Entrepreneurship is a powerful mechanism for economic and social development, generating income and jobs, while enabling and enriching individuals and communities. This awareness has prompted a significant shift in focus among policymakers, and today, entrepreneurship is a core aspect of many National Development Programs globally. Entrepreneurs are responsible for coming up with ideas and leveraging technology to create solutions, and the government is responsible for creating an economic environment where their innovations can thrive.
Over the years, the Nigerian government has shown increasing appreciation for the role of innovation in socioeconomic development. Government agencies and institutions such as the National Investment Promotion Commission, National Information Technology Development Agency, Bank of Industry, and the Ministry of Communications and Digital Economy all have a role to play in the creation and implementation of policies relating to entrepreneurship. In response to the global health crisis, the government can develop more entrepreneurship policies, particularly as startups and scaleups continue to demonstrate their economic value by contributing to lifesaving solutions for businesses and families.
In October 2019, Endeavor Insight, Endeavor’s research arm, launched a large-scale research initiative to study government support for digital entrepreneurship around the world. The purpose of the exercise was to explore global and regional trends among national governments supporting tech entrepreneurs, and to identify the best public initiatives to support entrepreneurship. The average country had 12–15 government programs to support entrepreneurs. When Endeavor Insight analysed the common traits across these programs, six main themes emerged.
National entrepreneurship programs from 35 countries, across Latin America, Africa, the Middle East, Europe and Asia, were included in the research:
Argentina, Australia, Brazil, Canada, Chile, Denmark, Estonia, Finland, France, Germany, India, Indonesia, Israel, Italy, Japan, Kenya, Mexico, Netherlands, Peru, Portugal, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand, Turkey, UAE, Ukraine, Uruguay, USA, and Vietnam.
NATIONAL ENTREPRENEURSHIP STRATEGIES HAVE A STRONG FOCUS ON DIGITAL AND TECH-ENABLED BUSINESSES
Over 90 percent of the countries in this research had digital or tech-enabled entrepreneurship at the core of their entrepreneurship support policies. These efforts include a large number of specialized incubators and investment funds, grants, as well as unique programs like Estonia’s consulting services for intellectual property protections; France’s tax credits for R&D expenditures; Italy’s €1 billion innovation fund; and Taiwan’s initiatives to release public data as training sets to support the development of machine learning technologies.
Earlier this year, the Nigerian government announced the approval of a $20 million tech fund, approved by the Bank of Industry, to support young entrepreneurs. While the value of the fund is less than other national tech funds globally, it is a step in the right direction. As the health crisis roars on, government agencies like the National Informational Technology Development Agency are stepping in to support the technology and innovation ecosystem. The solutions provided by Nigerian startups and scaleups in response to COVID-19, serve as a catalyst to propel government focus towards providing more dedicated support frameworks for tech-enabled businesses.
THERE IS A TREND TOWARDS THE USE OF MORE ONLINE CONTENT IN ENTREPRENEURSHIP SUPPORT
An increasing number of governments are providing online courses and video content to help entrepreneurs, especially at the earlier stages of their trajectories as founders. Countries like Sweden and Germany have developed comprehensive websites to help entrepreneurs at all stages, from company registration to fundraising to building a network, to international expansion. The Colombian government has partnered with a leading Colombian online education company to open up free access to some of their most popular courses and help citizens learn skills that might help them find employment in the digital economy.
Similarly, in March 2020, the Ministry of Communications and Digital Economy announced its partnership with IBM to provide Nigerians with over 280 hours of free learning on key emerging technologies. The Bank of Industry’s Youth Entrepreneurship Support Program also provides online modules and mentorship for entrepreneurs between the ages of 18 and 35 years. It is equally important to create similar initiatives targeted at more mature entrepreneurs who are leading scaleup companies. These scaleup entrepreneurs have successfully demonstrated their ability to harness and utilise technology, and therefore require more specific guidance and solutions.
NATIONAL GOVERNMENTS ARE INCREASINGLY SHIFTING THEIR FOCUS FROM EARLY-STAGE COMPANY SUPPORT TO LATER STAGE COMPANY SUPPORT
The aspiration to produce more companies at scale is often tied to a discrete goal to produce more unicorns (companies valued at $1 billion or more) in the country. To help more companies reach a billion-dollar valuation, governments worked to establish close ties to international investors and assist founders with international expansion.
For example, Israel runs bilateral programs to facilitate collaboration between local and foreign tech companies. On a Swedish government website for entrepreneurs, founders can find information on trading in goods and trading in services, standards, certification, export financing, transportation and logistics, and even Brexit.
When we examine the companies that have provided the most innovative solutions for Nigerians — from renewable energy, to film, healthcare and digital payments — they are the same companies that have been able to generate jobs and even expand into other countries. The priority should be to sustain these scaleup companies and ensure that startups have access to the necessary incentives, tools, and networks that can propel their growth.
MORE GOVERNMENTS MAKE EQUITY INVESTMENTS IN LOCAL COMPANIES
Many of the interviewed policymakers mentioned that they are increasingly involved in efforts to support entrepreneurs by increasing the number of equity investments in local companies. Accelerator programs are the most common way that national governments increase the number of investments in entrepreneurial companies. Many of the publicly funded accelerators found in the research were modelled after internationally recognized private incubator and accelerator initiatives like Y Combinator, Techstars, and 500 Startups. Several interviewees across Asia and Latin America mentioned they modelled their investment programs after the Israeli Yozma initiative of the 1990s, which used public funding to attract foreign investment to Israeli businesses.
There are a number of existing incubators and accelerators that can be more productive with government support. Back in 2015, Co-Creation Hub launched its growth capital fund with support from the Bank of Industry and other partners. More public-private partnerships will provide policymakers with relevant information that can support the development of unique entrepreneurship policies.
NATIONAL GOVERNMENTS OFTEN OFFER ENTREPRENEUR VISAS AND FOREIGN ENTREPRENEUR SUPPORT
Nearly half of the countries in the sample offered entrepreneur visas, and even more offered programs to support foreign founders through soft landing programs and other types of assistance to encourage foreign founders to establish a presence in their countries. Among many others, Israel offers a long-term visa for foreign founders; Taiwan offers an Employment Gold Card for three years, which includes a residency and work permit; France recently introduced a ‘tech visa’, which extends not only to startup founders, but also angel investors and employees. Some countries, including Estonia, created easily accessible English-language websites and materials for foreigners who are considering relocating to Estonia to start companies.
The Nigerian Immigration Service currently offers four main visa categories, which is less than the selection for many countries. Additionally, none of these visa categories targets entrepreneurs who want to do business in Nigeria. There is a need to revise visa policies for expatriate founders in order to reflect global trends and contribute to providing a “soft landing” for entrepreneurs.
MORE GOVERNMENTS ARE MAKING INVESTMENT IN DATA TRACKING AND RESEARCH
As entrepreneurship support is becoming an increasingly prominent aspect of national economic strategies around the world, most governments are investing in solutions to track entrepreneurial companies, investments, job creation, and success stories in their countries. In the absence of customized software, many governments have been investing in developing their own data platforms to manage and analyse data. Similarly, governments are increasingly investing in research to better understand what types of entrepreneurship support are most conducive to economic growth.
A comprehensive dashboard that tracks macro-level information on economic outputs, investments made, and jobs created will provide Nigerian policymakers and entrepreneurs with more information to make data-driven decisions.
Policies are vital to sustaining productive entrepreneurship communities because they offer strategic direction for the tactical implementation of any initiative. Without concise and effective policies to support entrepreneurs, Nigeria’s entrepreneurship ecosystem could face an overall setback, meaning that fewer jobs are created and entrepreneurs may seek to establish themselves in other African countries.
The Nigerian government promotes entrepreneurship because it is a bedrock of economic growth, but it also needs to provide an enabling environment for founders and their innovations to scale because the entrepreneurial success of any nation depends on the policies of the government. Policies that address infrastructural, financial and fiscal challenges must have mechanisms in place for effective implementation.
This article summarises ‘Trends in National Entrepreneurship Policies’, a research initiative by Endeavor Insight, Endeavor’s research arm.