#09 Prejudice
Geraldine de Bastion

Technology Hubs in Africa

A New Culture of Community Driven Innovation?

Prologue

"My name is Zelamen; that means forever". A slender looking boy and his two friends approach us while we are sitting in a bar in Axum. Zelalem is 14. I can tell it takes all his courage to go up and speak to the tourists who visit his town; he is a shy kid. His English is good because he still attends school. He loves playing football and surprises me by knowing more of the names of the German national players than I do. His main problem is that he has no shoes to play with. The broken plastic flip flops he wears are not fit for the playing field. The trousers I see him in every day over the following week have been patched so many times they have more holes than material left. Zelalem may not have proper shoes or trousers, but he does have a Gmail address which he proudly presents me with on a little scrap of paper. It costs money to visit the Internet café, but he asks me to write to him so he can practice his English.

Ethiopia is a country with one of the lowest Internet penetration rates in the world. Statistically less than 1% of the population has Internet access. But then statistics are about numbers and not about people. Even in the rural and remote towns, young people are connecting to the Internet. Apart from the construction sites on its outskirts, Axum is a quiet country town in northern Ethiopia. Taking a public bus over unpaved mountain roads from Axum to the next larger town takes days. The Internet has therefore become the window to the world and is worth investing in, even for a poor school boy like Zelalem.

Innovation made in Africa

A few years ago, no one would have associated sub-Saharan Africa with technological innovation. Today "Silicon Savannah" is the new buzz term for the thriving IT industry in and around Nairobi, and software "Made in Africa" is used around the globe. One example is the Ushahidi crowdmapping tool, a simple but effective tool that allows information to be crowdsourced via mobile phones and the Internet and makes mapping that information easy. The tool was created by a community of bloggers and techies in early 2008 and since then has been used for election monitoring, crisis management and other monitoring purposes around the world.

Innovation hubs – the place to be

In Kenya, much of the innovative technological development is community driven. The idea of creating a hub for the growing technology and blogger community was first born at Barcamp Nairobi 2008. It was agreed that it would be good to have a physical space to meet and work, and when Ushahidi received funding to open the iHub in 2009, the idea was put into practice. Since then the iHub has become the center of attention for technological innovation and the Kenyan start-up scene. As Eric Hersman, founder of the iHub explains, "It's where the community of web and mobile programmers connects with each other, businesses, the government and academia." (whiteafrican.com/2011/07/18/what-makes-the-ihub-work/) The iHub creates an open and collaborative working atmosphere for individuals and local start-ups. The ideals of openness and collaboration are often inbuilt in the architecture of such hubs. Instead of small office cubicals, hubs provide open working spaces that foster the concept of co-working and serve as spaces for knowledge exchange and community building. The iHub has also been an inspiration and served as a blueprint for other hubs, like ice-Addis.

Ice stands for innovation, collaboration and entrepreneurship.

Jörn Schultz is one of the founders of ice-Addis, the first Ethiopian innovation hub. "Ethiopian Universities have limited resources. However, there are a number of creative and motivated young people with project ideas. We wanted to give these people the opportunity to take initiative and work on their project ideas outside of the existing institutional structures. When we visited the iHub in Nairobi we thought, this is what we need in Addis too. And that is when we decided to found ice."

ice-addis-hub container

Ice stands for innovation, collaboration and entrepreneurship. The ice-Addis hub consists of two containers that have been refurbished as open work spaces and is situated on the campus of the architectural faculty at the University of Addis Abeba. The hub was founded in 2010. Its biggest achievements have been creating a brand and a physical space where the Ethiopian tech-community can collaborate, and networking and hosting community activities that provide an interface to the broader academic and business communities and which allow for cross-discipline interactions among individuals.

It's not just a hub; it's a movement

In the past two years more and more innovation spaces like ice-Addis and the iHub have been established. A map recreated on the Ushahidi crowdmapping platform by the Zambian Bongohive hub shows over 30 technology hubs in cities across the continent.

While all of these hubs are managed locally and based on different business models, most have a number of things in common. The most important factor is that they are community based and serve as a point of entry for people working on creative and innovative technological ideas. Hubs encourage community building by hosting regular events that range from barcamps to training events.

By doing so, technology hubs are increasingly playing a role in the development of local IT industries and thus in promoting local technical innovations and economic growth. Will Mutua is the founder of Afrinnovator, a web portal that covers African start-up and technology developments. In his recently published ebook "Innovative Africa: The new face of Africa", he covers African startup ecosystems and innovation culture. Mutua believes "these innovation hubs are especially instrumental in strengthening bottom-of-the-pyramid innovations and start-ups – these are scrappy start-ups which are at a pre-seed funding stage, where it's just a couple of people with an idea trying to come up with a prototype." (Will Mutua , p.28)

From generating good ideas to generating businesses

The world of finance is slowly beginning to take notice of these developments. Although similar in infrastructure and connectivity rates, stark regional contrasts exist among cities when it comes to access to finance. Nairobi is currently the hotspot in the region and is being flooded with venture capital and business angels looking for start-ups to invest in.

Nairobi will be the first place to experience investment bubbles

As Jonathan Kalan writes in his article "The Silicon Savannah: Of Vanity Capital and Vanity Companies" in October 2012 on the Afrinnovator website, "Investors, entrepreneurs and opportunists have descended on "Silicon Savannah." They fill the 16 (and counting) innovation hubs, tech centers, accelerators and incubators that dot Nairobi's leafier neighborhoods." He predicts Nairobi will be the first place to experience investment bubbles, since the hype surrounding the bubbling technology scene is still strong, but reality is bound to hit hard when not all the "vanity companies" turn out to be the next M-PESA.

Venture capitalists are seldom seen in other East African urban centers. Getting seed funding is nearly impossible for young start-ups in Addis Abeba, as the national banks are not willing to invest and foreign investors have not yet recognized the market potential.

The Venture Capital for Africa platform is a community network that aims to bring African entrepreneurs and foreign investors together. In a study recently conducted by VC4A, lack of access to finance was the key issue identified by entrepreneurs as currently hindering growth: "Micro credit is too small, banks are too risk averse and investors lean towards bigger deals and better returns ", explains Ben White, one of the founders of VC4A. Bridging these gaps in finance structures will be one of the key challenges in harnessing the creativity and dynamic power of the developments taking place.

Balancing the need for independence and funding

While many hubs across the continent work with aid organizations and accept some form of aid money funding, most value their independence and seek a mix of financial resources to remain autonomous. Relying fully on aid money as a funding resource is not seen as a sustainable starting point for community-driven ventures.

The two new hubs recently founded in Dar es Salaam show just how different financing models can be. TanzICT, one of the two hubs there, is financed with aid money from the Finish government and part of a broader development scheme. The second hub in the capital city, KINU, was founded in September 2012 and is one of the newest editions to the list of hubs in Africa. KINU aims to become the central space for Tanzania's tech community and was launched with grants from Google and Indigo Trust.

Although most hubs accept different forms of private-sector funding, full corporate sponsorship or relying on a single private sector investor is not an option either. Eric Hersman believes had the iHub "been named the Google iHub or the Nokia Innovation Hub" the venture would have failed. "It had to be owned by the community, and that meant name and usage both." Therefore, most hubs work with a mix of public and private funding and raise money through other activities like trainings or hosting events.

While ice-Addis is currently dependent on a few major sponsors like the German Society for International Cooperation (GIZ) and the University of Addis Abeba, as well as partners such as Google and the Center for Creative Leadership, it is hoping to finance itself through membership fees and its own activities. The hub has the same three-tier membership structure as the iHub: white, green and red members. Who pays what? How does this work exactly? Some hubs work with membership fees, while others offer free access to their members and have deals on return of investment with the startups based at their hubs. This gives the hub a share of the profits should the startup based at their hub succeed.

Innovation hubs are neither a revolutionary idea nor a panacea for economic development.

Innovation hubs are neither a revolutionary idea nor a panacea for economic development. They are a logical development and serve a real need in countries where bottom-up and community-driven creative and IT industries are emerging, but state and private sector support systems are not sufficient to foster creativity and business creation. A number of factors, such as improvements in Internet infrastructure and the spread of mobile technology, have contributed to the developments currently taking place. There is much hype about hubs at present. Innovation hubs can be most effective when they harness the idea of openness and community-driven approaches. Instead of jumping on the bandwagon of creating new spaces, international investors and development organizations should find ways to collaborate at a partnership level that makes sense for both sides.

Epilogue

Lions are a major threat to people who make their living raising livestock near Nairobi National Park. One of the young boys responsible for herding the family's cattle decided to do something about the ongoing threat. Richard Turere had noticed that lions don't attack when they see a person walking around with a flash light. The eleven year old Richard created a system of flashlight LED-torches that scare lions with a flashing light at night. Using old bulbs from broken flashlights wired to a box of switches connected to an old car battery, he created a light security system that is charged with electricity from the solar panel and battery circuit that powers the family's television set.

Since Richard invented this system, his family has experienced no attacks. Richard has been awarded a scholarship to the Brookhouse School in Nairobi, where he plans to study engineering and was invited to audition for TED@Nairobi Talent Search 2013.

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