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Exploring the pattern and framework conditions of technology-based entrepreneurial activities in Africa

Author(s): 
Otioma Chuks
Theme: 
Youth jobs, skills and entrepreneurship

One of the highlights of Sustainable Development Goals (SDGs) is that achieving sustainable industrialisation requires productive economic forces that are capable of combining knowledge and resources to create value which in turn generate employment and income. This motivates SDG 9: Industry, Innovation and Infrastructure. While entrepreneurship is vital to creating value and driving performance in this quest, entrepreneurial activity that is driven by necessity could be unproductive and indicative of unemployment rather than drive sustainable innovation, especially in developing countries. Africa, in particular, has attracted attention following the rise in innovation-driven entrepreneurship that is evident in the number of entrepreneurs who start businesses that are enabled by technology (henceforth technology start-ups), largely attributed to growing Internet penetration on the continent. These are important for creating new products and employment. However there is little research to understand the activities of technology start-ups in Africa. Such activities are used here as technology-based entrepreneurial activity (TBEA). While some studies provide insights into enabling conditions for TBEA in single cases,available comparative studies use self-reported data on entrepreneurship. Inter country exploration of TBEA can enrich understanding through uncovering its variations and underlying conditions. Therefore this paper measures the prevalence of TBEA and investigates whether its occurrence reflects underlying framework conditions (socioeconomic, institutional and information environment) within which it is embedded. Combining data from new (Internet scraping) and existing official sources, it develops indices (start-up web presence, online financing opportunity and technology hub intensity) to capture TBEA in 21 African countries. The paper demonstrates that pockets of economies constitute dominant clusters of TBEA on the continent. Urban agglomeration is a cross-cutting underlying condition in top-performing cases. Few exceptional cases show consistency of TBEA with strong knowledge base and institutional conditions. This study concludes that TBEA is yet far from being an Africa-wide phenomenon given the prevalence of weak cases. Itadvancesthe argument for complementary frameworks that ease entrepreneurial entry and financing, knowledge infrastructure and clusters to support entrepreneurial activity. Itprovidesinsights and indicators for future research on entrepreneurial opportunities of Internetin Africa. This paper aligns with SDG 9, which is linked to building resilient infrastructure, sustainable industrialisation and innovation, and SDG 8: decent work and economic growth.