THE BLOG
23/06/2018 07:19 SAST | Updated 23/06/2018 07:19 SAST

Startups Are Key To Africa’s Economic Growth

'This is what Africa needs. Companies who will create jobs and grow and build up the continent.'

Graduation day for our #LaunchpadforAfrica startups.
Google in Africa
Graduation day for our #LaunchpadforAfrica startups.

On 18 March this year, I walked into the Impact Hub in Ikoyi, Lagos. Thirty-six eager faces waited. The first class of Google Launchpad Accelerator Africa, a Google programme that we've now brought to Africa. These companies were green, just starting out, some of them had raised some funding, others not. All were excited to meet mentors, to meet Googlers, waiting to hear what Launchpad had to offer them.

Fast forward to three months later. The same 36 faces sat in the Impact Hub in Lagos. But this time they were confident and assured of the work they're doing. They'd raised $7m (~R95-million) in funding, won competitions, created 132 jobs. They'd changed. The first graduating class of Launchpad Accelerator Africa had come a long way in a short time. This is what Africa needs. Companies who will create jobs and grow and build up the continent.

The growth of entrepreneurship in Africa is critical to its survival. If we're going to develop economically we need to find employment for the millions of young people who make up the majority of our population. More than 11 million job seekers are entering the market every year. Empowering entrepreneurs and startups is essential to drive employment growth, and enable both economic and social development.

If startups are to have a real impact on their countries' economies, they need to grow and transition into 'scale-ups'. According to a World Economic Forum article written by Babson College professors Daniel Isenberg and Vincent Onmenyeh, these high growth firms are the "real generators of jobs, taxes and wealth".

The story of so-called 'startup capitals', from Silicon Valley, to Bangalore and Israel, also shows that these 'scale-ups' are vital to growing the wider startup ecosystem, providing founders, employees and potential business.

To use Silicon Valley as an example, Google and Facebook wouldn't exist as they are today if circumstances hadn't allowed Intel to grow from a handful of scientists to one of the world's largest companies from its Mountain View (still largely farmland in the late 1960s) headquarters. It is a kind of virtuous cycle of sustained wealth creation, which has transformed what were once semi-rural areas into bustling urban hubs.

Africa certainly isn't lacking for entrepreneurs. Take Uganda, for example. A remarkable 28.1 percent of the country's population are entrepreneurs. Despite that, its GDP is a paltry US$27-billion (~R365-billion), placing it outside the top 100 economies in the world. It's clear that Uganda doesn't need more entrepreneurs, it needs its existing entrepreneurs to be more successful.

The same is true for many countries across Africa.

The massive growth (admittedly off a low base) seen by some economies on the continent shows that they have innate potential. By supporting and growing their startups in a way that enables them to scale and birth further startups, these countries have a chance to show real, sustained growth and produce good, lasting jobs for their citizens.

This is why it's critical that we do this, that we run Launchpad programs here in Africa and enable Africa's entrepreneurs to create the jobs of the future.

Right now, these 12 startups are part of the launchpad alumni club.

We can't wait to see them take off. We're also excited to see what Class 2 of Launchpad Accelerator Africa will get up to. Applications are open now for the next 36 eager faces, ready to learn, grow and rise.

Mich Atagana, communications and public affairs head, Google South Africa