In Summary
  • Some of what Europe is doing to attract talent and foreign direct investments does not even require money.
  • The United Kingdom, which was a front-runner in creating technology hubs, is reaping big returns from the sector.
  • Inasmuch as civil society helps countries in many ways, it will never drive economic growth. 

At the close of the Global Learning Conference on the Future of Learning in Berlin, we were taken around to visit start-ups within the city.

Young Germans are challenging the status quo, including pedagogical methods used in existing universities.

A start-up university is introducing practical project-based degree programmes that enable students to develop an entrepreneurial concept, work on it, and gain valuable experience.  

By the time the students are through with the programme, which has virtually integrated industry and academia, they are as good as any experienced person.

At the same time, cities in Europe have woken up to emulate the success in Silicon Valley. In Paris, billionaire businessman Xavier Niel has invested $285 million (approximately Sh30 billion) to set upStation F and hired experts from Silicon Valley to run the incubation facility. 

While launching the facility, TheNew York Times reported on June 23 that President Emmanuel Macron urged the French to make their country “the leading country for hyper-innovation.” He encouraged the crowd of entrepreneurs to “transform” and “shake up” the country. On its part, the French government committed to support entrepreneurs through a number of incentives including, making the country more business-friendly.

In what looks like a response to the new US policy of “America First,” the French government willfast-track visasfor international talent, their families, as well as entrepreneurs. In a direct effort to lure talent, the government will provide relocation grants and free office space. 

GROWING APPETITE

To stimulate the tech sector, the government created a $45 billion French Tech Acceleration Fund through the public investment Bpifrance.  In addition to these earlier funds, the Macron administration is adding another $11 billion to the fund and has identified13 citiesthat will become high tech hubs. On tax matters, the French have allowed innovative new companies tax exemptions amounting to $18 billion for 6,600 start-ups since 2004. 

Entrepreneurs need more, and President Macron in his short period in office has responded by pledging, as reported in the New York Times, “to exempt ownership of company stakes from France’s wealth tax and introduce a flat capital gains tax of 30 per cent down from as high as 50 per cent now.” 

With these incentives, global tech giants have responded. Virtually all the big tech giants including the giant French game publisher Ubisoft have committed to set up in Station F. Up to 1,000 firms are rushing to get space in the new facility innovating in a range of areas including artificial intelligence, food technologies, high-tech fabrics and many other sectors. 

The story of European start-ups is the same across capitals. New venture capitalists are emerging to support the growing appetite for entrepreneurship and they are succeeding. The United Kingdom, which was a front-runner in creating technology hubs, is reaping big returns from the sector. According to Tech Nation, a government report says that, “technology industry grew a third faster than the rest of the economy from 2010-2014. The sector now accounts for 1.56 million jobs, and generated £161bn (Sh23 trillion) in 2014.” 

HANDFUL OF GOVERNMENTS

The UK’s technology sector is perhaps second to the United States but it is slowly moving ahead by becoming one of the most influential locations. The British government has come up with tax and legal incentives and is allowing work visas for talent. There is a reasonable pool of investors, from seed to second stage funding.

Virtually every African country has some sort of tech hub (see map below) but most of these technology spaces (118 out of 173) are supported by civil society.  Only a handful of governments support this emerging tech sector. These include South Africa, Angola, Mozambique, Mauritius, Ghana, Morocco, Egypt and Senegal.

Just a few academic institutions have developed innovation hubs. According to a GSMA report, 50 per cent of the tech hubs are from 5 countries: South Africa, Kenya, Nigeria, Morocco and Egypt.

Let us face one fact, however. Inasmuch as civil society helps countries in many ways, it will never drive economic growth.  There are limits, especially when it comes to hiring talent to develop competitive products.

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