Africa’s technology sector faces many challenges

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A mobile money transfer service: Experts say the sector is not yet fully exploited. Photo/FILE

A mobile money transfer service: Experts say the sector is not yet fully exploited. Photo/FILE 

By Mbugua Njihia

Posted  Thursday, February 3   2011 at  00:00

The Stanford University’s Graduate School of Business held a forum focusing on business in Africa, presenting an opportunity for entrepreneurs, policy makers, lecturers and students to exchange ideas on technology development in Africa.


The conference, held this past weekend in San Francisco’s theme was Entrepreneurship as the Catalyst for Development.

Delegates explored the effect of entrepreneurship on development in the region and looked at various practical avenues and opportunities for entrepreneurial involvement.

At the mobile technology panel, where I spoke, it emerged that there was an increased interest in opportunities in the tech sector, with Kenya receiving quite a number of mentions.

The session focused on the challenges, opportunities and way forward for mobile tech.

Challenges that seem to slow the growth of the sector were identified as:

Lack of capital

While venture capital is slowly starting to settle in on promising ideas, majority of the funding is from Europe and not the US.

The opportunity for local ideas to go venture shopping in Silicon Valley was made apparent, as the return on investment for average amounts that start-up ideas are seeking was considered quite low in comparison to what start-ups in the Valley are asking.

Inappropriate business models

In Africa, we must have a different take on services that need to be pushed into market.

This attracted interested from many graduate students who welcomed the opportunity to work with Africa based firms to explore models that work.

Lack of proper research

Research and development costs money, but is still an integral component in building services and monetising them.

This can be a function that both institutions of learning and capital can support. How to interest both those institutions remains a challenge.

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