Explainer: What constitutes a tech hub?

Technology is driving change and development in almost every industry and area of life. It is a critical factor for modern economic growth and development.

Nigeria and other African countries trail behind in terms of technological progress compared to the developed world.

However, the continent’s show of tremendous potential and tech hubs are helping to bridge the gap. Africa’s biggest cities are witnessing the development of lively tech realities. Currently, Nigeria, South Africa, and Kenya have the highest number of tech hubs on the continent.

In 2021, Nigeria recorded the highest number of tech hubs (85) followed by South Africa, which has 80 hubs. These two nations are the most advanced technology ecosystems in Africa. Their hubs offer investment networks and well-established collaborations. Lagos, which is the top African tech hub, has more than 40 tech hubs. Kenya comes third with nearly 50 tech hubs that make it the heart of the tech ecosystem in East Africa.

New corporates and investors continue to flock to Nairobi, Kenya the silicon valley of Africa to seize the growing tech opportunities in the country. However, Egypt is quickly emerging as a technology focal point in North-eastern Africa. Besides Egypt, Tunisia and Morocco are fuelling entrepreneurship in North Africa. Several francophone countries in West Africa like Senegal and Côte d’Ivoire are registering sprouts of tech ecosystems.

Most technology hubs in Africa are offering communities the infrastructure to support and promote home-grown innovations. These hubs provide training, access to fast internet, and technical support to startups. Also, they offer social and professional networking through which tech entrepreneurs can thrive.

Nigeria, Africa’s most populous country has seen tremendous technological advancement. But the surprise in its story is that many of these ideas are still being developed on a small basis with little or no investment.

What is a tech hub?

A tech hub refers to a geographical location where there is a concentration of technological-related businesses and startups as well as supporting infrastructure and talent pool. It also involves the collection of like-minded individuals working in various business sectors but focused on the use of technology to create a unique environment where individuals, ideas and companies that support both can thrive.

According to Dario Giuliani, founder of Briter Bridges, tech hubs across African cities play a catalyst role that surpasses supporting startups. While some offer only co-working facilities, Giuliani says most hubs are safe havens for young people looking for training centres promoting digital literacy.

Just like Silicon Valley which is the world’s tech powerhouse, home to the world’s biggest technology companies. Establishing tech hubs in Nigeria will develop the tech sector which will give room for the creation of more startups that will positively impact the country’s economy.

Building a tech hub and ensuring that it delivers a reliable flow of business-enhancing tools and services requires careful planning, intelligent management, and a long-term financial commitment. Here’s how to get started.

Define your mission

Defining your mission will help you key into possibilities of the future and determine where to focus first. Things like economic disruptions, market trends, and consumer behaviour can drastically affect your business. Hence, innovating based on these factors will give you a clearer direction.

Infrastructure

Basic infrastructure such as electricity, internet access, and transportation is critical. The high cost and unreliability of basic utilities such as electricity and the internet can limit the growth and scalability of businesses

Organise management and staffing

A hub should be organised and managed by a leader who reports directly to the chief executive officer. The role should have an enterprise-wide mandate, and the individual should be well-versed in the firm’s mid- and longer-term strategy. Also, the hub director should work closely with human resources, IT, marketing, communications, and business line leaders.

Location

A tech hub can be located almost anywhere — at an existing business or manufacturing facility, a new site or even spread across multiple venues.

However, the most important thing to consider when choosing a startup hub is access to bright minds to fill the jobs that will be created. For this reason, it’s ideal to pick a city where there’s a presence of world-class universities and internationally recognised research institutes.

Read also: NGX appoints advisory panel on digital technology products

Funding

Enterprises use various methods to finance their hub operations, and operating and capital expense budgets should be centrally allocated.

Equity investment and grants are the most common types of financial support provided by accelerator programmes, according to the Afrilabs-Briter report, which surveyed 92 hubs. The criteria for investing in startups differ by organisations as they are done in line with their mandate and structure.

And while some accelerator programmes like Google for startups and African business heroes are sector-agnostic, others like Catalyst Fund, Founders Factory Africa, AlphaCode, and Facebook are targeted at companies that operate in specific industries such as fintech and e-commerce.

Collaboration

Organisations that tap both internal and outside communities tend to gather the diversity of thought and experience that together deliver the most innovative solutions.

These partnerships and collaborations stand as the support system that enables fledgling founders to validate business ideas, learn valuable skills, and be part of a community focused on tech entrepreneurship. Activities such as events, workshops, and competitions help entrepreneurs learn and stimulate innovation by bringing people together and encouraging exchange.