PHUMLANI NKONTWANA: African entrepreneurship has a knowledge problem

Trying to understand African entrepreneurial ecosystems is a little like entering a vortex — a whirlpool of confusing and conflicting thinking where issues tend to slip away and disappear. Limited understanding of the vital challenge areas that constitute a healthy and successful ecosystem, including the geographic, diversity, momentum, density and maturity indicators, compounds this problem.

At the recent Global Entrepreneurship Network Global Entrepreneurship Congress Africa (GEC+Africa) the central crisis facing entrepreneurial ecosystems on the continent was laid bare: there is very little data available with few common areas of knowledge to help policymakers and practitioners make sense of collective efforts. Outside the venture capital, techno-chauvinism and reductionist world of widely available and accessible entrepreneurship data, we simply do not know what is going on in terms of talent, support, funding, public policy and ecosystem performance in their pluralistic senses.

The black boxes

Knowledge on entrepreneurial ecosystems in Africa is a black box. While there are various ongoing experiments, we don’t know how to easily get access to institutional data sets and make sense of what is going on in a uniform fashion. We simply do not have the artistry and science of identifying, selecting and supporting first-time youth cofounders from Africa. This is based on the observation that we can barely count the number of truly successful youth ventures produced by local entrepreneurial ecosystems on our two hands.

We do not know enterprise support organisation (ESO) appropriate levels, working modes and time frames needed to successfully progress a venture from one stage to another. We lack information about the effective entrepreneurship policy formulation process. With the exception of Tunisia in 2018, Senegal in 2019 and recently Nigeria and Democratic Republic of Congo in 2022, too many African countries that are developing so-called “start-up acts” are taking an awfully long time before the policies are implemented. This at a time that ecosystem stakeholders and entrepreneurs need policy direction more than ever before with environmental, social & governance sustainable development goals and ever-changing regulatory demands.

We also don’t have the capacity to measure the propensity or potential of Africa’s entrepreneurial ecosystems beyond the shining, wealthy cities and negligible male hero tech entrepreneurs regularly profiled. Ultimately, most of what we know about our own entrepreneurial ecosystem performance are frameworks and ways of seeing from Europe or North America.

In other words, we have a massive knowledge problem

Ecosystem performance

GEC+Africa was a gathering focused on policy and research. The sessions were effectively structured to share public policy and research innovations on ecosystem performance, incubator and programme performance, and ultimately, inclusive entrepreneurship.

But there can be no good entrepreneurship policy formulation or knowledge sharing without a quality set of databases on ecosystem performance, incubator and programme performance, and long-term empirical outcomes on whether local ecosystems are inclusive. Africa needs the tools and the equipment to make sound decisions. Entrepreneurship is at the very least both an art and a science. This means one needs a good set of credible and pluralistic data to develop hunches about how, when and what to make a move on. This is true for policymakers, funders and ESOs as much as it is true for entrepreneurs.

Silver linings

For a while now relevant ministers across various African states have been blamed for either the lack of entrepreneurship policies or developing ineffective ones. But without good data, creating entrepreneurship policies is like using substandard bricks to build houses. This is not only unproductive, but also a waste of scarce public resources. While GEC+Africa illuminated these data gaps and issues, there are a few pockets of excellence providing lighthouse-like ecosystem development services and hope.

For one, GEC+Africa saw the launch of the first Africa entrepreneurial ecosystem index (AEEI) that sheds light on the reform readiness of countries on the continent and offers guidance to policymakers and ecosystem actors on how to improve their entrepreneurial ecosystems.

There was also a public announcement of three original diagnostic tools on entrepreneurial competencies and venture performance that have been developed and tested by the Allan Gray Centre for Africa Entrepreneurship at Stellenbosch University. These tools are co-developed from and by African scholars, economists, statisticians and data scientists to contribute to a pro-Africa epistemological toolbox and ways of understanding local contexts from the rooted and lived experiences of African practitioners, entrepreneurs and policymakers.

The call to action

In presenting these tools as a keynote address on data-driven philanthropic efforts at GEC+Africa, I called for a data hub of hubs I envision as a coalition of intentional and long-term institutions to build new pro-Africa data sets and augment existing data by creating bridges to freely share anonymised data.

While there is a concern that organisations are not used to partnering through data at a time when there is a proliferation of data privacy laws, Africans are inherently communal, with a strong intergenerational history of sharing. Through successful blood banks and relevant campaigns, we have done very well for example in sharing something as sensitive as blood to ensure our fellow citizens survive and thrive.

A call for a credible, long term and ambitious data hub of hubs can be seen as a kind of national data blood bank for African entrepreneurship. Some African countries have developed massive, complex blood collection sites (mobile and stationary), distribution channels and storage capacities to safeguard and progress the lives of human beings. Our local entrepreneurial ecosystems need us to organise, envision and create similar bold efforts in order to save and progress African ESOs and cofounders to better venture performances.

May the real ecosystem builders stand up and rally behind a much-needed coalition of institutions to cofound or back Africa’s first-ever data hub of hubs to provide a lifeline of lighthouse-like insights and hope by shedding light on local entrepreneurial ecosystem black boxes and dissipate vortices African cofounders face.

• Dr Nkontwana, a development economist, researcher and entrepreneur, is founding academic director of the Allan Gray Centre for Africa Entrepreneurship at Stellenbosch University and founding CEO of Fuata Africa.