Transcript Entrepreneurship Ecosystem Domain & Stakeholders

5th Global Forum on
Innovation & Technology
Entrepreneurship
East London, South Africa
(30th May, 2013)
Session on: Public Entrepreneurs
& Flagship Initiatives
By
Eng. George Mulamula
CEO DTBi & Senior Govt. Advisor
Tanzania
Presentation
 Brief Economic Country Profile
 Entrepreneurship Ecosystem Domain &
Stakeholders
 Synopsis of Tanzania Entrepreneurship
Environment
 Challenges in Tanzania Entrepreneurship
Ecosystem
 Flagship Initiatives to address challenges
 Expected Benefits
 Conclusion
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Brief Economic Country
Profile (1/3)
 Tanzania has Vision 2025, objective:
• High quality livelihood
• Peace, stability and unity
• Good governance
• A well educated society
• A strong and competitive economy
 In a population of 45Million, GDP per capita of
$527 and GDP growth rate of 7%, with SMEs
estimated to contribute around ⅓ of GDP (NBS &
WB Statistics)
Initiatives by Mulamula
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Brief Economic Country
Profile (2/3)
 Unemployment, and improving the skills of
the labour force are imprinted on the
government agenda as part of the 2025
development vision
 The Ministry of Finance and Economic Affairs
runs several initiatives focusing on
unemployment, along with supporting
institutions related to education and
vocational training.
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Brief Economic Country
Profile (3/3)
• Exports total 21.7% of GDP, main commodities
are cash crops, primarily tobacco, cashews,
coffee, cotton, tea, gold, diamonds, cloves and
sisal
• Imports total $11.2bn p/a, and key imports
include oil, machinery, transport equipment,
raw materials, and consumer goods
• Even with national fibre backbone, national
computer penetration very low compared to
about 83% mobile penetration
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Entrepreneurship Ecosystem
Domain & Stakeholders (1/2)
• Policy (Regulatory framework and incentives,
enforcement and property rights, etc.) - Government
• Culture (Tolerance for risks, mistakes & failures,
innovation, experimentation, etc.) – Public & Private
Sector
• Capital (Micro loans, venture capital, public capital
markets, Angel Investors, IP Assets etc.) – Financial &
Private Sector
• Markets (Distribution channels, expertise in
production, entrepreneurial network, etc.) – Public &
Private Sector
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Entrepreneurship Ecosystem
Domain & Stakeholders (2/2)
• Human capital ( Skilled labour,
entrepreneurship training & professional
training, etc.) – Learning Institutions & Private
Sector
• Support /Business Development Services and
capacity development (professional services
such as accounting legal and technical experts
etc.), including Infrastructure (telecoms,
energy, transportation incubation, fibre
backbone, etc.) – Public & Private Sector
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Synopsis of Tanzanian
Entreprenuership environment
(1/5)
• Following independence in 1961, Tanzania
implemented a socialist state – now in a modern
day Tanzania, post-Socialist legacy is still manifest
in the business sphere
• Lack of acceptance towards entrepreneurship
which is slowly being overcome
• Entrepreneurship is still seen as a ‘last resort’ for
those who can’t secure formal employment
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Synopsis of Tanzanian
Entreprenuership environment
(2/5)
• Other practical obstacles to establishing
entrepreneur start-ups (which leads to many
Enterprises remaining in the informal sector)
include:
- Cumbersome registration processes, the process
often takes much longer, and involves dealing
with multiple government departments with
limited communications channels. (Now foreign
company investments use a 1-Stop Centre at
TIC)
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Synopsis of Tanzanian
Entreprenuership environment
(3/5)
- Difficulty recruiting and retaining few skilled
workers with a strong work ethic
- High costs of supporting infrastructure
- Lack of practical skills and tendency to ‘copycat’
successful businesses
- Difficulty in getting seed funding & tendering
bonds
• Within the informal sector, there is a 60:40 split
between rural and urban owned businesses
respectively
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Synopsis of Tanzanian
Entreprenuership environment
(4/5)
Financial Support
• Government recently increasing access to capital for
SMEs (through PM’s Office & Ministry of Finance), as
difficult for the majority of the population to access
funding from a commercial bank
• Access to microfinance institutions (MFIs) requires
collateral such as a house, land or a car, which many
do not have access to.
• Alternative is the forming co-operatives, with the
group acting as collateral in the eyes of the lender
(MFI)
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Synopsis of Tanzanian
Entreprenuership environment
(5/5)
Focus on youth entrepreneurship
• 53.3% of unemployed persons are under the age of 35,
with unemployment lower amongst rural youth (32%)
• Amongst unemployed youth (15-24), approximately 57%
are female.
• Unemployment levels are 1-3% amongst university
graduates
• The Ministry of Labour, Youth & Sports developing Youth
Policy, administers a Youth Development Fund and a
Small Entrepreneurs Loan Fund targeted at youth and
other vulnerable groups. (Still requires more tangible
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action and attention from the government)
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Challenges in Tanzania
Entrepreneurship Ecosystem(1/2)
 Lack of entrepreneurship policy, even though
good SME policy, while corresponding policies
not entrepreneur support “friendly”
 Failure to translate entrepreneurship tendencies
to curriculum (change in our education system
towards entrepreneurship)
 Lack of adequate mentorship/coaching to
entrepreneurial start-ups and exposure to role
models
 Limited skills (managerial & technical)
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Challenges in Tanzania
Entrepreneurship Ecosystem(2/2)
 Mindset towards record keeping, innovation,
quality and compliance still low
 Low appreciation of the value/use of expertise
in business for most entrepreneurs
 Low level of economic and financial literacy
 Poor infrastructure e.g. Power, road network
etc.
 Though some of the business operators run
multiple businesses, graduation from micro to
medium is rare
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Flagship Initiatives to address
Challenges (1/4)
 Teknohama Business Incubator (DTBi): Incubator
to build entrepreneurs with provision of full
range of business development services and
capacity building
• Tanzania Open Data Initiative under OGP
(President’s Office): through technology &
innovation create entrepreneurs utilising machine
readable open data for transparency, citizen
participation, accountability and integrity.
(Tanzania has just finished an eReadiness Open
Data assessment) Initiatives by Mulamula
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Flagship Initiatives to address
Challenges (2/4)
 START Skills Programme (COSTECH, WB): program
bringing together universities students, the public
and private sector to develop and create
sustainable enterprises that are ICT-based
solutions in real-life settings.
 Has component of entrepreneurship and
innovation using open data to be made available
through OGP building
 Capacity building for visualization of such data
(mobile and web) to allow the delivery of services
and feedback from
the citizens for better
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Initiatives by Mulamula
governance.
Flagship Initiatives to address
Challenges (3/4)
 Innovation Fund (COSTECH, UK DFID, DTBi &
TANZICT): To address the “valley of death”
syndrome, an innovation fund for
entrepreneurs being set up, to be operational
in Q4 2013.
 Currently there is a little seed money being given
to Start-up entrepreneurs who are innovative with
a “bankable idea”
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Flagship Initiatives to address
Challenges (4/4)
 New Innovation programme in developing policy
& projects (WB, DTBi, Aalto University &
COSTECH): to support the above initiatives
through building capacity in delivery of the
Tanzania Open Government Action Plan through
promotion of open and collaborative models on
innovation and a culture of open data.
 Implementation to be by effective organizational
arrangements, stakeholder ownership, policy
makers & using appropriate instruments and
feedback mechanisms.
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Expected Benefits (1/2)
 Development of mindset and enterprising culture
among the youth, women & citizenry
 Increased entrepreneurship training in Learning
Institutions
 Critical mass of youth having appropriate skills (soft &
hard) to be creative, innovative & entrepreneurial
 Policy statement & strategic project implementation
having positive impact on Entrepreneurship &
Innovation ecosystem
 Increased numbers of MSMEs with high involvement
of women and youth, creating jobs & wealth
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Expected Benefits (2/2)
 An innovation/entrepreneurial policy &
enabling legal/regulatory framework from
Government with supportive institutions
towards entrepreneurship activities
 Use of ICT in innovation &
entrepreneurship, both as a tool and an
enabler, while tapping the use of open data
to achieve Tanzania’s Vision 2025 and being
part of “code4africa”
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Conclusion
 The process is designed to unleash the
creativity and innovation of our youth &
nationals in order to find solutions for
Tanzania’s pressing socio-economic problems
through the lens of viable and sustainable
entrepreneurship
 Tanzania Govt. is dedicated to creating a
viable innovative & sustainable
entrepreneurship ecosystem
 Partnerships are important and all are
welcome to partner with Tanzania in realising
her vision 2025
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THANK
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YOU
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