Towards a Dynamic, Collaborative Ecosystem

From coordination to true ecosystem synergy

Academic attention has been biassed towards social entrepreneurship and social enterprises rather than commercial scaling. There are also broader challenges in aligning academic and practitioner activities. The academic model is incentivised to ensure insights are published in leading journals rather than to share data, knowledge, and directly engage with practitioners on the ground. Practitioners, by their nature, move faster than academics. They’re building, inventing, and pushing limits. Academics operate differently; their institutions demand rigour and conservatism, which leads to a perception that they are slow. In comparison, practitioners may appear loose, over-eager and unreflective to the academic community. Often they are talking in different languages, despite having shared ambitions. These gaps can - and should be - be closed. Academia should identify experts to help build incentivised bridges (as they should not expect scaling ventures to take the lead, even if both sides could benefit from a revised construct).

From an ecosystemic perspective, there is also a disconnect between academics, their institutions and entrepreneurs. A number of factors contribute, including the absence of anchor institutions, like universities or a pan-African entity of some kind, to act as the critical foundation elements for ecosystem development.

“Academic knowledge is not shared directly with entrepreneurs which prevents learnings: many academics talk to lots of small businesses. They do lots of interviews and surveys, write the paper, publish the results, and it sits in an academic journal. They never share. There’s no motivation to share these insights with the entrepreneurs.” - interviewee 

The former executive director of the African Network for Drugs and Diagnostics Innovation (ANDI), Solomon Nwaka, goes further by criticising African research funding as way too upstream and too institution-driven. He identifies a huge gap in bringing academic innovations and research to the market for commercial application. He also suggests that the problem is that Africa thinks it is doing technological innovation, but it is not - it is social innovation. 

The patterns of research collaborations in Africa indicate very little intra-African collaboration. Donor-driven initiatives to promote African consortia are too small to make a dent; and the research funded is too upstream. What’s missing in all this is strong national financing mechanisms for research, through which governments can be deliberate in their disbursements of funds. What is needed is an indigenous financing mechanism to stimulate intra-African collaboration, especially if efforts can align to the priorities of commercial interests. Whilst some mechanics help bring researchers together - notably OPEN AIR and Africa Tech Research, far more could be done to align industry and academia in support of scaling firms, in particular.  

Excellent research models are proven to deliver. Stanford University’s Venture Capital Initiative brings together faculty, staff, students and practitioners to advance teachings on innovation and venture capital. Its goal is to advance understanding of venture capital and innovation ecosystems through conducting research, collecting high quality data, and developing teaching methodology. Its aim is to bring together leading academics and practitioners to help solve the problems that are highly relevant to entrepreneurs, financiers, policymakers, and researchers worldwide. Africa needs a similar focus.  

Efforts should be aligned around impact - the banner around which both practitioners and academics can rally. A strategic collective - featuring universities, research institutions, government agencies - could lead a dedicated process (with major financial support coming from donor funding and/or a (international) government agency. This would promote shared learning, new collaborations and connections around key data themes, with deeper (and better) inquiries developed, for broad mutual benefit and collective gain.

The iceberg model of systems thinking is a way of understanding the origin of a problem. Not simply reacting based on an event, on what’s visible, but going beneath what’s apparent and unravelling the motivations that caused the problem to exist in the first place. By applying a four-step model, you reach the core issue and find a better fix. The core concept of systems thinking is to help you see under the hood of structures, groups, organisations, and spot what are the real incentives. The iceberg model provides an easy-to-follow framework that helps you find the motivations and what actually caused the behaviour to appear. This helps us uncover the root causes associated with problems, as indicated by Figure 29.

“It’s about becoming an ecosystem - to bring all of these players together and educate and understand - what it takes to build a scalable business for Africa.” - interviewee

The prevailing practice of implementing activities in silos restricts the flourishing of multiplier and network effects that would exponentially benefit the entire ecosystem. Beyond efficiency and effectiveness challenges, substantive value creation opportunities can be derived should critical synergies between and amongst actors become properly addressed.  

We have purposely generalised ecosystem collaboration in Figure 30. Clearly some areas have greater (or less) coordination and partnership development than other aspects, but the notions of “spray and pray'' and “hit and hope” are evident due to the prevalence of individual entities acting in uncoordinated and unmeasured ways, often in silos. Improvement in collaborative attitudes and behaviours (and the perceived and real value of co-participation), amongst other factors, can in time lead to opportunities for synergised syndication.

The (projected) multiplier outcomes associated with change (and some of the associated tools) are indicated in Figure 31. At the top of the pyramid are the multiplier benefits derived from synthesis of activities (which is a step beyond collaboration, which can too frequently be thin, loose, transactional, time-bound, and conditional).

Figure 32. depicts the critical (mindset) shifts that will be needed, alongside normative principles, systems change factors, and innovation leaps which may lead to potential collective functions and shared resources that could underpin true ecosystem partnership. 

Head of Investments at at a leading accelerator acknowledges the change dynamics at play: 

“Naturally you evolve from competitive to a semi-collaborative environment, until eventually people realise that the only way to reach sustainable growth is to grow that overall pie (rather than increase an individual piece of the pie) through collaboration. But that's an evolution over time. In the private sector and in our world of startups, if you have a belief - at this stage - that it's a zero sum game, then you are going to be competitive. We are largely still in that phase. I do believe that this will evolve, as the market gradually grows, and the overall size of that pie increases.” - interviewee

It is acknowledged that more connected ecosystems are stronger and grow faster. It has also been suggested that African leaders should support ecosystem players and launch a pan-African tech startup network to strengthen and support tech startups because founders are missing out on the support, advice, openings and knowledge exchange so vital to their existence. An accountable mechanic to share best practice and knowledge exchange, and address collective issues would certainly be beneficial, if constructed in the appropriate way.  We are, however, already seeing evidence of improved regional collaboration. As an interviewee told us, “the South is a tight unit, as is the East and West. But we're not yet starting to see that crossover.”   

Improved coordination mechanisms can enable key actors to pull together around common system related goals can also disincentive self, esoteric, conflictual interests. A systemic collective innovation capacity that works at a system level and not just in small pockets of the system.

Our interviews with ecosystem experts revealed a broad range of interests: 

How might we promote more collaborative working? 

“I envision that you need to establish more multistakeholder consortiums working together - in syndication as a group of entities - to solve specific problems on the continent. Whether this be around food, or technology, access to banking, fintech.” - interviewee

“It's about connecting intelligence, ideas, and people together in the right way at the right time. The power of smart convening. Finding channels where people can connect. It's about actually being much more specific around how you create and allow serendipity to happen. This can happen, but only if you design the pre-work really well, so the magic can happen in the room.” - interviewee

How might we structure a collaboration mechanic? 

“The trick is that it has to be self-governing, self-initiated by the group who's got the need to see this be successful. They need to have the support, the systems, and the platforms to be able to execute on that. The last thing you want is Europeans to come along and tell us how to run these trade exchanges - it's not what we’re asking.” - interviewee

“I do have hopes that you might be able to help bring us together, especially around a clearing house concept. Hopefully we can start to address system change when it comes to scale. I feel like often we just touch the top of the pyramid. And we don't address the bottom. We need to be very imaginative and very brave to break through. I think as a newcomer - or someone who's coming neutral to this - will be able to help provide more ideas.” - interviewee

“I'm not a big fan of setting up institutions to solve ecosystem problems, because that can become a bottleneck, in most cases, especially for founders. We are setting ourselves up as an ecosystem player - to become the backbone that collectively contributes into this ecosystem. That is an approach which Africa needs to take, as opposed to creating an institution or few institutions driving this outcome.” - interviewee

“How do we enable business models? How do we educate the ecosystem, both on the founder side, but also on the buyer side (which could be corporates)? How do we bring these two together?” - interviewee

The ecosystem needs to rethink how it: 

• gathers and curates data;

• spots potential links;

• interprets patterns; and 

• attempts forecasts of emerging technologies or demands. 

And how it deploys and diffuses knowledge in the right way. 

New strategic thinking would be beneficial as there are clearly large blind spots concerning the orchestration of business intelligence especially. Properly assessing what the knowledge (supply/demand) variances are and where information asymmetries gaps exist is essential. Better coordinating functions are needed to support scaling ventures in particular. It’s debatable whether the existing infrastructural mechanics will be able to solve adequately given the institutional failures and the lack of proactively addressing the barriers and bottlenecks which currently exist. 

Important efforts must also be acknowledged, such as the recent development of the African Startup Hub, which is a step in the right direction. Jumps, then leaps, are necessary.  

The development of additional ecosystem functions would benefit from detailed design thinking and system analysis to build out a series of demand-led pathways. Our interviews captured a number of important principles which any scaling collective may wish to factor into development phases.   

Objectivity 

“If there's an honest broker - a clearing house - which provides scale tools to use to help entrepreneurs find the best path and appropriate solution, this might allow us to reduce duplication and waste.” - interviewee

Concierge service(s) 

“There’s less of a need to create more knowledge, and more of a requirement to create a concierge, so that people can access the knowledge. ‘Concierge’ would involve curating these pathways, pointing people in the right direction. There is a space to help people find ways forward and systematise how people access this information.” - interviewee

“Potentially a kind of database of recorded sessions that don't require additional output from the more experienced entrepreneur, like navigation around particular frameworks." - interviewee

Accessible, relevant, timely knowledge 

“We want a platform where the best kind of toolkits get contributed and startups can go there as a “what next?”, “How can I scale?”, “What are some of the playbooks available to me?”" - interviewee

“If anything, there should be a Netflix of everything you need to know in a startup. It's four seasons, watch all of these end to end as you have time, and you now know everything you need to know. Here's your startup bible, season 1, 2, 3, 4.” - interviewee

“I would say a genuine database of FAQs where we all face similar problems.” - interviewee

“Make it downloadable for free. Then every other organisation will copy and put their logo on it and it will spread.” - interviewee

“The problem is, as soon as you start to create content, that content needs to be maintained. So content is probably a risk with this proposed approach. You'd need to have a living breed of people who are constantly exchanging, rather than having something static. And constantly update the material on your site, as it becomes redundant very quickly.” - interviewee

“It has to have an easy framework, which could explain it to the dumbest person in the world. That's the best way to spread information.” - interviewee

“Make it a debate so that people can actually ask themselves, am I ready to scale? And do I have the skills to scale? Make it simple and accessible, through infographics. Make it credible, simple, and then spread it.” - interviewee 

“There is a market for some sort of think tank.” - interviewee

The entrepreneurial ecosystem lacks a structured intelligence function which we believe merits greater exploration. Whilst organisations such as Future Africa, Briter Bridges, Partech and others have taken leadership developing important snapshot reports, these are episodic. Recommendations may often be made, but with no coordinating function, the prospects of follow-through (the hard yards of innovation), and the implementation of change will be far lower than it should be.     

African countries do not have enough dedicated policy research institutes to help address the challenges they face. They often have to rely on policy ideas coming from abroad. The few think tanks which exist rely on very traditional business models that make them expensive and inflexible. 

Sensibly, most if not all of the Africa programmes at major Washington think tanks are run by diaspora Africans. The Africa-Europe Foundation sectoral Strategy Groups are mandated to build a commonality of purpose, leverage joint partnership actions, and provide strategic foresight. Yet efforts frequently focus on group thematic issues, rather than providing tailored guidance for commercial scaling ventures. Too often research appears theoretical, unapplied, and disconnected from the reality of scaling ventures. This should change. 

A Private Sector Development Research Network - a community of institutions with an active research agenda - also exists, but it is questionable how effectively it operates in practice. We note its website was last updated in September 2021. 

The African Capacity Building Foundation (ACBF) and international governments should work to support a think (and do) scaling support model, as informed by experts, such as On Think Tanks. Instead of replicating tactical acceleration models, efforts could be prioritised toward a strategic response by focusing on a dedicated commercial scaling community of practice and think-tank advisory body, which effectively mobilises research, develops policy against emerging technology, tests ideas, and leverages networks and skills. Advocacy alone has its role, but clever thinking is needed to shape new futures. 

A new model could involve both public and private actors, alongside strong peer networks – both formal and informal – to advance knowledge, build trust and confidence between various actors. Syndicated approaches (truly bringing different or new partners together to solve problems in new ways together) are the most helpful. Processes should be designed by innovation experts (not academic or theoretical approaches), leveraging technology solutions, with clear commercial objectives and outcomes.

“We would like an institution - out of the country - which would provide knowledge in ways that can be applied. And after people begin to see it is working, then the local universities will begin to understand that what they were doing is wrong.” - interviewee 

Systems-change innovation assesses complexity due to the multiple stakeholders, dependencies, contingencies and interdependencies required. A robust and comprehensive means of cataloguing, assessing and apportioning variables is useful in providing the right information to inform management and policy judgements. But there are significant knowledge gaps and an absence of practical pathways to take forward activities. This should not be the case. 

Scaling ventures, governments and investors should together employ technology visioning and scenario planning approaches to stretch toward bigger horizon goals. Through challenging conventional ‘straight line’ planning, it’s possible to pry attention away from the ordinary, expected and orthodox. It forces into consideration not only best-case scenarios, but also the disastrous and ruinous. The very process of thinking about a range of possible futures can be a useful opportunity for addressing issues that are often otherwise neglected. Too rarely do organisations properly assess the kinds of threats and opportunities that might occur in turbulent, unpredictable, and ambiguous settings, instead over-relying on prevalent trends or patterns as indicators of what will occur in the future. As is evident in this “next normal” paradigm, the flaws in this approach are painfully vivid for all.

Reliance on the rear-view mirror as a barometer of the likely outcome of future activity is painfully inaccurate, something brought into sharp relief for almost every organisation on earth during the ‘black swan event’ triggered by the Covid pandemic. Most organisations are utterly underprepared to deal with both the initial shock-response and the adaptations necessary for future operations. More so, organisations and critically key staff are uncomfortably disrupted and interrupted whilst the organisation attempts to rectify. Innovation specialists challenge pre-existing assumptions, and help organisations galvanise around a common view of the future and provide the basis for actionable steps to bring the future closer, faster. 

Networked organisations such as Envisioning.io help businesses and public entities anticipate the impact of technology so that they make better decisions today. Figure 33 illustrates techDetector - a platform that intends to bridge the gap between sustainable development challenges and accelerating technologies. The project was a partnership developed with GIZ.

No single organisation represents the interest of scaling ventures in Africa. No collective alignment inhibits the strength of advocacy-related efforts. Whilst some coordination efforts are working, such as the Digital Collective in South Africa, particularly with respect to the drive to improve startup legislation across Africa, often these groups are ad hoc, under-resourced, and undertaken on a voluntary basis. Collective agency is unquestionably a powerful force. Useful research - albeit global,  not African specific - has been undertaken by the consultancy firm FSG which suggests a greater need to disrupt both internal and broader political power dynamics for collective impact which leads to equitable changes in systems and structures.

More radical strategic initiatives, which solidify representative actions, would be highly beneficial so that the sum of the individual parts of the ecosystem is much greater. This is not simply about a lobbying and advocacy trade association function. There are excellent new models being designed to improve ecosystem collaboration and representation, applying different digital tools. 

The proverb - that it takes a village to raise a child - is well known. Rather than relying on the antiquated methods, driven by the “usual suspects”, the entrepreneurship ecosystem should apply innovation design principles and lay new architectural designs to ensure scaling ventures begin to seriously “punch their weight” and gain the influence which they will unquestionably deserve in the future.     

Open organisations abide by principles around transparency and clearly defined decision-making structures, ownership patterns, and exchange mechanisms; designed, defined, and refined by collective members as part of a continual transformative process. Greater decentralisation enables the transfer of planning and decision-making functions of an organisation away from a central, authoritative location. Research shows this encourages both inbound and outbound open innovation.

New models are being established in Africa, such as the Waya Collective - a decentralised autonomous production network, which is a new approach to industrial production via a network of autonomous enterprises, which are entirely locally owned and emphasise sustainability and efficiency. Traditional structures for ecosystem coordination have serious limitations. Yet few actors know, or appear keen, to imagine alternatives. It will be a missed opportunity if innovation hubs fail to introspectively reframe their own functionality to test, then apply, break-through change principles. 

The three horizons framework - featured in McKinsey’s “Alchemy of Growth” — provides a structure for organisations to assess potential opportunities for growth without neglecting performance in the present. Horizon One represents improving performance to maximise value. Horizon Two encompasses emerging opportunities, which could require considerable investment. Horizon Three contains ideas for breakthrough innovation, akin to an R&D activity. In Figure 34, we have reinterpreted the model against specific data, knowledge and intelligence opportunities associated with the African entrepreneurial ecosystem.