Did you know that entrepreneurship has been in decline in the US since 2008? More businesses are closing each year then being formed. This decline in start up activity is not only creating a net loss of companies supporting our economy each year, it’s also a sign that less Americans are pursuing entrepreneurship as a path to prosperity. America “the land of opportunity,” does not even rank in the top 10 for developed nations in terms of startup activity.
Surprisingly, a much different story is unfolding in Africa. African entrepreneurship is booming, with business formations numbering around 400,000 in 2014, approximately the same as the number of new companies created in the U.S. during the that period. African nations are experiencing a renaissance. Over the last 10 years, the economies of African countries have experienced an annual growth rate of about 5.5 percent, despite the great recession experienced in the U.S. and other developed nations. Not to mention, the continent is home to six of the fastest-growing economies in the world and by 2040, Africa will have a larger workforce than China.
“Since the dawn of the independent movements our focus has been on aid. Now Africa is a global economic force.” – Michael Bloomberg
When I heard these figures, it was difficult to reconcile them with the images of poverty and conflict that flood American media. Underlying these statistics is a rise in enthusiasm, creativity and self-reliance among young Africans. Interested in learning more about Africa’s transformation and the Young Lion entrepreneurs leading this change, I started reading the newly released book, The Lion Awakes by Ashish J. Thakkar. Ashish appreciates both sides of Africa’s story, its disruptive past and its bright future. In 1994 at age 13, Ashish and his family were forced to flee Rwanda in order to survive the Rwandan genocide. After his family settled in Uganda, Ashish dropped out of school at age 15 to capitalize on an opportunity to supply computer parts. It didn’t take long for him to grow the business. Today he employs over 11,000 people in 25 countries and has expanded into real estate, agriculture and manufacturing.
After reading the book, I had the opportunity to ask Ashish a few questions about the surge in African entrepreneurship, how businesses in the U.S. can work with African companies and what we can learn from their thriving startup community.
Tony DiCostanzo: You paint a pretty exciting picture of opportunities for Africans to create their own futures — “the skies the limit”. Has it been difficult for the poorer population to believe they can improve their economic status?
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Ashish J. Thakkar: Absolutely, the “picture of opportunities” is real – I have experienced it first-hand. Many of Africa’s poorer population are resilient and unwavering, and this notion of creating their own futures is very much embedded in African cultures. I think more needs to be done in providing opportunities and training, backed by an innovative and robust financial system – that will enable poorer populations to improve their economic status with dignity. The willingness is there, the drive is there – with the right foundations in place, this opportunity can be translated into viable and sustainable livelihoods. As the second African astronaut that will be going to space, I can personally say the limit is beyond the sky!
DiCostanzo: In your book, you introduced the concept of “trade not aid.” As I was reading this, I was thinking how challenging it would be for my business to identify firms and opportunities to partner with African based companies. How would you suggest U.S. and European companies (especially small startups) get connected with businesses in Africa that are interested in international partnerships? Networking websites? Business listing services?
Thakkar: As mentioned in my book, the most important thing any investor in Africa needs to understand is that doing business on the continent is about relationships and knowledge. This is the same for any business looking to partner with African-based companies. You can’t take short cuts – you have to do your due diligence. The reality is that, it is a place where you have different cultures, parliaments, and political and regulatory systems. You cannot engage with Africa from a distance – you need to be able to gain first-hand knowledge of the environment in order to properly know the market or have a local partner that understands the market well. Of course with mobile being a game changer on the continent and as more African businesses establish a digital footprint, this will help U.S. and European companies get connected with businesses in Africa. Currently, there are networking websites that are useful such as Mara Mentor, which enables people to connect with young entrepreneurs across the continent. Mara Sokoni would also be a good channel to kick start trade activities with local partners.