SILICON SAVANNAH – INNOVATION ECOSYSTEMS OF AFRICA WITH A SPECIAL REGARD TO KENYA

Abstract

: In Africa, where 60% of the population is under 25 years, the enormous and diverse business environment suffers from a number of problems, ranging from access to funding to gaps in government support and weaknesses in the education system. Undoubtedly, there is the need for better governance among the continent’s nations in order to catch up and to develop creative economies with high added value products. Considering Kenya, the information and communication industry can be a breakthrough point thanks to positive, “enabler regulation” and governmental support. The authors believe that the IT sector could serve as an “escape card” from the captivity of history and geography. Astonishingly, 85% of the population is employed in agriculture while the country is called ”Silicon Savannah”. 43 financial institutions, around 1000 startups and an emerging FinTech ecosystem can be identified with several dominant Chinese and Indian corporates. Furthermore, Google, IBM and other tech multina tionals are also present. IBM opened its 12th development center in Nairobi, Kenya’s capital found in 1899 with a current population of 5.6 million. Large technology companies are promoting business and idea competitions across the continent in the field of internet and communication technologies. Since half of the 580.367 km2 country is arid or semi-arid, the Kenyan market is also interesting for foreign AgriTech companies besides the IT industry. It is indisputable that large companies cannot replace the government in creating the basis of a prosperous business environment, nonetheless they do have a beneficial effect on the building of networks and providing opportunities for ideas to emerge. Univer sities can achieve similarly positive results. The Stanford alumni network has already been successful in Africa. By the coordinated activities of former students outside California the organization creates jobs, generates revenue, and has a positive social impact. Kenya has undergone significant political, structural and economic reforms over the past decade, largely contributing to sustainable economic growth and social development. The August 2010 Constitution introduced a new system of political and economic governance that promoted a greater level of investments, strengthened accountability and the development of local public services. Forecasts for the near future show that GDP growth is expected to rise to 5.8 percentage points in 2019, supported by a boom in agriculture, a more favourable business climate and a reduction of political uncertainty. In the medium term, GDP growth is projected to 6% in 2020, depending on private sector credit growth, ongoing remittances, debt and expenditure manage ment and global oil prices. However, the main challenges are still poverty, inequality, climate change, economic exposure and vulnerability to internal and external shocks. Kenya has every chance of becoming a success story for Africa through its growing young population, dynamic private sector, highly skilled workforce, better infrastructure, new constitution and central role in East Africa. Key economic and social goals include reducing the poverty rate and inequality, improving governance, creating cohesion between market needs and educational curricula, adapting to climate change, achieving rapid and sustained growth in investment and corporate productivity.