Enhancing competition for innovation in a global marketplace – a view from Tanzania
As the Human Development Innovation Fund’s third application window enters the final month, Team Leader David B. McGinty reflects on the building blocks of innovation in the developing world
If you want to read a compelling story about competition and innovation ecosystem building, go no further than exploring the story about how Silicon Valley beat Boston to be the United States’ main innovation powerhouse. Both areas have stellar academic institutions, significant access to top talent, a long history of government-supported research and innovation (including through the Department of Defense), strong infrastructure, and compelling urban environments. However, differences from policy to culture to industry focus to how social networks are built, paved the way to today’s reality. A quick summary of this story (from a venture capital standpoint) is in Anil Gupta and Haiyan Wang’s The Reason Silicon Valley Beat Out Boston for VC Dominance, in the Harvard Business Review.
Through the Human Development Innovation Fund (HDIF), Palladium is working to proactively influence some of the issues by asking: how can Tanzania become an attractive and vibrant environment for innovation and technology, working in competition with other global marketplaces? Tanzania’s rank in the Global Innovation Index has climbed 27 positions from 123 in 2013 to 96 in 2017. While this progress is commendable and encouraging, global competitiveness and local realities mean that specific actions are needed to raise the profile and potential for innovation in developing countries like Tanzania.
Creating an innovation ecosystem requires the right people and networks
Paul Graham, co-founder of Y Combinator, made a very clear assertion: to create another Silicon Valley a city needs rich people and nerds! This was his distillation of the ingredients he views as critical to building an ecosystem that continually produces scaling start-ups: universities, personality, nerds, youth, time, competition, and no bureaucrats. On the Palladium blog, LinkedIn and Disrupt Africa, I’ve recently discussed some of the technical background, approaches, and learning required when building effective innovation ecosystems in East Africa; and, specifically, how HDIF is tackling these challenges through the cultivation of specific networks.
One major network accelerator in Tanzania is the annual HDIF-hosted Innovation Week. In May this year, 18 events took place during Innovation Week with 15 partners and 1,054 participants (55% of whom were female). Events in research, technology, creativity, development, and entrepreneurship were designed to inspire the next generation of Tanzanian innovators. Innovation Week provides a targeted networking and learning opportunity for innovators.
One of my favourite events was created and hosted by She Codes for Change, which focused on empowering secondary school girls by teaching them how to use stop motion animation to tell their stories. The girl’s learned about different technology hardware, applications, and storytelling processes to explore struggles in their lives and develop videos to inspire other girls to solve problems. The results were powerful.
In another event, Tanzanian media powerhouse Clouds Media Group gathered youth for a full day of peer networking, discussions with experienced entrepreneurs, and skills workshops on how to take the next step in becoming a socially conscious entrepreneur.
Finally, Shule Direct hosted female university students and young professionals to directly link them with successful, female mentors. They shared stories and experiences about starting their social enterprises and the challenges faced by women in starting and growing a business or non-profit organisation.
Networks provide a foundation for funding
Interpreting Gupta and Wang’s analysis, a city or region with a cross-industry scope that has a dynamic cluster of successful “entrepreneurs and executives who were ready to start, join, invest in, or otherwise help other new ventures” will foster a strong capital market.
To link the ideas and entrepreneurs with funding, entrepreneurs and their networks must be made visible and actively marketed to potential investors and funders. In Tanzania, this year HDIF launched an online innovation ecosystem map. Through this open platform, individuals with ideas, funders with cash and mentorship, and innovators needing partners, can all quickly learn and link up without contending with physical or network barriers. Going online, any user can drill down by categories (including region, sector, and organisation type) to find new partners or learn more about the innovation ecosystem. A full ecosystem report will be released in the coming months.
Funding must follow theory
At Palladium, we believe it is essential that Positive Impact solutions create both social and economic value. Investing in innovations related to specific social problems – such as in the areas of health, education, water, sanitation, or the environment – can identify solutions with the potential to help economies build job-ready skills, create new jobs, and grow overall domestic production.
To maximise the momentum created by Tanzania’s Global Innovation Index progress and our own assessment of significant growth in Tanzania’s innovation ecosystem, HDIF has opened a third funding round. We are seeking applications from the next generation of innovators in Tanzania. The focus of this round of funding is four specific development challenges requiring significant innovation.
Join Palladium and the HDIF team as we seek to accelerate Positive Impact in Tanzania and beyond through innovation and technology. Consider applying and join us next year for Innovation Week 2018. More details can be found at www.hdif-tz.org.