Owusu, Y. 2016. Africa's growing tech hubs and smart cities. GREAT Insights Magazine - Volume 5, Issue 5. October/November 2016.
As Africa’s youthful population become more innovation-savvy and the race to develop Africa’s technology infrastructure heats up, we look at how tech hubs and smart cities will impact the development of African innovations and the evolution of the region’s economy.
During Mark Zuckerberg’s (Facebook CEO) two-day trip to Africa last month to acquaint himself with the rising technology entrepreneurship and the evolving innovation ecosystem on the continent, he visited, among others, the Lagos-based CcHub and Andela, a development centre for technology professionals in which he and his wife, through the Chan Zuckerberg Initiative (CZI), recently invested. Other investors in Andela, which trains and deploys programmers and software developers across Africa, include GV (formerly Google Ventures), Spark Capital (Boston), Learn Capital (San Francisco) and the Omidyar Network (San Francisco).
Africa’s information technology industry has been flexing its muscles – with fiber optic technology, smart applications and innovation hubs steadily beginning to take centre stage, as the drivers of Africa’s economy gradually shift from natural resources toward human capital and innovation. A successful shift!
The number of technology hubs in Africa has increased by more than 100% within a year as demand for technology infrastructure continues to outpace supply of high tech workspace, incubation services, etc. on the continent. By the end of the second quarter of 2016, Africa had 314 technology hubs and incubation centres (in 93 cities in 42 countries), according to the GSMA’s Ecosystem Accelerator, a programme that facilitates partnerships between mobile service operators and developers in Africa and Asia.
The growing number of tech hubs across Africa highlights the demand for modern technology parks (smart cities) that helped power the tech industry in India, South Korea, China and other emerging markets in the last 30 years. Only South Africa, out of 48 Sub-Saharan African countries, is home to ‘an international standard’ technology park—Pretoria’s Innovation Hub, a high tech campus, featuring major brand technology companies and dynamic startups.
The relative success of Africa’s tech hubs has made a strong case for scaling up these mini tech hubs, highlighting the need for technology parks and smart cities. Governments and private groups in every major African economy plan to build technology parks to address the expanding demand for high tech work space, startup incubation, data centre and other tech and business services.
There’s going to be an explosive growth in co-working spaces and smart communities across Africa in the coming decades as the youth population increases (Africa’s population of one billion will double by 2050 according to the United Nations), income levels continue to grow, more young Africans acquire higher education and become more tech-savvy and entrepreneurial-minded.
Up to 13% of the tech hubs in Africa have established partnerships with mobile operators, particularly Orange (France), MTN (South Africa) and Vodafone (UK). Increasingly, mobile network operators in Africa seek to innovate more aggressively in order to support long-term revenue and profit growth.
With increased investments in fiber optic technology and rapid growth of broadband bandwidth, big data, among others, ICT has directly contributed 7% to Africa’s GDP in the last six years, higher than the global average. There are now over 50 cities in Africa with a population of more than one million each (source: McKinsey). Africa’s consumer spending in 2020 is projected to top US$1.4 trillion whilst about 50% of Africans will be living in cities across the continent in 2030. This calls for development of smarter cities and more efficient capture and use of big data and new innovations in the region. Smart city innovations would facilitate the following:
The link between big data, new innovations and the development of smart cities and its role in improving delivery of services and quality of life in Africa is gradually taking shape. Increased data access has direct impact on the type and nature of jobs demanded and produced in Africa. The demand for innovation and tech-based jobs in every software development company starting up in the last decade, such as programming, software development and management of technology has been increasing. A report published by the World Bank, the Africa Union and the AfDB pointed out that the Information technology industry is projected to be worth US$150 billion by the end of 2016.
The development of Africa’s digital economy is hampered by many factors:
Source: WEF Global ICT Report 2015
Despite these challenges, international bandwidth and data networks are increasingly becoming more affordable and available in Africa and more people have access to smart phones, PCs, laptops and other data-enabled devices. Analysts from Informa Telecoms & Media, forecast that the number of smart phone connections in Africa will increase from approximately 79 million in the fourth quarter of 2012 to 412 million by 2018.
The success and sustainability of African innovation hubs, technology parks and smart cities depend, to a great extent, on the following:
About the author
Yaw Owusu is the Managing Director of Gateway Innovations, a private Ghanaian investor/tech group that seeks to develop high impact technology parks in Africa, starting with the Ghana Cyber City.
Photo: Upcoming Ghana cyber city with a project value of US$200 million owned by Gateway Innovations and other private investors. Photo provided by author.
This article was published in GREAT Insights Volume 5, Issue 5 (October/November 2016).