African governments have to start playing active roles in innovation growth

We like Nigeria’s Vice President Yemi Osinbajo; he never misses the opportunity to let the world know how committed he is to innovation growth in Nigeria. He visits innovation hubs, one after the other, sometimes in company of top officials from other countries, inspires the tech community and makes promises, but his efforts may bear little fruit. And it’s not because of his lack of commitment to supporting innovation or a paucity of ideas from the hubs he frequents, it’s because he’s building structures without a foundation. This foundation is what he needs to build and it’s more important that a thousand visits.

Those in the startup ecosystem know that it takes more than funding and inspirational talks to build a successful business out of ideas. Ideas rule the world, they say, but it’s what you do with the ideas that changes the world and makes it a better place. Only the African startups that are meeting specific needs with research-backed solutions, stand a chance of scaling and becoming growth companies.

Nigeria’s Vice President Prof. Yemi Osinbajo with British Secretary for Africa & International development, Rt. Hon. Harriett Baldwin at Ventures Platform, Abuja. August 29, 2018. Credit:@ProfOsinbajo/Twitter

Lessons from the U.S.

It is easy to talk about why the most valuable companies in the world are tech companies, but we seldom acknowledge the role of the government in laying the right foundations for their growth.

Following the Second World War, the US Government committed to large-scale support for scientific research. It had seen Science play a crucial role in the war (for example, in the Manhattan project that led to the atomic bomb). Why not use Science in peacetime to strengthen the economy and help to meet society’s needs?

The U.S. created agencies to bring its dream to life, including the National Institutes of Health (NIH), which was responsible for biomedical research, and the National Science Foundation (NSF), which supported research and education in other fields. While these agencies had their own laboratories, they ensured that most of the research they funded was conducted in universities.

Although the leading research-based universities were responsible for several key innovations in information technology and biotechnology, their most important contribution was providing a stream of well-trained scientists and engineers that industries could engage.

To further encourage innovation in information technology, the U.S. government made sure the purchasing policies of its Department of Defence (DOD) was favourable. The DOD became very close to companies whose technology could be used for military equipment and sophisticated weapons. In addition to funding research in universities and firms, the Department also became a large customer for the industry.

Although, the top beneficiaries of military spending were established companies such as IBM, but the DOD and the Advanced Research Projects Agency (ARPA, a division of DOD later renamed the Defence Advanced Research Projects Agency, or DARPA) ensured startups were also engaged to encourage them. At the time, these startups only had the military as their customer, but they were able to build on that to expand their services to non-military markets.

Government policies made these startups thrive. Universities also played an important role in facilitating the proliferation of startups. Historically, American universities have always had close links with industry, thanks to the Morrill Act of 1862, which created land grant colleges, financed by the sale of federal land, in many states. One of their objective was to support agriculture and industry in their regions.

DARPA set up the Information Processing Techniques Office in 1962 as a major funder of university research. The Office and the National Science Foundation focused on computer science, a discipline that was just emerging at the time. One of the programmes it started in the ’60s led to the creation of the Internet.

Fast-forward to 1980, technology transfer from universities to business came was fostered by the Bayh-Dole Act, which enables universities, nonprofit research institutions, and small businesses to own, patent, and commercialize inventions developed under federally funded research programs within their organizations. The act ultimately motivated more universities to become actively involved in the transfer of technology from the lab to market.

American universities have continued this policy-backed tradition and the country is better for it.

Policies are deliberate, but funding is sometimes impulsive and aimed at improving approval ratings in a political dispensation.

Kunle Olukotun, a Nigerian Professor at Stanford has successfully commercialized different ideas. He started Afara Systems (acquired by Sun, which was later acquired by Oracle), SambaNova and Mines (recently), all as products of his research. He wants Africa to invest more in research and innovation to enable the continent proffer required solutions to its challenges.

The African Startup Space

Although Africa can be proud of solutions startups on the continent have introduced over the past decade, there is more to be done to ensure they are able to make it beyond the early stages of their business.

While the existing model of private-led innovation growth is working in Africa, it will work better if government’s involvement goes beyond improving access to finance and providing motivational messages. The government should review policies that are antithetical to the growth of small businesses startups and encourage collaboration with research institutes and universities.

The American model that saw startups thrive is still relevant and African governments should consider toeing a similar path.

Imagine a startup created out of a government-funded agricultural research, conducted at the International Institute of Tropical Agriculture (IITA), with the scientist that led the research teaming up with a developer to create a tech-led solution that can increase the yield of a particular crop yield. If the government engages such startup to help farmers improve their yield for two years rather than provide free seeds for the farmers… imagine the possibilities.

Imagine the availability of research grants in universities. Imagine that research work in universities do not end up in trash bins because there are funds to push the very good ones forward. Imagine the possibilities.

Imagine that Nigeria’s recently signed ICT deal with China will bring fast internet that startups in the country can use at a very low cost. Imagine the possibilities.

Imagine a government-funded innovation city where an independent power plant ensures constant power supply. Imagine the possibilities.

And lastly, imagine the formulation of policies that will encourage private sector investment to provide all these things. Just imagine the possibilities.

Also published on Medium.