building innovation ecosystems: opportunities for partnerships between africa and germany
TRANSCRIPT
BUILDING INNOVATION ECOSYSTEMS:OPPORTUNITIES FOR PARTNERSHIPS BETWEEN AFRICA AND GERMANY
BERLIN AFRICA ECONOMIC FORUM ON INNOVATION19 Nov 2014, Berlin
WHAT WE SHOULD AIM TO ACHIEVE TODAY
A forward thinking agenda aimed at:
⁄ Highlighting dynamic new opportunities arising
out of Africa
⁄ Establishing how Germany can help Africa unlock
its true potential
2
3
AFRICA, A FAST-GROWING AND DIVERSIFYING ECONOMY…
Economic resilience:7 out of the world’s 10 fastest growing economies are in Sub Saharan Africa
GDP GROWTH, UNWEIGHT ANNUAL AVERAGE, %
2.
3.
4.
5.
6.
1970s 1980s 1990s 2000s 2011-15
Asian Countries African Countries
Excluding countries with less than 10m population , and Iraq and Afghanistan
2001-2010
Angola 11.1
China 10.5
Myanmar 10.5
Nigeria 8.9
Ethiopia 8.4
Kazakhstan 8.2
Chad 7.9
Mozambique 7.9
Cambodia 7.7
Rwanda 7.6
WORLD’S TEN FASTEST-GROWING ECONOMIES*(Annual average GDP growth, %)
2011-2015
China 9.5
India 8.2
Ethopia 8.1
Mozambique 7.7
Tanzania 7.2
Vietnam 7.2
Congo 7.0
Ghana 7.0
Zambia 6.9
Nigeria 6.8
Source: The Economist, IMF
4
AFRICA, A FAST-GROWING AND DIVERSIFYING ECONOMY…
Economic resilience:Even after the global
recession in 2009, Sub
Saharan Africa remains one
of the fastest growing
regions
Source: MF (2013). World Economic Outlook: Tensions andtransition
-9.
-4.5
0.
4.5
9.
13.5
2005 2005 2007 2008 2009 2010 2011 2012 2013 2014
Developing Asia
Independent States
Sub-Saharan Africa
Middle East and North Africa
Central and Eastern Europe
Euro Asia
5
AFRICA, A FAST-GROWING AND DIVERSIFYING ECONOMY…
Cost of doing business in Africa is reducing
Source: The world Bank Group (2014) World Development Indicators
1. Cost of business start-up procedures (%of GNI per capital)
-9.6
4.3
18.2
32.2
46.1
60.
2003 2013
-9.6
4.3
18.2
32.2
46.1
60.
2003
2. Time required to start a business (days)
2013
6
AFRICA, A FAST-GROWING AND DIVERSIFYING ECONOMY…
Creative industries
are flourishing
2ND LARGEST
FILM INDUSTRY
IN THE WORLD
$ 200-300
MNIN REVENUE
PER YEAR 2ND LARGEST
EMPLOYER
AFTER
AGRICULTURE
Nollywood, Nigeria’s
film industry, is a
sector to watch.
7
AFRICA, A FAST-GROWING AND DIVERSIFYING ECONOMY…
OIL & NATURAL GAS PRODUCTION
Africa will account for 10% of global oil and 9% of natural gas production in 2035**Source: BP Energy Outlook 2035
A fast growing middle class and a youthful workforce, with 50% of population below19 years
GROWINGWORKFORCE
STEADY GROWTH IN
WORLD TRADE Trade between Western
Africa and Asia is forecast to increase by 14% annually*
Source: International Trade Centre (ITC)
120% GROWTH
OIL RESERVES
From 57 billion barrels in 1980 to 124 billion barrels in 2012. ***
Source: US EIA
8
AFRICA’S CURRENT ECONOMIC LANDSCAPE…
Angola as an example
Rapidly evolving banking sector / Increasingly liberalized & privatized / Asset growth from $3 billion in 2003 – to more than $57 billion in 2011
Annual growth in excess of
7% for the next 2 years
(6.8% in KW in real terms or
7.1% in USD)
ANNUAL
GROWTHGNDP
Gross National Disposable Income grew by 27% between 2007 2012Source: World Bank
CONSTRUCTION
BOOMA construction boom that is
creating jobs and wealth
HOUSEHOLD
GROWTH
Household Consumption expenditure/GDP grew 35.7% from 2007 to 2013Source: IMF WDI
Luanda then and now…
Luanda - 1950 Luanda - 2014
10
AFRICA’S CURRENT ECONOMIC LANDSCAPE…
Regional picture is also strong
IMF 2013 Report on sub-
Saharan Africa states that:
Between 2007 and 2012,
average annual FDI inflows exceeded 5 percent of GDP in 18
countries in the region
Private capital flows to
the frontier markets in sub-
Saharan Africa doubled
between 2010 and 2012
Portfolio and cross-border bank flows also
increased – surpassing the $17 billion mark in 2012
11
OPPORTUNITY
Large scale
infrastructure
projects e.g. transport
links, hotels, commercial
property
REAL
ESTATEFINANCIAL
SERVICES
Lagos: a thriving regional
financial hub
ICT
Projected to be
worth $150 billion
by 2016
12
DRIVING INNOVATION THROUGH AFRICA’S SMES AND STARTUPS SECTOR
SME sector in Sub Saharan Africa accounts for over
90% of all enterprises.
In spite of this, in most
African countries SMEs
contribute less than
20% to gross GDP and
barely impact
employment levels.
Youth account for 60% of all unemployed Africans.
95-million new jobs
needed by 2020.
Another 160-million new
jobs needed by 2030
REALITY OPPORTUNITY
Supporting high
level innovation can
bridge this gap
13
WHAT STANDS IN THE WAY OF AFRICA INNOVATION?
CAPITAL
EXPERTISE AND CAPACITY BUILDING
FAST WORKING INNOVATION ECOSYSTEM
14
HOW GERMAN COMPANIES CAN SUPPORT THROUGH FUNDING…
Innovation & Competitiveness
VC backed companies spend 2x more
in R&D
Promotes creation of innovative
product and services
Leads to above average exports
growth (1.3-8x higher)
15
HOW GERMAN COMPANIES CAN SUPPORT BEYOND FUNDING…
Investments in institutional infrastructure that can create
new innovation-led markets, industries and jobs relevant to Africa
Foreign expertise & know how to enhance processes,
organizational methods and advisory services
16
WHY ONLY A MUTUAL COLLABORATIVE APPROACH WILL WORK…
Long-term commitment to support Africa’s strategic economic
goals
Strong local partners to navigate regulatory developments and
cultural barriers
In order to succeed in Africa, there must be:
17
AFRICAN INNOVATION FOUNDATION…A LAUNCHPAD
AIF has the largest
database of
African innovators
IPA has received
over 2,000 entries
from 48 African
countries
Technological innovations in the
manufacturing and service industries,
healthcare, agriculture
and agribusiness,
environment, energy
and water and ICTs
18
THE TIME TO INVEST IN AFRICA IS
NOW!
THANK YOU!