The Next Era for African Innovation Hubs
It is no longer news that in the past decade innovation hubs have proliferated in Africa, shedding light on the promise of potential for future economic growth on the continent. In their years of existence, hubs have experimented with business models, tested and validated their value to the entrepreneur and to varying extent depending on context, demonstrated that the hub model of catalysing innovation works. Hubs add value to the new entrepreneur, the freelance professional, the institution looking for tech services and the organization looking for fresh talent. Also to the organization seeking vibrant shared work space or space to host events. Non- profit donors and corporates alike have gained some value from partnering with hubs. Investors have found opportunities through the networks that coalesce around hubs. None of this is refutable however debatable the extent of value has been in different hubs.
Survival Mode
Yet majority of hubs still struggle with financial sustainability. Why is this the case? Why are majority of hubs operating in survival mode at a time when no one wants to be left out of the ‘tech wave’? At a time when even governments are investing in technology as the key to unlocking Africa’s future? It could be argued that hubs are still the new kid on the block — most private and public institutions (corporations, academia, media, civil society and government) are still figuring out what this new kid is about. Partnerships and sponsorships that happen are done as experiments to get closer and examine them. Regardless of this argument however, my view is that hubs themselves are not reaching outwards to sell themselves and figure out what problems they can solve for other players in their ecosystem. They tend to have a ‘sit pretty and wait for suitors’ approach that is going to backfire on them in the long run.
They have not identified what value actors in the ecosystem need from them. One reason for this is that they often begin their existence by creating direct value for the entrepreneurs as the core of their communities and only once they are comfortable with this do they think of external organizations. Often, these organizations are viewed through a narrow lens either as potential sponsors of entrepreneur-focused programs or as clients for consulting services, space rental and so on. Typically, hub managers view the hub’s relevance to the entrepreneur only in terms of providing direct training, incubation and exposure. But what if they expanded their concept of value to be as a catalyst of the entrepreneurial environment as a whole? This means they would look at their position in the ecosystem and identify spaces where different players have itches that need scratching. They would then need to reach out proactively to these players and interact with them in order to define this value and get paid for delivering it. In short, hubs should be acting like the startups they support — actively developing their product to meet ecosystem needs AND marketing themselves aggressively. Otherwise they will not scale.
Another reason I think hubs have not made great strides to understand their value is that they have grown accustomed to grant funding that distracts them in the perpetual short-term. Grant funders are the ‘suitors who come knocking’ most frequently. Obviously, this is dangerous if not entirely toxic (especially when donors don’t have a focus on the life of the hub beyond their grant cycle) for reasons that have been well illustrated before. My guess is that without grant funding, many hubs would shut down either because they would discover their glaring irrelevance or because they would not be able to quickly build relationships within their ecosystem that would yield revenue. This situation urgently needs changing if innovation is going to yield the promise of economic and social development.
How to Make Them #Woke: An Experiment
An interesting experiment would be to put a timer on hubs’ grant funding and then take their leadership teams through a strategy development process through which they would have to reflect on their identity, define the value they currently add, examine their environment to identify opportunities and relationships to add value and create structures and plans to achieve sustainability. Let’s say each hub got core funding to keep their lights on for 18 months while they figured out their sustainability. What do you think would happen then?
