RESULT BASED MANAGEMENT FOR ICT

ECOSYSTEM BUILDERS

Agenda

10:00am – 12:30pm

Brainstorm on Government

policies that facilitate the

growth of the ecosystem

1:30pm – 3:30pm

To determine roles of the

components of an ecosystem

Sunday January 28th Tuesday January 30th

2

10:30am – 12:30pm

Identify an action plan to foster

the growth of ICT innovation and

entrepreneurship

1:30pm – 3:30pm

Wrap up & Techniques to

evaluate current approach for

better results.

Session 1 Brainstorm on Government policies to facilitate the growth of the ecosystem

Policy & Life cycle of startups

4

Economic Growth

Time

Cost &time

to start a

business

Incubators,

networks

Effective tax

rate

Incentivized

tax rate

Policy & framework

Access to Angels

Policy & framework

Access to VC

Policy & framework

Access to

Debt/Capital Markets

Policy facilitating access to

international markets/investors

An efficient public policy can support the development of a startup during its overall life cycle.

Government

ICT programs

Startup ecosystem growth model

5

Startup ecosystems go through the following 4 phases: activation, globalization, expansion and integration

Source: Global Startup Ecosystem Report, 2017

Evolution stages of the ecosystem by country

6

5 – 10 years 5 – 10 years

SEED ACTIVATION GLOBALIZATION EXPANSION INTEGRATION CONTRACTION

First few

startups

within a

concentrated

area

First success

stories (e.g.

IPOs, exits) and

more investors

migrate

Ecosystem

becomes self-

sustaining

(major elements

are developed)

Local and global

consolidation of

talent and capital

(M&A deals in

the digital area)

Global integration

and continuous

growth

Brain drain, no

renewal

- Nigeria

- Kenya

- Algeria

- Ukraine

- Poland

- Lebanon

- India

- Russia

- Italy

- India

- Brazil

- China

- Singapore

- UK

- France

- California

USA

- Israel

Source: National Incubator Center, Pakistan & Global Startup Ecosystem Report, 2017

Key components of public policies to encourage entrepreneurs

7

Phase 1

Seed & Activation

Phase 2

Globalization & Expansion

Phase 3

Integration & Contraction

Startup

Life

Cycle

Education: Entrepreneurial spirit

Effective tax rate

Seed funding framework

Series A funding framework

Staff: remove immigration barriers (law, culture)

Access to credit: Regulatory framework, incentives

Ease of creating business (cost, time)

ICT-sector public policies, tax incentives

Government ICT programs, incubators, associations

Intellectual property rights

Regulatory framework to attract international investors

Good practices – Policies facilitating the growth of the ecosystem

8

Government support is key: Focusing on key enablers of ICT innovation

o Developing a skilled workforce,

o Implementing ICT innovation policies,

o Facilitating entrepreneurial support and access to finance.

Facilitate start of businesses: promoting electronic services and communication technology

Scaling up affordable access to broadband

Tax policy is also a key element (electronic fillng and payment, free zones, etc.)

What about Nigeria?

9

To what degree are the following elements of the policy environment an obstacle (or not) to current

operations of startups in Nigeria?

No Obstacle

Minor Obstacle

Moderate Obstacle

Major Obstacle

Very Severe Obstacle

Ease of doing business (cost, time)

ICT sector policies

Tax policy, incentives

Intellectual property rights

Doing Business in Nigeria – World Bank Report

10 Source: Doing Business Report, World Bank, 2017

World Bank Assessment – Policy in Nigeria (1/2)

11

Rank of Nigeria has improved from 170 in 2014 to 145 in 2018.

Main strengths: Starting a business, getting credit, protecting minority interests

However, World Bank study shows weaknesses in property registration, taxes and quality of infrastructure

Source: Ease of Doing Business Report, World Bank, 2018

World Bank Assessment – Policy in Nigeria (2/2)

12 Source: Ease of Doing Business Report, World Bank, 2018

Session 2 To Determine Roles of the Components of an Ecosystem

14

190+ MILLION POPULATION

POPULATION < 30

~ 70%

THAT’S OVER

> 130 MILLION

YOUNG PEOPLE

Mobile phones in Nigeria – Overview

15

Mobile phones & Internet in Nigeria

16

Nigeria remains the world most mobilized country, with 81% of the internet traffic coming through mobiles.

Mobile phones are creating new markets: Mobile money

17

71.5% of Nigerians use a mobile banking app

63.6% of them use mobile banking apps to transfer money and 36.4% to pay bills

Mobile phones are creating new markets: E-learning

18

Nigerian behavioral studies show the future opportunities of other sectors outside apps and entertainment

in Nigeria. 48% of the people surveyed indicated that they use mLearning apps.

Top 5 states with active internet subscription in Nigeria

19

Active internet subscription in Nigerian top 5 states

Statements about Nigerian ICT ecosystem

20

“These are exciting times for the

fast-growing Lagos startup

ecosystem. We are seeing great

and innovative startups come

through the system and local and

international investors proving seed

capital to scale the ventures. To be

sure, there are still a lot of

challenges facing the ecosystem

but that’s to be expected since the

ecosystem is in its infancy.”

Collins Onuegbu

Director at Lagos

Angel Network

“A population of 20 million in

Lagos, long-ignored by global

companies, means that Lagos

tech startups have a large, ready

customer base without having to

expand geographically. But, this

also reflects a shortfall in the

thinking of many local founders,

who lack context of how their

business may fit into a global

competitive landscape and scale.

Alexandra Novitske

Investment Officer

Singularity Invest.

“Across Africa, you’ve got a pretty

stark difference between

perception and reality. We believe

that Africa is going to emerge as a

very significant player in the global

tech scene. The future of tech will

be written in Lagos, Nairobi,

Kampala and cities across Africa.”

Jeremy Johnson

Co-Founder and CEO

Andela

Backed by Google

Ventures

Key players impacting entrepreneurial ecosystems

21

Key players may play a direct, partially direct or indirect influence on the entrepreneurial ecosystem.

Direct Influence

Finance Business Support Policy Markets Human Capital Infrastructure R&D Culture

Banks

VC

Angels

Foundations

Incubators

Accelerators

Indust. Networks

Government

States

Municipalities

Corporations

Consumers

Distribution

Universities

High schools

Telco operators

Utility providers

Electricity providers

Labs Media

Direct Influence Indirect

MFIs

DFIs

Government

Legal services

Account services

Retail networks

Govt

Schools

Key players impacting entrepreneurial ecosystems

22

Key players may play a direct, partially direct or indirect influence on the entrepreneurial ecosystem.

Direct Influence

Finance Business Support Policy Markets Human Capital Infrastructure R&D Culture

Banks

VC

Angels

Foundations

Incubators

Accelerators

Indust. Networks

Government

States

Municipalities

Corporations

Consumers

Distribution

Universities

High schools

Telco operators

Utility providers

Electricity providers

Labs Media

Direct Influence Indirect

MFIs

DFIs

Government

Legal services

Account services

Retail networks

Govt

Schools

Governments have a huge role to play!

Banks Government

States

What about Nigerian ecosystem? – Finance

23

No Obstacle Minor Obstacle

Moderate Obstacle

Major Obstacle

Very Severe Obstacle

Access to seed funding

Access to public grants

Access to debt finance

Access to equity finance

To what degree are the following elements of the financial environment an obstacle (or not) to current

operations of startups in Nigeria?

What about Nigerian ecosystem? – Business support services

24

No Obstacle Minor Obstacle

Moderate Obstacle

Major Obstacle

Very Severe Obstacle

Access to legal services

Access to tax services

Access to incubators/accelerators

Access to consultants/advisors

To what degree are the following elements of the business support environment an obstacle (or not) to

current operations of startups in Nigeria?

What about Nigerian ecosystem? – Human capital

25

No Obstacle Minor Obstacle

Moderate Obstacle

Major Obstacle

Very Severe Obstacle

Availability of engineers

Availability of top managers

Availability of trained workforce

To what degree are the following elements of the availability of human capital an obstacle (or not) to

current operations of startups in Nigeria?

What about Nigerian ecosystem? – Business environment

26

No Obstacle Minor Obstacle

Moderate Obstacle

Major Obstacle

Very Severe Obstacle

Level of support for successful business people in the region

Political stability

R&D collaboration between businesses and university researchers

Potential level of corruption

To what degree are the following elements of the business environment an obstacle (or not) to current

operations of startups in Nigeria?

Session 3 Identify an action plan to foster the growth of ICT innovation and entrepreneurship

28

29

Great potential in Nigeria: Lagos, a rising star in African ecosystem

30

Lagos population

21 million

Lagos ecosystem

value: $2 billion

Early stage funding

per startup: $78k

14% women founders

Source: Global Entrepreneurship Index, 2017

The Nigerian start-up scene is attracting the attention of the west

31

When Facebook founder Mark Zuckerberg made his first trip to sub-Saharan Africa in 2016, he visited

both the Co-Creation Hub and the startup Andela.

The Chan Zuckerberg Initiative chose Andela for its first private sector investment.

On-going initiatives in Nigeria

32

Despite the challenges, several initiatives are supporting the Nigerian ecosystem:

o Public sector initiatives: NITDA, the Nigerian Communications Commission (NCC)

o Private sector initiatives: Technology incubation centers such as the Co-creation Hub (cCHUB), bub

hub (Kano), Stonebrick hub (Abuja) the Google Launchpad and the monthly Startup Hangout.

NITDA have been supporting startups and exposed them to global investment community (ITU Telecoms

World in South Korea, Gulf Information Technology Exhibition (GITEX) in Dubai)

cCHUB is collaborating with Google on the Google Launchpad Africa initiative where it is providing over $3

million in equityfree support, among other supporting aids to grow their businesses.

However, some challenges remain in the Nigerian ecosystem

33

As discussed in Session 1, the study World Bank – Ease of Doing Business shows weaknesses in the

Nigerian ecosystem: property registration, taxes and quality of infrastructure

Paying Taxes

Property

registration

Access to funds

at affordable

cost

Infrastructure

(electricity supply)

CHALLENGES

Action plan to solve these issues

34

1. Continue focusing on building VC industry: commission a VC report and issue a VC policy

(to attract international investors)

2. Increase attractiveness to VC players (entrepreneurs, investors, etc.)

o Review corporate and taxation laws

o Review immigration policy & processes

3. Create a more developed hub for entrepreneurs

o Build and designate key places in Lagos (free zones) or other cities

o Improve infrastructure such as electricity supply and broadband penetration

Session 4 Wrap up & Techniques to evaluate current approach for better results.

Understanding the exponential growth of the ICT ecosystem

36

Newly digitized products develop at an exponential pace instead of a linear one, fooling onlookers at

first before going on to disrupt companies and whole industries.

Governments need to put in place dynamic approaches to take into account this exponential growth.

The 6 Ds of this exponential growth

37

This exponential growth takes place in 6 steps called the 6 Ds of Exponential: digitization, deception,

disruption, demonetization, dematerialization, and democratization.

Digitized Deceptive Disruptive

Demonetized

Democratized

Dematerialized

The ICT entrepreneur needs a specific environment

38

OECD defines key components of a strong entrepreneurial ecosystem as follows:

Business

Support

Policy

Markets

Human Capital

Infrastructure

R&D

Culture

ICT

ENTREPRENEUR

Finance

Key determinants of entrepreneurial ecosystems

39

OECD considers these determinants as key to foster entrepreneurial performance and deliver impact.

Determinants

Finance Business Support Policy Markets Human Capital Infrastructure R&D Culture

Debt

VC

Angels

Stock

Entrepreneurial Performance

Determinants

Firms Employment Wealth

Economic Growth Job Creation Poverty Reduction

Industry networks

Incubators

Legal services

Tax rates

Tax incentives

Cost to start

Domestic

International

Market size

Graduation rates

Education

quality

Telecom access

Electricity access

Infrastructure access

Patents Mindset

Key determinants of entrepreneurial ecosystems

40

Best approach aims to focus on creating best environment and to adapt quickly to its exponential growth.

Determinants

Finance Business Support Policy Markets Human Capital Infrastructure R&D Culture

Debt

VC

Angels

Stock

Entrepreneurial Performance

Determinants

Firms Employment Wealth

Economic Growth Job Creation Poverty Reduction

Industry networks

Incubators

Legal services

Tax rates

Tax incentives

Cost to start

Domestic

International

Market size

Graduation rates

Education

quality

Telecom access

Electricity access

Infrastructure access

Patents Mindset

41

Thank you for your attention