Editor’s note: The opinions expressed here are those of the authors. View more opinion on ScoonTV.
Poverty and unemployment are some of the major challenges on the African continent. Many solutions have been thrown at the issues with little-to-no effect. But there is new hope with the rise of tech hubs.
Africa has over 600 tech hubs. There has been a notable 40% increase from 2018 to 2019. Tech hubs are active organizations with a local physical location where they offer support and facilities for tech and digital entrepreneurs. They have several categories including incubators, accelerators, university-based innovation hubs, maker spaces, technology parks, and co-working spaces.
While many of the hubs are scattered across Africa, four major countries have the majority of tech hubs. The countries known as the innovation quadrangle are Nigeria, South Africa, Kenya, and Egypt. They account for 85, 80, 50, and 56, respectively, of all the tech hubs in Africa. The remainder of the tech hubs are in other countries including Uganda, Morocco, Tanzania, and Zanzibar.
With several tech hubs on the rise in number, what are the implications for Africa?
By 2050, it is predicted that Africa will have half of its one billion population under 25 years old. This means it has to plan for its workforce appropriately to take advantage of tech opportunities. The rise of tech hubs means there is an opportunity for training, education, upskilling, and development. This is in areas relevant to tech including developers and engineers. Organizations such as Salesforce in conjunction with their partners are already creating spaces to train youth in these areas.
Most activities in the tech industry require infrastructure, especially electricity. Africa has over 570 million people who do not have access to electricity. While this may seem daunting for a growing tech hub environment, from another perspective, it creates opportunities for alternative electricity sources. It has created opportunities for solar, hydroelectricity, and wind electricity. Solar is thriving the most since the African continent receives sunlight almost year-round in most regions.
Another important component of infrastructure for tech is internet connectivity. The fact that Africa lags behind the global average internet penetration means there is an opportunity to develop it further. Africa’s internet penetration is almost half the global average. Companies such as Liquid Telecom and MTN are making investments in fiber optics to create more internet access across Africa.
More so, the majority of small-and-medium size enterprises (also known as SMEs), which account for the majority of jobs in many African countries, do not have access to the internet. Having that access would allow them to take advantage of the ever-growing e-commerce industry in Africa. Take South Africa for example. In 2020, the e-commerce industry grew by 66%. Affordable Internet connectivity is the answer to providing access to SMEs so that they can scale their business using e-commerce.
Tech hubs have created a ripe environment for more investment. But this investment is geared toward unique solutions specific to African challenges. Some of the areas showing promise for such investments include fintech since a large portion, 57%, of the African population is unbanked. The other is the health tech niche where there is a need for more affordable health solutions and equipment. Companies such as Neopenda have invented the neoGuard that monitors vital signs in infants and other patients. Due to its affordability, this invention has been useful, especially in rural areas that lack the money to pay for high-end monitoring equipment.
The tech hub growth is also creating opportunities for partnerships and alliances. Many technology companies cannot leverage the talent and innovation in Africa by themselves, so they need to work with governments, NGOs, and local companies. This is because collaborations are vital to help foster favorable regulation, understand training needs, and figure out ways to get funding to assist tech startups and innovations. Governments and NGOs are also in many cases better equipped to understand what is on the ground compared to international companies that may want to invest in tech in Africa.
Considering all these implications, Africa still has to prepare itself regarding regulations, education, and infrastructure. Rethinking education to focus on tech can be challenging. This may be helped by creating awareness around the benefits, including poverty eradication and better standards of living. The better standards of living would not be just a result of more incomes but innovations that create access to financing for the poor and health services.
Regulation can provide incentives for tech entrepreneurs. These may include relevant protection of intellectual property, tax breaks, and funding toward tech-inclined innovations. Regulation can also provide the right environment for infrastructure developments, especially for internet, electricity, and facilities to support tech entrepreneurs.
Tech hubs are setting the stage for Africa to eradicate challenges including unemployment and poverty. With the right environment, starting with regulations, infrastructure, and education combined to support a large workforce population, Africa can become a major world center for tech innovation.
Subscribe to get early access to podcasts, events, and more!