Much has been said lately about the role of incubators, accelerators and other entrepreneurship ‘ecosystem players’ in Africa. Nicolas Friederici argues to re-define the term ‘ecosystems’ as there is a risk for initiatives ‘to lose touch and set up ineffective, wasteful, or even harmful projects’.
We’ve all been there. You’re in a conversation about conditions for tech entrepreneurship somewhere in Africa, let’s say Harare. It’s all quite complicated: there are lots of actors (entrepreneurs, universities, donors, hubs and incubators, etc.) with different levels of capacity (skills, experience, funds, etc.) and also lots of broader conditions (market opportunities, regulation, etc.). All seems to be somehow connected to the story of a typical local entrepreneur. But you’re looking for a simple way to describe everything which, you assume, affects the chances to succeed for the average local tech entrepreneur. That’s when you probably say something like: “Well, the ecosystem in Harare is still very nascent.”
In the eye of the beholder
In interviews during my field research, I asked dozens of stakeholders of tech entrepreneurship in Kigali, Harare, and Accra what “ecosystem” means for them. If I had to mention one clear finding, then it would be that there was no agreement about what an ‘ecosystem’ is.
Instead, everyone appears to make their own sense of this term. Some use it to refer to a single building or innovation hub. Others equate ecosystems with entrepreneurial networks, or refer to all support institutions in a city or country, or to a field of specialized activity (as in “the R&D ecosystem”). Yet others see it much more broadly and include markets, infrastructure, and policies. And finally, there is now a lot of talk about a transnational African entrepreneurial ecosystem.
Participants also had a notion of the quality of ecosystems, using terms that were related to maturity (“nascent” vs. “advanced”) and connectedness (“fragmented” vs. “integrated”). What’s more, organizations like innovation hubs have now started to make it their very purpose to “build ecosystems.” This is a huge shift from incubators, which have been meant to support specific companies.
These observations lead me to believe that “ecosystem” is probably a heuristic that people use to simplify and think about hugely complex networks and systems of actors and institutions, but it’s not an observable, factual “thing that exists in the world.”
Mind you, this is not just word play or abstract philosophical debate. Ecosystem maps and assessments are hugely popular these days, and they inform practically any funding, investment, and location decision in tech entrepreneurship. It’s not far-fetched to draw the parallel to the — largely unsuccessful — drive to support “clusters” in the 1990s, which also suffered from lacking clarity what a cluster is.
Now, I’m not arguing that all effort and attention directed at ecosystems is misguided and based on some sort of hoax. At the latest since the rise of Silicon Valley, we know for a fact that entrepreneurial opportunity depends on place-based factors in entrepreneurial context. These constitute what has become known as “regional advantage.”
Which interactions really create value?
But what I am concerned about is that we risk losing focus on what matters. What matters, in my view, is the creation of economic and social value by entrepreneurs. Fundamentally, the ecosystem idea tells us that entrepreneurs interact with and depend on others around them to create value. But who do they really need?
When I put this very question to the 67 founders and co-founders of tech startups that I interviewed, the answers had surprisingly little to do with the typical notions of ecosystem support mentioned above. Time and time again, customers were the most important counterparts for entrepreneurs. It was in the interaction with customers that entrepreneurs learned how to improve their product and work towards monetization.
Next up were mentors. Mentors were usually not star entrepreneurs or experts from Europe or the US, except in rare cases where entrepreneurs actually targeted those markets. Most entrepreneurs said they benefitted most from regular interactions with successful local entrepreneurs who they could identify with and emulate.
Third were peers. Especially for entrepreneurs just starting out, it was often important to be part of a community of like-minded others. This community did not only matter for peer-learning, but also for emotional support and a process of “entrepreneurialization.” It was mainly in this context that innovation hubs were important facilitators. More advanced entrepreneurs tended to learn from select groups of entrepreneurs who were even further ahead on the entrepreneurial journey.
Online learning and exposure was also crucial for most entrepreneurs. I hardly met any tech entrepreneur that hadn’t been influenced by online courses or blogs created in Silicon Valley. The Valley was generally the gold standard of doing things for most entrepreneurs, even though most had not been there and most said that things are very different in Africa.
Networking events and innovation competitions (often described as the key activities of ecosystem building) were seen to be useful to some extent, but most entrepreneurs “were over it” fairly soon. Once entrepreneurs had been to a few events, they would stop going regularly, only sampling particularly relevant events where they could expect to meet customers, mentors, or investors.
A grounded, entrepreneur-focused view
So what does that mean for our understanding of ecosystems? I suppose, the mentioned definitions of ecosystems are so many and so vague that they are not exactly all “wrong.” But it still seems to me that they miss out on the basics. For instance, rarely do ecosystem concepts account for customers, and if they do, they do it in an abstract way (as in “markets”) that cannot account for the variety of customers that African tech entrepreneurs cater to. Many ecosystem concepts also seem to have forgotten an old lesson from innovation system theory; namely that interactive learning (if in many different forms) is the foundation of capacity building and value creation.
Ultimately, I’d argue that it’s understandable that funders and support actors rely on the notion of ecosystems as a heuristic (or simply for marketing)—there does not seem to be a viable alternative to capture the complexity of entrepreneurial context in one word. However, I also found that, on the implementation side, supporters of tech entrepreneurship need to know in detail and in specific terms what they mean by ecosystem and who matters in ecosystems. If they don’t maintain a keen awareness of the realities and value-creating processes and relationships forged by entrepreneurs, supporters risk to lose touch and set up ineffective, wasteful, or even harmful projects.
So, think about it, what does “ecosystem” mean in your context? And who matters in it?
Nicolas Friederici is a PhD Candidate at the Oxford Internet Institute. His research examines the dynamics of innovation ecosystems and networks in Sub-Saharan Africa, and in particular the role of technology innovation hubs.