Accelerating Growth of Uganda's Start-Up Ecosystem
December 18, 2022
Uganda is one of East Africa’s fastest-growing economies and home to emerging Fintech, Foodtech Software, and Data start-ups. The country has access to global accelerator programs, grants and events to boost entrepreneurship. Uganda’s start-up community is an important and promising driver of economic growth, high value job creation and a driver of national development.
Uganda is ranked 119th among 132 countries in the Global Innovation Index 2022, making it one of the least innovative in the world. Uganda ranks 6th among the 16 low-income group economies and 13th among the 26 economies in Sub-Saharan Africa. The major bottlenecks stifling the emergence of new enterprises from the innovation ecosystem are i) Limited linkages between academia and industry due to fragmentation of the various players and resources in the technology and product development value chain; ii) Inadequate specialized facilities and human capital to support technology development, product development and commercialization in the various innovation clusters; iii) Absence of necessary regulatory policies to support growth of clusters of technology development within the ecosystem; iv) Inadequate private sector participation in the enhancement of the innovation ecosystem; v) Limited capacity for policy implementation in Uganda’s innovation ecosystem; and vi) Inequality in distribution of innovation and research opportunities – most being urban based.
The innovation and start-up ecosystems across leading sectors are fragmented and weak in Uganda, with adverse implications for growth in leading production sector of business, manufacturing, agriculture, tourism, energy, ICT, education, health and the creative industry. According to the Global Innovation Index 2022, innovation systems in Africa are broadly characterized by having low levels of science and technology activities, high reliance on government or foreign donors as a source of research and development (R&D), limited science-industry linkages, low absorptive capacity of firms, limited use of intellectual property (IP), and a challenging business environment. This can be attributed ultimately to the limited efforts of collaboration among public sector, private sector and academia. The impact of this has been the emergence of a weak and uncompetitive private sector that is not producing desired levels of inclusive growth.
A strengthened start-up ecosystem requires investment by government and other stakeholders in an enabling environment, policies and linkages to markets not forgetting the digital infrastructure ranging from investments in applications, infrastructure and security systems to guarantee safe, reliable and sound software systems.
Accelerating Growth of Uganda’s Start-Up Ecosystem
The United Nations Development Programme (UNDP) in Uganda is working with Startup Blink, an Israel-based company to undertake a Rapid Strategic Assessment of Uganda’s Start-up Ecosystem with the goal of identifying the main strengths and weaknesses of the ecosystem and design a National Strategy Roadmap for the Start-up Ecosystem with actionable steps and recommendations for its improvement in the short, medium, and long-term. UNDP will conduct activities to activate the ecosystem, with a flagship online ecosystem portal at the centre of these activation efforts.
Assessment of the Start-Up Ecosystem
This part of the project will conclude with a high level report drawing a full picture of the local start-up ecosystem. It will be based on desk research, in-depth semi-structured interviews with more than 50 notable stakeholders, and a survey of dozens of other stakeholders. Based on the desk research and in collaboration with government staff from key institutions and other local ecosystem leaders, the assessment will undertake an ecosystem mapping of start-ups, start-up support organizations and programs. UNDP is also undertaking primary research (survey and qualitative interviews) with founders to quantify key gaps around local and global connectedness, founder mindset, know-how, access to talent, funding and the legislative and regulatory environment.
The global benchmarking of this report is assessing the relative positioning of Uganda’s ecosystem based on detailed benchmarking against a reasonable number of ecosystems while sub-sector assessment is focusing on the Identification of key areas of strength within Uganda’s start-up ecosystem and Uganda’s traditional industries. The report will present information gathered and draw conclusions on the state of each of the foundations of the start-up ecosystem: legal and physical infrastructure, talent, entrepreneurship support system, funding, innovation mindset, and local and global connectedness.
National Strategy Roadmap
This is a comprehensive ecosystem development strategy based on the assessment, broken down into detailed Plans of Action. The roadmap presents delivery of key program recommendations geared toward accelerating ecosystem growth and to accelerate the emergence of start-ups and scale-ups categorized into short term actions (1 year), midterm initiatives (2-3 years) and long-term change (5 years). This will be a comprehensive document with recommendations on policy and regulatory actions for addressing the most relevant legislative and regulatory issues identified during the policy audit.
Start-Up Ecosystem Activation
As start-up ecosystem activation is also important, the project has designed activities to promote Uganda’s start-up ecosystem: a meetup group, a pitching event and a flagship online portal showcasing the most relevant entities of Uganda’s start-up ecosystem. The developed portal (to be launched in January 2023) presents the sector specific start-ups, co-working spaces, accelerators, start-up investors, and start-up support organizations across the country.
Collective Intelligence to strengthen Uganda’s Start-Up Ecosystem
UNDP is applying collective intelligence to co-design activities for strengthening Uganda’s start-up ecosystem. In October 2022, UNDP convened stakeholders in a workshop to consult on key considerations for the Rapid Strategic Assessment and the National Strategy for the Start-up Ecosystem. The workshop was attended by start-up founders and co-founders, start-up support organizations, academia, government, investors/financing institutions, among other stakeholders. During the workshop, participants provided feedback on elements of a start-up ecosystem, ecosystem development stages, as well as key considerations for the Uganda’s ecosystem rapid assessment and roadmap.
By Nathan Tumuhamye, Head of Exploration
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