In the 21st century, Africa has been the fastest growing economic region in the world. Many of the reasons for this are reasons why it should continue. Capital is flowing into more diverse industries, domestic demand is surging and the working age population is the youngest in the world. Investors and experts consider Africa to be the most promising, and indeed the last sizeable emerging market. Despite this growth, countries in sub Saharan Africa lag behind the rest of the world in transferring wealth to quality of life. Complex problems persist, and many come with significant commercial opportunities.
Africa’s recent growth can be the foundation for a wave of high-growth innovation. Across sub-Saharan Africa today, innovation is rarely seen at scale, though with recent economic development the region is now showing the fastest improvement. This is beginning in East Africa in particular. In 2014, Kenya, Uganda and Rwanda were recognised as the three most innovative low-income countries in the world.
Research & Development
The problem is rooted in a historic and prevailing underinvestment in R&D. African countries spend among the lowest in the world, and the majority of what is spent goes on simply acquiring technologies developed elsewhere. This is in spite of well-established correlations between R&D investment and both start-up growth and sectoral growth. Relatively small investments at the beginning of the venture development process can deliver outsized returns.
Success in Frontier Markets
In complex frontier markets, R&D is even more important, requiring business model innovation, deep network development and cost-effective technical design. Governments, multinationals and local family conglomerates have all used their size to achieve success in these markets, but experience real challenges when it comes to innovation. Meanwhile, intrepid entrepreneurs seeking to change the game struggle against a fractured ecosystem.
VentureLabs East Africa
Transformative ventures can be built in East Africa, but it takes time to crack new combinations of technical and economic innovation. VentureLabs East Africa provides researchers, entrepreneurs, developers and investors with a field-based platform to explore and incubate ambitious venture concepts. In doing so, we aim to de-risk the development of the highest potential opportunities and create the foremost investment vehicle for East African innovation.
CleanStar Ventures is a venture development partnership that harnesses business and technology innovation in frontier markets. Founded in 2007, CleanStar has explored, incubated and launched ventures in India, Brazil and Africa using the process embedded in VentureLabs East Africa