By Giulia Ajmone Marsan and Jonathan Potter, OECD Centre for Entrepreneurship, SMEs, Local Development and Tourism
Over the last decade, Africa has witnessed the emergence of a dynamic start-up scene in some of its countries. The district of Yaba, in Lagos, Nigeria is one example. In Yaba, young educated people are supported by a network of incubators, accelerators and other support facilities. This entrepreneurship cluster has taken advantage of the nearby presence of many Nigerian higher education institutions, such as the Yaba College of Technology, the University of Lagos, or the Federal Science and Technical College for students and facilities.
Another well-known case is the so-called Silicon Savannah in Kenya, a highly entrepreneurial eco-system that has given birth to innovative tech companies like M-Pesa, the worldwide money transfer and financing service operating via mobile phones, and Ushahidi, the well-known crowdsourcing platform. As in Nigeria, some of the universities based in Nairobi, notably the University of Nairobi and Strathmore University, are important actors in this eco-system.
In Accra, Ghana, the establishment of the Meltwater Entrepreneurial School of Technology (MEST) in 2008 boosted the start-up scene. MEST selects the best graduates in Ghana every year and provides intensive entrepreneurial training. MEST has also developed an incubator and seed funding services. Additional organisations like I-Space and ImpactHub Accra have helped develop a vibrant start-up community by offering mentoring and support services to would-be entrepreneurs as well as co-working spaces.
South Africa, one of the most innovation-intensive countries on the continent, also has – not surprisingly – a dynamic start-up scene. Even here the contribution of universities has been crucial: the Stellenbosch University near Cape Town has created an incubator for students and faculty members. Its innovation company Innovus provides funding to some start-ups. The University of Cape Town not only has an on-site incubator but also offers different programmes to train would-be entrepreneurs thanks to its Bertha Center for Social Innovation and Entrepreneurship. In Johannesburg, the Witwatersrand University has partnered with organisations in Canada and India to provide entrepreneurship support.
These examples illustrate what can be achieved when entrepreneurial training and start-up support services are provided in the right way to highly-educated graduates and researchers. As in many OECD countries, universities are key actors in national and local innovation eco-systems in Africa, including a fundamental role in providing entrepreneurial training and venture creation support to students.
However, this is still not the case in many African higher education institutions (HEIs). Moreover, despite higher education enrolment doubling since the 2000s, it still remains too low according to data from the OECD and the World Bank. The tertiary education enrolment rate in Sub-Saharan Africa was only 8.6% in 2015, compared to 70% in OECD countries. South Africa’s tertiary enrolment rate is only 19.4%. This is not only lower than the OECD area rate, but also lower than countries in other regions: the tertiary enrolment rate was 21% in South Asia in 2015 and 44% in Latin America and the Caribbean. At the same time, indicators of scientific quality as captured by bibliometric indicators such as the H-index reveal that leading African countries are still behind innovation-intensive nations in HEI research. The countries where scientific quality is the highest are South Africa, Kenya and Nigeria. However, they remain behind countries such as India or Brazil.
The OECD has been working for many years on how HEIs can promote entrepreneurship through entrepreneurship education, business start-up support for graduates and researchers, and supporting the commercialisation of HEI research. HEInnovate (www.heinnovate.eu), an initiative jointly developed by the OECD and the European Commission, is designed as one way to advance this goal. It promotes discussion and debate on the activities that HEIs can take to promote entrepreneurship and how these activities can be favoured by HEI leadership and governments. It looks at the way a HEI is governed and organised, the way it is funded, and the incentives for academics and students to engage in entrepreneurship. It analyses how the HEI prepares and supports entrepreneurs, how the HEI shares and exchanges knowledge and collaborates with the surrounding eco-systems, including the business sector, and the extent to which the HEI taps into global science and innovation networks. And it assesses what metrics can be used to measure impact. Might a tool like HEInnovate be useful for African HEIs and governments to assess where they can improve their practices for entrepreneurship education, business start-up support and knowledge exchange?
Clearly, strengthening entrepreneurship in Africa will require many combined interventions and actors to create supportive cultures and overcome a range of barriers in markets and institutions. Entrepreneurship requires a supportive legal framework, business-friendly regulations, positive social attitudes, access to markets, and access to resources such as finance and skills. In all countries, there are still many issues to resolve in these areas. Of course, actions in HEIs are not sufficient on their own to address all these issues. Moreover, entrepreneurs are needed from the whole population and not just from those who are involved in tertiary education. Finally, HEI entrepreneurship support should not be isolated from broader entrepreneurship support systems, such as the business development services offered by national and local governments and chambers of commerce, but provide connections among them. At the same time, HEIs will have a critical role to play within entrepreneurial eco-systems if they can develop appropriate strategies and practices for entrepreneurship, within supportive national higher education systems.
To read more about this topic, explore the African Economic Outlook 2017: Entrepreneurship and Industrialisation.