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Information and Communication Technologies

Does social dimension beat geographic clustering in creating tech innovation ecosystems in cities?

Victor Mulas's picture
The title of this blog entry is one of the many questions we’ve been asking in our research to identify key success factors for urban tech innovation ecosystems. We wanted to better understand what causes tech innovation and entrepreneurship to grow faster in some cities, as well as explore the potential of these ecosystems for creating new sources of employment and growth.
 
Traditionally, the focus has been in clustering: building technology parks or innovation districts where companies, research and development (R&D) labs, universities and other actors were placed together in a defined geographic district or area. We have challenged this unidirectional focus and looked beyond geography to understand how connections and the social dimension of the ecosystem impacted on its growth and sustainability.
 
The answer we are getting is that the social dimension not only matters, it matters quite a big deal. The social dimension is the “glue” of the ecosystem and expands it beyond geographic boundaries of districts or technology parks. Networking assets (specific actors and events that work as social networks nodes) keep this social dimension together, being central to the ecosystem.
 
When we explored the impact of the social and the geographic dimension of tech startups in their success (in terms of capital rising), we found a positive and significant correlation for the social dimension. We did not find any correlation for geographic location.
 
These findings are not yet conclusive, but they point to one important direction: policies need to focus more on the social dimension. Ecosystems need to be understood as a community that requires active nurturing and maintenance in order to thrive and grow. The geographic dimension seems to be a tool for the development of social connections, but it does not develop these connections by itself (something else is needed). This means that the focus of policy to support the ecosystems should pay attention to the development of networking assets that kick-start communities, build networks (such as  meet-ups and mentoring) and provide platforms for community building ( such as collaboration spaces).

Mobile services: a game-changer for the greater good

Pierre Guislain's picture
Mobile services are the extension services of inclusion.  Increasingly, the world’s poor – and especially the bottom 40 percent in terms of income – are being reached via mobile devices by government agencies, development partners, banks, companies and others. 

As we extend networks, and in particular broadband, to reach more isolated populations and the bottom 40 percent, we need to foster the development of relevant content in substance (including government services) as well as form (including pictorial and video information for the illiterate).

 
Mobile-money services like M-Pesa have 
helped bring banking to millions in 
developing countries. Photo: Ventures Africa 
The private sector is the key driver of this entire change process, which government should facilitate.
 
The acceleration of technological change – with mobile is at the forefront – is leading to increased convergence between networks, devices, services and content providers. Judging from what I saw and heard during last week’s Mobile World Congress in Barcelona,  my sense is that telecommunications regulation (as  practiced today) will soon become obsolete, overshadowed by the importance of ensuring an overall balance and flexibility in this broader, converging market. 

Consequently, institutions like the World Bank will need to find better ways to ensure that key regulators talk to each other and work towards the greater public good. This includes not only telecom and competition authorities, but also broadcasting, financial services and other regulatory bodies. We should facilitate these conversations between regulators, especially in view of the fast-growing involvement of telecommunications entities in the mobile money space.

The Hype and Hustle of African Tech Startups

Maja Andjelkovic's picture



This article was originally published in
SXSWorld Magazine
 
Hardly a day goes by without an African tech startup being featured in the mainstream media. CNN regularly updates its special report on the topic; The Guardian covers local debates surrounding emerging ecosystems; The Financial Times tracks Africa’s mobile revolution; Forbes has extended its “Top 10” series to include African female tech founders; Vanity Fair pins its hopes of “continental lift” on entrepreneurs. Blogs, opinion pieces and social media cover the sector in even more granular detail. Judging by VC4Africa’s 2015 report on venture finance, perspectives on African incubation and funding models, and the entrepreneurship program announced by Nigeria’s investor and philanthropist Toni Elumelu, it would seem that the African tech sector is among today's most dynamic industries.

Amid the buzz, many investors are asking: “Is the hype warranted?”

According to VC4Africa, an online community of very-early-stage startups and investors, investments through the platform more than doubled in 2014, rising from $12 million to $26.9 million, while the average investment grew from $130,000 to more than $200,000. Their research shows that 49 percent of ventures start generating revenue in their first year and that 44 percent are successful in securing external investment. More than 75 percent of these are in the technology sector, with agriculture, health, finance and energy startups also represented.

Further along the growth path, a smaller number of startups have recently netted over $300 million from a very diverse set of investors, according to CBInsights. 



Recent Investments in African Tech Startups
Adapted from: https://www.cbinsights.com/blog/african-tech-startups
 
At least eight companies have acquired growth capital in Kenya in 2014, along others in Nigeria, Egypt, Ghana, Tanzania and South Africa and elsewhere

New early-stage funds and angel networks in or focused on Africa are also on the rise. Among others, three models stand out: London-based NewGenAngels a collaboration between African and European networks (GAIN, EBAN and AAN); Kenya’s Savannah Fund, a partnership between Erik Hersman (iHub, Ushahidi and BRCK founder), i/o Ventures, 500startups and Draper Associates L.P.; and RENEW, linking American and African investors and startups.
 
Many early stage investors are still learning from their own experiences and adjusting their strategies accordingly. For instance, while most are bullish on Kenya’s tech scene, 88mph, an African seed fund has put further investments in Kenya on hold, while pursuing opportunities in Nigeria’s booming tech sector.
 
African entrepreneurship ecosystems have also benefited from a large number of technology incubators, accelerators and coworking spaces, connected through networks such as AfriLabs and backed by private sources, such as MEST in Ghana, and public-interest projects, such as infoDev’s mLabs and mHubs.
 
According to VC4Africa, the increase of capital is driven by three key trends: growing interest in startups from the African diaspora, the rise of local angel investors, and an increase in cross-border investments.
 
All of these instigate a positive change beyond investment returns; they set in motion a chain of opportunities in emerging and frontier economies. As Stella Kariuki, founder of Zege Technologies, once told me: “I want to be the change I want to see. [. . .] We build solutions that could be global but also solve African challenges practically.” Many of the startups serve consumers at the Base of the Pyramid -- the three billion people globally who live on less than US$2.50 per day, a market that is still largely underserved when it comes to basic services such as energy, education, health and banking.
 
It seems clear that investors and startups in Africa are getting to know each other better and are making more and better matches possible. This is an important step in reducing "the missing middle”: the absence of financing beyond the earliest stages of a company’s growth. As enterprises enter national or regional markets, their capital requirements increase exponentially. Without private and public sources of investment, these requirements stifle all but the independently wealthy entrepreneurs and those with established business networks. A diverse resource base for early-stage firms democratizes the opportunity for growth-oriented entrepreneurs and increases the overall potential of the local creative class.
 
So is now a good time to invest in African technology startups? The answer is yes, as long as investment decisions are made with care, patience, and in partnership with local investment communities.
 
Maja Andjelkovic co-leads the Digital Entrepreneurship Program at infoDev, a global program in the World Bank Group that supports growth-oriented entrepreneurship in emerging and frontier markets in the tech, climate and agribusiness sectors. Maja is interested in the potential of entrepreneurship to contribute to economic, environmental and social development. She has spent over 13 years connecting these fields, including as product manager in a web startup. She is a PhD student at The University of Oxford’s Internet Institute.
 
infoDev / the World Bank Group is organizing two sessions at Startup Village at SXSW Interactive 2015; one on the dilemmas and questions surrounding investing in tech startups in emerging markets, and the other on scaling up and accelerating technology innovation in Africa.
 
Angel investors interested in forming or growing their own local networks can benefit from practical advice and templates in a guide for angel investor groups published by the World Bank’s infoDev program and the Kauffman Foundation.
 
Sean Ding, Angela Bekkers and Jeremy Bauman contributed to the article.

Categorizing the collaboration and community promotion spaces that make urban innovation ecosystems tick

Victor Mulas's picture
A variety of collaboration spaces are spreading across urban innovation ecosystems. This makes sense intuitively, because collaboration spaces create and — in some cases — manage and sustain the communities that make the ecosystem exist and grow. 
 
Collaboration space in Barcelona, Spain.
​Photo: Victor Mulas

I believe that collaboration spaces are, in fact, one of the key elements to create and grow urban innovation ecosystems in cities. Our current research in mapping urban innovation is starting to provide results that seem to validate this hypothesis. We are seeing that collaboration spaces that create and manage communities are critical nodes of city urban innovation ecosystems. 

We will share more results about this analysis in future blogs but given the relevance of these spaces, I summarized what I believe are the most relevant categories of collaboration spaces. This list, which I prepared for a paper I am working on, is not prescriptive and it is not closed by any means. To the contrary, it just presents a starting point and I welcome comments to expand and refine these categories.

How Open Data can fight poverty and boost prosperity in Kyrgyzstan

Roza Vasileva's picture
All around the world, governments are recognizing the value and potential of Open Data. This is clear from the G8’s adoption of an Open Data Charter in June 2013 (with the G20 likely to follow suit), the growing number of countries adopting Open Data initiatives, and the 64 countries that have committed to Open Government Partnership action plans (most of which focus on Open Data). Kyrgyzstan has taken the first steps down this path.
 
Bishkek, Kyrgyzstan
Photo: flickr/pjgardner

The Kyrgyz Government has been implementing the Open Government Policy and has already undertaken several measures, such as creating official web portals for state bodies including Open Budget, Electronic Procurement, Foreign Aid and many others. Through these websites, citizens can find information about public services and activities offered by government ministries and other state agencies.
 
In 2013, based on a comprehensive analysis of Kyrgyz public information resources and in consideration of plans for leveraging ICT for good governance and sustainable development, the government designed an e-Government program and corresponding Action Plan for 2014-2017 with support from the United Nations Development Programme (UNDP). This program was approved by the Kyrgyz government on November 10, 2014.
 
In addition, this year the UNDP provided support to set up an online network for the Prime Minister’s online community liaison offices. This network has 63 connection points nationwide and supplements the Kyrgyz government’s official website by strengthening relations between the government and civil society by informing citizens about ongoing reforms, as well as and challenges that have been resolved for the country’s communities and citizens. This is one of the existing examples of Kyrgyz government utilizing its openness for greater citizen engagement.

Makers and education, part one: how are disruptive technologies affecting the way we educate?

Saori Imaizumi's picture
Girls learning how to design and make a toy with a laser cutter, which increases
interest in STEM career options. Photo: Saori Imaizumi/World Bank Group

Affordable, accessible technologies can democratize opportunities for EVERYONE to become innovators and inventors. Countries can take advantage of this opportunity to create new jobs, new industry and skilled workers to achieve further economic growth and increase competitiveness. Also, preparing citizens with problem solving skills and entrepreneurial mindsets helps solve various social problems in the country in an innovative manner.
 
In a 2013 report entitled “Disruptive Technologies: Advances that will transform life, business, and the global economy,” the McKinsey Global Institute identified 12 potentially economically disruptive technologies, including mobile internet, automation of knowledge work, the Internet of Things, advanced robotics, 3D printing, and advanced materials.
 
Team-based learning through
technologies. Photo: Saori
​Imaizumi/World Bank Group

​I touched upon how these disruptive technologies and low-cost technologies affect the pedagogy of skills development and education, as well as their implications for international development in my previous blogs (New Technologies for Children Learning STEM/STEAM Subjects and the 21st Century Skills and What’s the implication of 3D printers for the World Bank’s mission?) and a feature story (Communities of "Makers" Tackle Local Problems).
 
Elaborating on these posts, I will explore the topic on “how can kids, youth and adults prepare in response to rapid technological changes” from the pedagogy and institutional model perspectives. My analysis is derived from the lively discussion that I recently attended on “Exploring 3D Printing for Development,” organized by IREX and my work at the World Bank.

Connectivity equals opportunity: PPPs narrow the "broadband gap"

Pierre Guislain's picture
A billboard announces the arrival of high-speed broadband internet
in downtown Nukua'lofa, the capital of Tonga. Photo: Tom Perry / World Bank
You don’t need to be a grandparent or even have a particularly long memory to recall a time when information and communications technology (ICT) devices were luxuries only a few could afford, if not something lifted entirely from the pages of science fiction. Reform of the ICT sector happened fast, both in broadband and mobile, and we all feel it in our personal and professional lives. The extraordinarily rapid uptake of mobile telephony in developing countries is the most compelling element of the
ICT story, but it’s only partly about the technology itself.

The real plot twist lies in why reform took off so quickly. Simply put, the incumbents did not see mobile services as threatening. Telecom companies thought of it as a fancy, add-on service that would be useful for rich people but unthreatening to the standard business model. However, the new technology was able to fill gaps in countries where there was no service at all, and it was able to make very rapid inroads. Elsewhere, people would have gone through a more traditional rollout of fixed network and then mobile; in developing countries, mobile became the main service because incumbent service was so poor. Mobile moved in because the incumbents had not done their job.

This shows that the most important element of progress in ICT is the creation of an environment where competition can flourish. Public-private partnerships (PPPs) are key players in this chapter of the ICT narrative. We see this in articles and interviews throughout Handshake, which examines PPPs in broadband and mobile/telecom (which together comprise our definition of ICT) and the services this infrastructure makes possible. In other words, we’re looking at PPPs whose infrastructure creates connections and whose services deliver connectivity.

What makes a nation smart: the view from Singapore

Yulia Danilina's picture
It is always exciting to learn from innovators. With its vibrant and competitive ICT sector, Internet penetration levels among the highest in the world and advanced ICT infrastructure, Singapore is a global information-communication hub and leader in ICT-enabled solutions.
 
The Infocomm Development Authority (IDA), together with other agencies are working towards Singapore’s vision to becoming the world’s first smart nation. That’s why World Bank Group colleagues were eager to hear from Mr. Chan Cheow Hoe – IDA’s Government Chief Information Officer (CIO) – and his team during their visit to World Bank on September 24, 2014, about their vision of a “smart nation”.
 
Mr. Chan opened the conversation by offering his understanding of the basics: what is “innovation”? Innovation, according to him, is a means to very concrete ends: solving people’s problems. When pursuing innovation in certain areas of life, we should first ask ourselves “what problems are we going to solve?” The answer to this question should guide our search for technologically enabled solutions.
 
A “smart” nation is one whose government employs innovative technologies to effectively respond to its peoples’ needs, improving their social and economic prospects. It does so inclusively, so that all sub-segments of the population benefit. This citizen-centric approach is the key to understanding governance in a smart nation; unlike business entities, the government cannot choose its customers and must serve all citizens. In doing so, the government has to deal with diverse subjects and issues, which adds complexity to the task. For this reason, the government should have a long term view and plan.   

​Smart Africa returns – with a focus on Rwanda

Samia Melhem's picture
Rwandan President Paul Kagame (center) and Minister Jean Philbert
Nsengimana (left) work with children during the recent
"Smart Rwanda Days" conference in Kigali.
“Smart” is in. So is digital. According to President Paul Kagame of Rwanda, “digital innovation has leveled the playing field, making it easy for anyone from anywhere can compete in the global economy. Today, ideas do not have borders and therefore countries cannot be landlocked.”

Earlier this month, the Government of Rwanda convened a “Smart Rwanda Days” conference, bringing together participants from seven countries. During the two-day event, attendees were asked to “take the pulse” of digital development across Africa – as well as within their own countries – and then set concrete roles and responsibilities for current members of the Smart Africa alliance (Burkina Faso, Mali, South Sudan, Rwanda, Kenya, Uganda, and Gabon). The event was co-sponsored by the International Telecommunications Union, the African Union and several private-sector companies.
  The Smart Rwanda Master Plan (SRMP), developed by the government in consultation with representatives of civil society and private sector, in February 2014, calls for better services to citizens through e-government and ICT education at all levels. The Plan includes a specific focuses on broadband networks and tertiary education, as well as fostering investments, innovation and creative local content to strengthen ICT. “Africa is on unstoppable move forward that tremendous progress is being made, but also the room for increasing speed and impact is limitless,” said Jean Philbert Nsengimana, Rwanda’s Minister for Youth and ICT.

Taking Open Data to the next level to deliver solutions for inclusive rural growth

Saki Kumagai's picture
“It is not data [that] makes you powerful; it is how you use it. That is exactly what our government has set out to do…data empowers not only the holder of it, but also the people who receive it and are empowered by using it.” – Minister KT Rama Rao
 
Over the past several years, I have attended many Open Data-related events in Washington, DC and elsewhere. But as far as I remember, no one has addressed the opportunities and potentials of Open Data for greater government accountability, citizen engagement, empowerment of the poor, and inclusive rural growth as speakers and presenters did in early September in Hyderabad, India.
 
Being transparent — through Open Data in this context — is an achievement itself. Transparency has been at the center of attention of the Open Data movement for some time. However, as many of us know, being open is a means to an end — the more important questions are what to open, as well as for what purpose, for whom and how.
 
On the morning of September 4, 2014, I was sitting in a packed conference room for a workshop with high-level government officials, members of the project implementation unit, civil society organizations, academics, IT firms, and media. We were all blown away by the opening speech delivered by the Honorable KT Rama Rao, Minister of IT and Rural Development for the Government of Telangana, one of India’s 29 states. This opening speech set the tone for the workshop on Open Data Solutions for Rural Development and Inclusive Growth.
 
KT Rama Rao at workshop on Open Data Solutions for Rural Development and Inclusive Growth


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