Entrepreneurship in Africa needs good data to accurately diagnose inhibiting factors and to pave the way towards ecosystems that enable and empower entrepreneurial enterprises, says Allan Gray Centre for Africa Entrepreneurship founding academic director Dr Phumlani Nkontwana.
Speaking on the first day of the Trialogue Business in Society Conference 2024, Nkontwana presented on the work of the centre and how data-driven dialogue and decision making might support entrepreneurship, an important vector for social change and economic inclusion.
He noted the importance of understanding macroeconomic contexts in order to support entrepreneurial enterprises. “You are only as strong as the strength of your ecosystem. “If your ecosystem is struggling, no matter how many support organisations you put together, they’re just not going to work. That’s the story of Africa.”
The need for better data in Africa inspires think-tank
The Stellenbosch-based centre was established in response to the need for data built on experiential entrepreneurship across the continent and with an eye to advancing entrepreneurship. Focusing on ecosystem metrics, the center moves beyond the work of existing entrepreneurial enterprise incubators and other supporting efforts, analysing available data to help diagnose issues and improve talent and culture in the entrepreneurial space.
Its research prioritises themes of talent, support, funding and policy in entrepreneurship, areas that Nkontwana defines as wicked problems for African nations. Taking a long-term approach to data, he noted that the research has revealed a significant change in the past five years.
The centre’s ambition to become a primary data source for this information has resulted in the delivery of a series of ecosystem building projects. These include the following:
- Connecten measures ten conditions that can enable productive entrepreneurship in South Africa and can be used as a framework on which to map integrated development plans.
- The African Entrepreneurial Ecosystem index (AEEI) profiles 29 African countries against core ecosystem conditions.
- Ecosystem.build.
The research serves entrepreneurship funders from philanthropies and banks to development institutes and enterprise support organisations themselves, helping these to channel money to where it might deliver the best effect.
Data dearth challenges African entrepreneurial space
The shortage of African data challenges growth in the entrepreneurial space as well as current findings. While Nigeria, Kenya, South Africa and Egypt are the top four African entrepreneurial countries based on outcomes, Nkontwana pointed out that this is not necessarily an accurate measure of their capacity to create entrepreneurs.
He highlighted the importance of being able to accurately identify the stages and progression in the entrepreneur empowerment journey. “Naming your ecosystem strategy allows you to assess where the gaps are,” he commented, explaining that factor empowered a deeper understanding of the need for different support, such as product development organisations or makers spaces.
Strategies for driving entrepreneurship in Africa
Nkontwana commented on the essential building blocks needed to support entrepreneurship and encourage venture progression. He noted that, once the macroeconomic ecosystem conditions are in place, strong entrepreneur support organisations (ESO) are required to nurture entrepreneurial enterprises. “ESOs in Africa are very young. They are start-ups themselves. That’s why we need to help them grow.”
He also spoke to the importance of collaboration. “No one has ever created entrepreneurs using a micro model, so all those who are successful are catalytic and partner with other people.”
Reflecting on the shared ecosystem challenge areas across the continent that continue to inhibit entrepreneurial success, namely governance, culture, support, finance, infrastructure, market access and human capital, Nkontwana called for a shared response to the problem. “Localised or nationalised ecosystem strategies won’t work for Africa. African needs to employ trans-local ecosystem strategies because we’ve got similar problems.”
