By Yariv Cohen, Founding Partner at Angaza Capital. Published on The New Times
In the past few months, I have written on several occasions that Africa is in the midst of a revolution, on the way to becoming a global leader of entrepreneurship and innovation. I discussed this in meetings and conferences around the world, with various entities, yet, in too many cases, people respond very skeptically.
The skeptics are ignoring the vast amount of data showing Africa’s growing position in the global arena. The steadily growing number of local startups, the amount of capital invested in them, the number of developers and engineers throughout the continent, the entry of global corporations to the continent, and much more - all demonstrate time and time again the huge potential for development, a potential that alongside smart investment and assistance, can and already is transforming the field of entrepreneurship, establishing it as a major growth engine of the African economy.
But despite all the numbers, many remain skeptical. Unfortunately, it is not just Western businessmen who fail to see the huge potential in Africa; Many of the continent’s residents still find it hard to believe in the vision that their homelands are becoming global innovation centers. Maybe the next figure will convince them, too.
9 of the top 10 in the world
Despite the impressive data mentioned above, there are much more substantiated efforts and measures that need to be taken to establish a new reality of innovation throughout the continent. In order for Africa to realize the vision of becoming a global capital of innovation and entrepreneurship, there is a great need for programmers and engineers, for a large number of startups (the more there are, the greater the chances of success), for capital invested in these young companies allowing them to grow and develop, and so on. These are processes that support the chances of success. But for all this to have a runway, there is a need for something much more fundamental and rare: an entrepreneurial mindset.
It is difficult to define what the entrepreneurial mindset is, but some of the key elements are agreed upon by various experts and entities. The ability to think outside the box, see a problem and imagine different solutions, the willingness to work hard and sacrifice, and also the willingness to take the risk, knowing that failure is a possibility; all of these (and more) make up a mindset, without which you can’t even talk about entrepreneurship as a possibility for growth. But while defining the entrepreneurial mindset is problematic, its measurement is much simpler, and presents unequivocal results.
The main reason for optimism
The simplest way to look at the entrepreneurial mindset of a society is to look at the percentage of the population who are in the process of starting a new business or running a business that they previously set up themselves. According to The Economist’s rank of entrepreneurial activity, Africa can be optimistic: The top 4 countries in the rank are African, and no less than nine out of the top ten are African, with the top of the rankings shared by Nigeria And Zambia, where 39.9% of residents started their own businesses. Next are Senegal (38.6%) and Namibia (33.3%).
Despite the impressive figures, the top 9 African economies in the rank are not among the strongest leading economies in the world, to say the least. It makes sense that especially in developing markets, where the supply of jobs is often scarce, the residents are forced to start new businesses in the absence of other, more substantiated offers.
The way I see it, this is a particularly positive and promising figure, even if the reasons are somewhat negative. The predicaments of emerging markets can be found in various continents and countries around the world, but Africa is the only one dominating the Economist’s ranking. This demonstrates the entrepreneurial mindset that characterizes the continent’s residents. The same hard-to-define mindset is what pushes Africans to innovate, initiate, work hard, take risks, and start new businesses at such a huge percentage.
The entrepreneurial mindset is the fertile ground that is no less than essential when establishing an ecosystem of innovation and entrepreneurship, and is the main reason for the great potential of the continent. Africa’s entrepreneurial mindset is also the main reason for my optimism, and that of many others, when looking at the future of the developing continent.
With smart investments, hard work and cross-border collaborations, Africa can expand its entrepreneurial mindset, and become the global leader of innovation it can, and should, be.