Kenya: a startup nation?

According to President Uhuru Kenyatta, Kenya is a “startup nation”, with the government and private companies alike being called upon to make this claim a reality.

In March this year, the government even hosted the country’s first ICT Innovation Forum. Now slated to become an annual event, the forum brought together stakeholders from across the public sector, NGOs, academia, as well as local ICT entrepreneurs and innovators.

To date, says the government, there has been nothing dedicated to encouraging engagement and interaction across the span of the business and innovation ecosystem – something the Innovation Forum is to set straight.

Kenya’s Ministry of ICT, and its ICT Authority, jointly announced the launch of the Enterprise Kenya initiative – intended to improve the environment for technology entrepreneurs – in a bid to support local innovation and entrepreneurship.

Under this initiative, the government has set out a number of focal policy points to be addressed in order to create a more conducive environment for entrepreneurs; ranging from changing government procurement policies to make room for local ICT entrepreneurs, through to creating national business incubators and accelerator programmes to help the next generation of tech entrepreneurs grow. President Kenyatta has also personally encouraged action across the public and private sectors to support entrepreneurship.

Fred Matiangi, Cabinet Secretary at the Ministry of ICT, revealed in April that the president had set him the target of investing in 50 startups through the Enterprise Kenya project within a year; while in this year’s State of the Nation address, President Kenyatta said Kenya has become a “startup nation”.

Innovative hubs

Business incubators are one area in which Kenya has excelled over recent years, with hubs popping up around the country providing
entrepreneurs with the facilities, mentorship – and sometimes funding – to develop innovative new businesses.

One of these incubators, Nairobi’s Nailab, is government-funded, and recently hosted president Kenyatta during his tour of local innovation hubs. According to Nailab founder and chief
executive Sam Gichuru, past years have seen the Kenyan government progress in leaps and bounds in their support of local entrepreneurship. He says Nailab entrepreneurs have really been given a boost through the governmental recognition.

“In the last four years, we have seen massive improvement from the government in its involvement in supporting entrepreneurship through the setting up of the much-needed infrastructure,” Gichuru says.

“With the president’s recognition of the role played by Nailab in supporting entrepreneurs and the contract with ICTA, Nailab startups have gained brand equity and consequently have seen great business traction,” he says.

However, Gichuru says this is only the start, and much more needs to be done across the board at national and regional government level to support Kenyan entrepreneurs.

“A lot more can be done by the government through the county governments to ensure maximum penetration of local solutions, and also [by] inculcating a culture of buying locally produced products and services,” Gichuru says.

The Kenyan government has also been working to draw private sector players into discussions around supporting entrepreneurship. Notably, the ICT Authority recently signed a memorandum of understanding (MoU) with Microsoft, which stipulates the partners will work to get 10,000 SMEs brought online within three years, to provide 50,000 working professionals with ICT training, distribute 1.2 million devices to primary and secondary schools by 2016, and ensure 30,000 teachers receive ICT training under the “Microsoft Partners in Learning” course over the next five years. Amrote Abdella, director of startup engagement and partnerships for Africa initiatives at Microsoft, believes it is high time for government and private sector players to join forces in creating an environment conducive to entrepreneurship.

“In the past, efforts by the public and private sector have been separate when it comes to supporting SMEs. But there’s a massive opportunity to create an enabling environment for entrepreneurship to thrive in areas of skills transfer, financing, incentives and [the] tendering process that promotes small business,” Abdella says.

Specifically, Abdella envisages a type of responsibility sharing between the public and private sectors. While the government is responsible for creating a positive regulatory environment for startups and small businesses, Abdella says the private sector should take some of the responsibility for addressing infrastructural and skills-based obstacles to entrepreneurship.

“SMEs are one of Africa’s most important resources and drivers of economic growth and development. However, according to the Global Entrepreneurship Development Institute, sub-Saharan Africa is the most difficult region – globally – in which to launch a startup. The public sector plays a leading role in creating an enabling environment through policies and relevant infrastructure to ensure barriers to market entry for SMEs are reduced. The private sector – such as Microsoft – is needed to provide access to broadband, tools and resources, and SME productivity-enhancing tools,” Abdella says.

“Both parties are needed to develop a world-class skilled workforce – government needs to promote an ICT-driven economy that rest on education in 21^{st –}century skills. While the private sector needs to come together in building a talent pool for sustainable skills development in Africa. A talent pool that can manifest into jobs and innovation.”

Abdella adds that private sector players also need to focus on collaborating within the private sphere itself to create value for entrepreneurs and SMEs, and achieve potentially wide-reaching results.

“Very importantly, partnerships do not only need to be between the public and private sector, but amongst the private sector itself. Microsoft is already partnering
with other private sector companies and NGOs and has created initiatives such as the Biz4Afrika portal and BizSpark among others, through which over 220,000
SMEs have been placed online,” he said.

Challenges and resources

Former permanent secretary at Kenya’s Ministry of ICT, Bitange Ndemo, says the government has clearly understood the need of the country’s entrepreneurs for increased support, and is starting to respond to this demand.

“The government has responded to the clear desire of Kenya’s youth to engage in innovation with new policies and increased funding for research and development (R&D) as a strategy for creating jobs and supporting innovation,” Ndemo says.

However, he says despite the existence of a policy framework, a number of challenges hindering
innovation – and its potential to drive economic growth – still exist; such as the dissipation of momentum, lacking resource allocation, and “serious coordination gaps” which undermine innovation. Ndemo also says the relationships between the respective players in the industry remain disjointed, and improved communication will be necessary to see the full potential of Kenya’s governmental policies unlocked.

“The government has played an important role in creating an
effective triple helix that will eventually harmonise innovation programmes for greater economic growth, but the communication of policy to innovation actors must be enhanced.”

Across the entrepreneurship ecosystem, the same message seems to resound: the Kenyan government is making significant effort to support entrepreneurs and SMEs, but room remains for much more improvement.

“Relative to other countries in Africa, Kenya is making solid progress in innovation – but a great deal more needs to be done,” Ndemo says.