African Tech Startups And The Fourth Industrial Revolution
A Fourth Industrial Revolution is underway and this time, Africa is a part of it. African tech startups are part of a digital revolution that has the power to transform employment, industries, economies and relationships.
The First and Second Industrial Revolutions swept the Western world. It was not until the Third Industrial Revolution expanded information technology that African lives were truly changed and reliance on traditional employment started to decline. In contrast to its predecessors, the Fourth Industrial Revolution is unfolding at an exponential rather than a linear pace.
From The Market Mogul. Story by James Lambert.
Today, the transformative power of technology should be viewed as an opportunity for innovation and the development of skills for enabling wide scale change rather than a ‘magic bullet’ for a nation’s problems. Nonetheless, this shift will support Africa’s transition from the margins to the mainstream of the global economy and lead to the emergence of a blossoming ecosystem of entrepreneurs, tech ventures and innovation hubs.
The Rise of Silicon Savannah
It is widely accepted that Africa’s tech movement has its origins in Kenya, hence the moniker ‘Silicon Savannah’ for Nairobi. This is due to a dynamic combination of factors and coincidences, namely, the emergence of mobile money and a global crowdsourcing app, Africa’s tech incubator model and a genuine government commitment to ICT policy.
The Emerging African Tech Landscape
As notorious as it has become, Silicon Savannah only represents a share of Sub-Saharan Africa’s tech scene. Research led by the authors of ‘The Next Africa’ highlight the existence of over 200 African innovation hubs, 3,500 new tech-related ventures and over $1bn in Venture Capital towards a pan-African development of start-up entrepreneurs.
As an illustration, Nigeria is becoming a centre for technology investment. Despite the country’s various challenges, investors and entrepreneurs remain enticed by the promise of scaling applications to Africa’s largest economy.
Venture Capital Funding
Venture capitalists willing to tap into the recent waves of technological advances on the back of the spread of mobile phones are pouring millions of dollars into local and international Africa-focused start-ups.
VC funding raised by African tech start-ups in 2016 totalled US$ 366.8m, which was up 33% from 2015. Financial inclusion and consumer services drew most of this investment.
Venture capital will not only create economic sustainability but also the technological and managerial support required for strategic and operational decision-making, which often cause new businesses to fail.
A Bright Future
According to a survey by the Emerging Markets Private Equity Association, Sub-Saharan Africa has become the most appealing emerging market for investors. The overall narrative overrides the belief that Africa is disconnected from the global economy, mired in conflict or corruption and heavily dependent on foreign direct investment.
The forthcoming revolution is driven by business, innovation and a new class of highly talented entrepreneurs. The significance of Africa’s markets, in conjunction with its savvy entrepreneurs, will mark an era in which its potential will take precedence over its challenges, and thus transform the developing continent into an entrepreneurial global powerhouse and reshape its relationship with the world.
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