. Farmerline’s services also allow farmer-based organizations to conduct surveys to capture the impact of their interventions. Since its launch in 2013, Farmerline has successfully reached over 200,000 small-scale farmers across four African countries.
Kenya is often touted as Africa’s Silicon Valley. From mobile-payment systems to innovative agricultural information tools, Kenya is already witnessing how young entrepreneurs are transforming its economy. Within the agricultural sector, many innovative products have been developed to provide services in different agricultural subsectors including seed choice, marketing products and livestock. One of Kenya’s most recent innovations is the award-winning Pawa-Farm, an innovative Virtual Agro-weather Advisory Platform that provides timely, relevant and usable weather and climate information to farmers. Data provided by this platform includes agronomic advisories modeled in line with the projected climate conditions to enable farmers to make informed decisions and improve farm-management practices under risky weather conditions. As of April, over 5,000 Kenyan farmers had access to the platform, and Pawa-Farm has plans to scale up to reach the entire country.
It is too early to assess the impact of these technologies on agricultural productivity. But farmers are becoming more conscious of the digital revolution in agriculture and are embracing emerging innovations and technologies to access information and to make informed decisions on farm-management practices.
These are just a few examples of the nascent businesses, innovative services and new products developed by African entrepreneurs that are making a positive contribution to society and many African economies. It is encouraging that products made by young entrepreneurs have already caught the attention of both the private and public sectors. Recognizing that business innovation is central to economic growth, African governments are increasing their commitment to promoting youth entrepreneurship as manifested in the development of national entrepreneurship programs and enterprise funds.
A farmer at CCAFS climate-smart farms, Kenya, May 21, 2014 (photo by Cecilia Schubert via flickr, CC BY-NC 2.0).
The government of Ghana has prioritized entrepreneurship in its National Youth Policy as a critical part of its agenda to deal with youth unemployment. According to Ghana Statistical Service, 60 percent of unemployed Ghanaians are between the ages of 15 and 24—one of the highest rates of youth unemployment in the world. Putting this policy into action, the Ghana government transformed the National Youth Employment Program into the Ghana Youth Employment and Entrepreneurial Development Agency (GYEEDA) in 2012 to coordinate all youth employment and entrepreneurial programs. With $240 million devoted to youth initiatives by 2013, the program was the most significant public investment targeting youth development in Ghana.
Still, even with the government’s good intentions, an initial lack of legislative backing, coupled with financial malpractice and incompetence, contributed to the agency’s failure to live up to expectations. In 2013, a ministerial report on the operation of GYEEDA sanctioned by the Ghana government revealed that funds were disbursed without proper financial management and oversight, and pointed to the gross incompetency of the managerial staff, which contributed to the mismanagement of funds and accrual of debt to the program.
In its bid to right the wrongs of the previous project, Accra launched the Youth Enterprise Support initiative in 2014, designed to help young entrepreneurs and innovators turn their ideas into thriving business enterprises. Under the auspices of the president, and with support from a number of ministries and government agencies, the initiative is expected to nurture young and aspiring entrepreneurs through business clinics, mentorship and financial advice, among other opportunities. While lauding the government’s persistent support for youth development, many Ghanaians remain wary of the current program, recalling the awful experience of the past initiative. That notwithstanding, key institutions such as the World Bank, the United Nations Development Program and the International Labor Organization continue to financially support Accra’s initiatives to promote youth entrepreneurship as a critical driver for socio-economic growth and youth employment.
Recent graduates from across West Africa complete their five-week Young Africa Leadership Initiative training, Accra, Ghana, Sept. 3, 2015 (U.S. Embassy Ghana photo via flickr, CC BY-NC 2.0).
Kenya’s efforts to promote youth entrepreneurship are another useful case study. In 2005, the government established the Ministry of State for Youth Affairs, and in 2006 launched the Kenya National Youth Policy. The policy highlights five fundamental principles to promote civic and business engagement among youth: respect for cultural belief systems and ethical values; equity and accessibility; gender inclusiveness; good governance; and mainstreaming youth issues. The National Youth Policy led to the establishment of the Youth Enterprise Development Fund, which provides young entrepreneurs and start-ups with loans, facilitates marketing, and offers business-development services to youth-owned enterprises, in order to improve access to financial capital and services and ensure sustainable business models. So far, the fund has disbursed over $700 million to over 400,000 group and individual enterprises in the country. The fund has had a mixed impact on youth enterprises according to several impact assessments conducted in different parts of Kenya. In some areas, it has fueled the growth of new enterprises, due to pre-existing entrepreneurial networks and training programs. In others, however, the fund has not had a significant impact on initiatives, largely due to their low viability, lack of entrepreneurship training prior to and after loan disbursement, and poor follow-up on loan beneficiaries.
In addition to the Youth Enterprise Development Fund, the Kenyan Ministry of Devolution and Planning launched the Women Enterprise Fund, which provides access to affordable loans and credit to support women-run start-ups and expand business opportunities to create wealth and employment for women. This fund is a component of Nairobi’s Kenya Vision 2030 agenda, and part of an effort to meet the U.N. Millennium Development Goals on gender equality and women’s empowerment. So far, over 800,000 women’s groups and individuals have benefited from the fund in the form of loans. A recent assessment suggests it has had a positive impact on women’s incomes and overall household incomes, providing much-needed capital for new enterprises.
The private sector has not been left out of Africa’s push for greater youth entrepreneurship, either. Private foundations, including the African Innovation Foundation and the Bank of Africa, offer a number of awards and prizes to promote business innovation, such as the Innovation Prize for Africa, African Entrepreneurship Award, Africa Awards for Entrepreneurship and the Pan-African MTN Entrepreneurship Challenge. There are several cash prizes and invitations for business proposals directed toward young people across Africa. The African Enterprise Challenge Fund (AECF), for example, is a multimillion-dollar fund established to stimulate innovation among entrepreneurs and encourage them to find profitable ways of improving access to markets, particularly in rural areas. Since its inception in 2008, the AECF has received over 6,000 applications; a total of 218 projects have been approved for funding, and $545 million in private-sector funds have already been committed.
What Still Needs to be Done
Despite the emerging opportunities for entrepreneurship, several challenges remain. Young people in Africa are quick to highlight the lack of funds and capital for the incubation of ideas and establishment of start-ups. But as the public and private sectors pull together financial resources to support young entrepreneurs, it’s important to stress that success is a two-way street, and new businesses must do their part to stay afloat, coping with uncertainty and adapting to market dynamics. According to the Omidyar Network report, while many African entrepreneurs complain about limited financial capital, financiers and investors point out that many proposed ventures are not fundable. Indeed, many investors and financial institutions are averse to offering loans and credits to youth-led businesses because they are deemed too risky and in many cases not financially viable.
So, while access to capital is a major constraint on youth entrepreneurship, it doesn’t tell the whole story. Young Africans seeking to start new businesses lack well-tailored training, undermining their innovation potential and deterring would-be investors. And even with the spate of well-intentioned government programs and private and public funds that have been set up, many have been hit hard by corruption and poor programming and implementation.
From a government standpoint, entrepreneurship in Africa will take more than just funding. State agencies must create and support programs that provide the knowledge and skills necessary to set up a business, including financial management, risk and uncertainty analysis, and market strategy. Taking advantage of technological advances, young African entrepreneurs must establish business connections in the region and abroad, and prepare themselves to access financial services and emerging markets.
If properly harnessed, Africa’s youth bulge can offer strong and energetic human capital with the potential to speed up economic growth and foster a sustainable future for the continent. Strong mentorship has been, and will continue to be, central in boosting innovation. Well-renowned and successful entrepreneurs in Africa and around the world are providing mentorship and inspiring young entrepreneurs with their experiences in running and taking businesses to the next level. In 2011, Gallup found that 25 percent of entrepreneurs surveyed in sub-Saharan Africa who developed their own mentor plan or had access to a mentor were likely to succeed in starting a business, compared to 13 percent among those without one. But the mentorship trend is catching on across the continent; a recent EY global survey discovered that 58 percent of entrepreneurs surveyed in sub-Saharan Africa were engaged in mentoring young people, compared to 34 percent worldwide.
Africa’s future economic prosperity will rely profoundly on its young people’s capacity to innovate and translate new ideas into businesses that create jobs and wealth, and boost economic growth. Given the continent’s large youth demographic and continued population growth, as well as the declining capacity of the public sector in many African countries to create jobs, growth of the private sector will be crucial.
The call for bottom-up entrepreneurship has never been more intense than it is today. Young African entrepreneurs have already taken off, breaking barriers and vigorously dismantling forces that are impeding their growth as entrepreneurs. They are in no way waiting for government’s interventions. This is the spirit of the young African entrepreneur. While there is no “one size fits all” model for promoting entrepreneurship in Africa, some of the successful models seen in Ghana and Kenya, for example, can be beneficial guides for young and aspiring entrepreneurs.
In March 2017, African leaders will gather for the Global Entrepreneurship Congress in Johannesburg, South Africa—the first time an African country will hold the annual event. The conference will bring together entrepreneurs, investors, start-up champions, innovators, researchers and thought leaders from across the globe to help bring new ideas to life, find new ways to help start-ups grow, and scale new ventures around the world. The meeting is an important development for African countries that must take advantage of their youthful demographics and seize the opportunity to embrace and mainstream entrepreneurship into national planning. Entrepreneurship spearheaded by motivated and energetic young people in Africa has the potential to create social transformation and foster economic growth. It is time to turn that potential into reality.
Ernest Nti Acheampong is a research officer at the African Technology Policy Studies Network.
Social Entrepreneurship in the Middle East: Old Practice, New Concept
Possible link between mega successful entrepreneurs and being an introvert.
While I think the link between being a successful entrepreneur and an introvert is tenuous at best, I found this article to be really interesting.