5 th Global Forum on Innovation & Technology Entrepreneurship East London, South Africa (30 th May,...

5th Global Forum on Innovation & Technology

Entrepreneurship East London, South

Africa (30th May, 2013)

Session on: Public Entrepreneurs & Flagship Initiatives

ByEng. George Mulamula

CEO DTBi & Senior Govt. Advisor Tanzania

Presentation Brief Economic Country Profile Entrepreneurship Ecosystem Domain &

Stakeholders Synopsis of Tanzania Entrepreneurship

Environment Challenges in Tanzania Entrepreneurship

Ecosystem Flagship Initiatives to address challenges Expected Benefits Conclusion

2%th Global Forum: Entrepreneurship & Initiatives by Mulamula

Brief Economic Country Profile (1/3)

Tanzania has Vision 2025, objective:•High quality livelihood•Peace, stability and unity•Good governance•A well educated society•A strong and competitive economy

In a population of 45Million, GDP per capita of $527 and GDP growth rate of 7%, with SMEs estimated to contribute around ⅓ of GDP (NBS & WB Statistics)



Unemployment, and improving the skills of the labour force are imprinted on the government agenda as part of the 2025 development vision

The Ministry of Finance and Economic Affairs runs several initiatives focusing on unemployment, along with supporting institutions related to education and vocational training.



• Exports total 21.7% of GDP, main commodities are cash crops, primarily tobacco, cashews, coffee, cotton, tea, gold, diamonds, cloves and sisal

• Imports total $11.2bn p/a, and key imports include oil, machinery, transport equipment, raw materials, and consumer goods

• Even with national fibre backbone, national computer penetration very low compared to about 83% mobile penetration


Entrepreneurship Ecosystem Domain &

Stakeholders (1/2)• Policy (Regulatory framework and incentives,

enforcement and property rights, etc.) - Government• Culture (Tolerance for risks, mistakes & failures,

innovation, experimentation, etc.) – Public & Private Sector

• Capital (Micro loans, venture capital, public capital markets, Angel Investors, IP Assets etc.) – Financial & Private Sector

• Markets (Distribution channels, expertise in production, entrepreneurial network, etc.) – Public & Private Sector


Entrepreneurship Ecosystem Domain &

Stakeholders (2/2)• Human capital ( Skilled labour,

entrepreneurship training & professional training, etc.) – Learning Institutions & Private Sector

• Support /Business Development Services and capacity development (professional services such as accounting legal and technical experts etc.), including Infrastructure (telecoms, energy, transportation incubation, fibre backbone, etc.) – Public & Private Sector


Synopsis of Tanzanian Entreprenuership environment

(1/5)

8

• Following independence in 1961, Tanzania implemented a socialist state – now in a modern day Tanzania, post-Socialist legacy is still manifest in the business sphere• Lack of acceptance towards entrepreneurship

which is slowly being overcome• Entrepreneurship is still seen as a ‘last resort’ for

those who can’t secure formal employment



(2/5)

9

• Other practical obstacles to establishing entrepreneur start-ups (which leads to many Enterprises remaining in the informal sector) include:

- Cumbersome registration processes, the process often takes much longer, and involves dealing with multiple government departments with limited communications channels. (Now foreign company investments use a 1-Stop Centre at TIC)



(3/5)

10

- Difficulty recruiting and retaining few skilled workers with a strong work ethic

- High costs of supporting infrastructure- Lack of practical skills and tendency to ‘copycat’

successful businesses- Difficulty in getting seed funding & tendering

bonds• Within the informal sector, there is a 60:40 split

between rural and urban owned businesses respectively 10%th Global Forum: Entrepreneurship & Initiatives by Mulamula


(4/5)

11

Financial Support• Government recently increasing access to capital for

SMEs (through PM’s Office & Ministry of Finance), as difficult for the majority of the population to access funding from a commercial bank• Access to microfinance institutions (MFIs) requires

collateral such as a house, land or a car, which many do not have access to. • Alternative is the forming co-operatives, with the

group acting as collateral in the eyes of the lender (MFI)



(5/5)

12

Focus on youth entrepreneurship• 53.3% of unemployed persons are under the age of 35,

with unemployment lower amongst rural youth (32%)• Amongst unemployed youth (15-24), approximately 57%

are female. • Unemployment levels are 1-3% amongst university

graduates• The Ministry of Labour, Youth & Sports developing Youth

Policy, administers a Youth Development Fund and a Small Entrepreneurs Loan Fund targeted at youth and other vulnerable groups. (Still requires more tangible action and attention from the government) 12%th Global Forum: Entrepreneurship & Initiatives by Mulamula

Challenges in Tanzania Entrepreneurship Ecosystem(1/2)

Lack of entrepreneurship policy, even though good SME policy, while corresponding policies not entrepreneur support “friendly”

Failure to translate entrepreneurship tendencies to curriculum (change in our education system towards entrepreneurship)

Lack of adequate mentorship/coaching to entrepreneurial start-ups and exposure to role models

Limited skills (managerial & technical) 13%th Global Forum: Entrepreneurship &

Initiatives by Mulamula

Challenges in Tanzania Entrepreneurship Ecosystem(2/2)

Mindset towards record keeping, innovation, quality and compliance still low

Low appreciation of the value/use of expertise in business for most entrepreneurs

Low level of economic and financial literacy Poor infrastructure e.g. Power, road network

etc. Though some of the business operators run

multiple businesses, graduation from micro to medium is rare


Flagship Initiatives to address Challenges (1/4)

Teknohama Business Incubator (DTBi): Incubator to build entrepreneurs with provision of full range of business development services and capacity building

• Tanzania Open Data Initiative under OGP (President’s Office): through technology & innovation create entrepreneurs utilising machine readable open data for transparency, citizen participation, accountability and integrity. (Tanzania has just finished an eReadiness Open Data assessment) 15%th Global Forum: Entrepreneurship &

Initiatives by Mulamula


START Skills Programme (COSTECH, WB): program bringing together universities students, the public and private sector to develop and create sustainable enterprises that are ICT-based solutions in real-life settings. Has component of entrepreneurship and innovation

using open data to be made available through OGP building

Capacity building for visualization of such data (mobile and web) to allow the delivery of services and feedback from the citizens for better governance.



Innovation Fund (COSTECH, UK DFID, DTBi & TANZICT): To address the “valley of death” syndrome, an innovation fund for entrepreneurs being set up, to be operational in Q4 2013. Currently there is a little seed money being given

to Start-up entrepreneurs who are innovative with a “bankable idea”



New Innovation programme in developing policy & projects (WB, DTBi, Aalto University & COSTECH): to support the above initiatives through building capacity in delivery of the Tanzania Open Government Action Plan through promotion of open and collaborative models on innovation and a culture of open data. Implementation to be by effective organizational

arrangements, stakeholder ownership, policy makers & using appropriate instruments and feedback mechanisms.


Expected Benefits (1/2) Development of mindset and enterprising culture

among the youth, women & citizenry Increased entrepreneurship training in Learning

Institutions Critical mass of youth having appropriate skills (soft

& hard) to be creative, innovative & entrepreneurial Policy statement & strategic project implementation

having positive impact on Entrepreneurship & Innovation ecosystem

Increased numbers of MSMEs with high involvement of women and youth, creating jobs & wealth


Expected Benefits (2/2) An innovation/entrepreneurial policy &

enabling legal/regulatory framework from Government with supportive institutions towards entrepreneurship activities

Use of ICT in innovation & entrepreneurship, both as a tool and an enabler, while tapping the use of open data to achieve Tanzania’s Vision 2025 and being part of “code4africa”


Conclusion The process is designed to unleash the

creativity and innovation of our youth & nationals in order to find solutions for Tanzania’s pressing socio-economic problems through the lens of viable and sustainable entrepreneurship

Tanzania Govt. is dedicated to creating a viable innovative & sustainable entrepreneurship ecosystem

Partnerships are important and all are welcome to partner with Tanzania in realising her vision 2025

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%th Global Forum: Entrepreneurship & Initiatives by Mulamula

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5 th Global Forum on Innovation & Technology Entrepreneurship East London, South Africa (30 th May,...

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