Decentralisation key to supporting Kenya’s digital economy start-ups


City hall, Nairobi. FILE PHOTO | NMG

The Kenyan innovation ecosystem has matured as evidenced by favourable rankings on the 2021 Global Innovation Index and the Global Startup Ecosystem Index (GSEI).

Global tech giants such as Google, Microsoft and Amazon have set up shop in Kenya.

Visa opened an innovation studio in Nairobi aimed at co-developing digital payments and commerce solutions while Swiss non-profit, NEAR partnered with the local blockchain community, Sankore to launch a regional hub in Kenya dedicated to blockchain innovation, education, and talent development in Africa.

The case for supporting start-ups is premised on two factors; the need for new avenues for significant job creation other than SMEs as well as economic resuscitation following systemic shocks from Covid-19 as well as the economic slowdown due to the 2022 electioneering period.

Kenya’s labour market is expected to have an additional nine million people by 2025, according to the World Bank 2012, meaning between 2015-2025, the country should be creating on average 900,000 jobs annually holding all factors constant.

At the national level, Kenya Kwanza’s Bottom Up Economic Transformation Agenda on digital and creative economy seeks to lay 10,000 fibre optic backbones serving 60 percent of the population, a last-mile connection by 100,000 km on electric grid backbone that is existence and connect 24,000 markets to the internet forms the foundation for catalysing significant startup growth

At the county level, Nairobi City County seeks to lay the foundation for startup growth through simplification of licensing, the establishment of a seed fund for startups and the provision of market opportunity through the Acess to Government Procurement Opportunities (AGPO) programme.

To sustain and anchor startup support Nairobi city county through an executive order established a new county sector called innovation and digital economy.

At the heart of this approach is the decentralisation of innovation support through the establishment of sector-specific incubation centres to be located in all 85 wards.

The incubation centres are designed to be sustainable and hence must appeal or offer significant value propositions to the following key stakeholders; startups, private incubators, corporate, academia and investors.

To startups, the incubation centres will offer office space, recognition and visibility to investors and partners through a startup portal, intellectual property support, innovation off-takers either with the county through the AGPO programme or corporate partners, technology-related capacity building in partnership with big tech companies, facilitation to international startup events for pitching, market access and partnerships and access to grants and seed capital.

The incubation centres will also offer a pathway for the commercialisation of intellectual property that is untapped in Kenya’s institutions of higher learning and create a sustained investment pipeline to institutional investors.