There is no doubt that start-ups are key ingredients for research, innovation and future economic growth. Start-ups around the world are not only contributing to economic development but are also being founded on the premise of solving society’s challenges and can therefore be critical for a community or country.

Start-ups do not and cannot exist in a vacuum. They are born in a specific context as parts of an entity – a network, a system – much bigger than themselves. Entrepreneurs are supported by a community of people, organisations and other start-ups that surround them. This is what we refer to as a start-up ecosystem.  Start-up ecosystems are springing up in all corners of the world and Rwanda, in my opinion, is very well-placed to establish itself as a leading start-up ecosystem on the continent and to attract key talent from other countries as was very well described in last week’s article by Nicky Gouder and Sarah Martin.

Of course, there is no recipe for exactly what should go into the pot when building a start-up ecosystem. However, there are a few key ingredients that each local ecosystem needs in order to thrive.

Start-ups

Start-ups themselves, of course, are an indispensable part of any start-up ecosystem. They determine the face of the local ecosystem and play an important role in economic growth, too. A high concentration of start-ups can also make an impact on the cities where they set up shop. Therefore, governments should be focused on incentivising start-ups as these can become critical economic determinants.

Educational institutions

It would be hard to argue with the stance that schools provide one of the most important resources for start-up ecosystems around the world: talent.  Colleges, universities and other education institutions play a fundamental role in nurturing talent and setting the next generation of entrepreneurs and startup employees on their paths. In the age of accelerated technological development, environmental threats and tumultuous global politics, it is more important than ever before for institutions to be forward-thinking and equip their students for the challenges of the modern world. Startups will take on many of those challenges – and they will be launched by students studying at these institutions today. It is therefore critical for Rwanda’s educational institutions to have outreach programmes as well as collaborative initiatives with industry and start-ups.

Funding providers

If talent is the most important resource for start-ups, money is a close second. Few start-ups survive for long without an investor or a financial institution to back them – which is why they’re an essential pillar of every start-up ecosystem. Here, it is critical for financing mechanisms through the Rwanda Development Bank and for venture capital to thrive in the country as this will ensure that start-ups can continue to grow.

Incubators and accelerators

Incubators and accelerators are programmes that help start-ups succeed by providing them with mentorship, guidance, training, strategy, partnerships, R&D and funding. They’re instrumental in getting start-ups, especially early-stage ones, off the ground. Having access to an accelerator’s resources and network can make or break a start-up that hasn’t cemented itself within the ecosystem. Here, Rwanda already has a number of incubators and accelerators and this will be fundamental for the ecosystem to thrive.

Research organisations

Research organisations contribute to the start-up ecosystem in many different ways. For start-ups in industries like biotech and robotics, they can be their most important partners. But research organisations can also affect the start-up ecosystem itself by providing the insight needed to spot trends, address challenges and focus on strengths.

Talent

Start-up ecosystems are incredible talent magnets. As start-up hubs mature, they bring the best and the brightest business minds, developers, designers, investors…the list goes on. Cities benefit enormously from this influx: highly-skilled workers soon change projects, cross-pollinate organisations, and start-up up their own companies. It becomes a virtuous circle – innovation and the economy booms. It is for this reason that my colleagues highlighted the role of start-up VISAs in their article last week.

Regulatory frameworks

Start-ups are usually the pioneers of innovation and therefore regulation needs to provide the required support and ability for this to happen. It is therefore critical for governments to provide sound and robust regulatory frameworks that do not stifle innovation or make it hard for start-ups to operate. Regulatory sandboxes can be a key element in this regard and Rwanda already has experience in this element.

Start-ups are critical for any country and its future growth trajectory. This is even more so in a post-pandemic world and also a country tries to solve some of its key challenges. Start-ups do not happen automatically but need an ecosystem which supports their growth and allows them to thrive and flourish. Rwanda is already on the path to create an enabling environment and additional initiatives can truly transform it in a global start-up ecosystem

JP Fabri is a co-founding partner of Seed, an international advisory firm  in Malta, EU

www.seedconsultancy.com 

 jp@seedconsultancy.com