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Lessons From The German Tech Ecosystem

Germany has always been a technology powerhouse. The largest economy in Europe, playing host to many top-quality brands in almost every field, be it cars, machineries, construction, medical equipment and infrastructure development. There are two attributes that no one can take away from the Germans, which are: the quality of products and keeping to time (this is on a lighter note).

In 2016, I was part of the German Federal Foreign Office visitors programme. We were selected to understudy the Germany’s ecosystem and how the country was deliberately shifting attention from the highly-advanced industries it was known for to the completely new and often times, misunderstood start-up ecosystem. As part of the programme, we visited various cities, incubation hubs, government agencies supporting start-ups and universities; to understand how the country was connecting the academia with the entrepreneurs as well as a number of other events.

During such visits, I spend quality time interacting with the ecosystem players in those countries, trying to understand how they have fared, despite the fact that, their realities are pretty much different, from the realities of a country, such as ours whose citizens are still grappling with matters of basic existence.

During the visitors programme in 2016, I visited is Werk1, which was and still is the largest incubation and co-working space in Munich. I had an extensive chat with the, then, managing director, who shared a lot about the vision and workings of the place.

The interesting aspect of Werk1 Munich, is that, it is mainly government-funded but professionally managed because the goal is to get cities such as Munich, Berlin and Germany to become a start-up powerhouse, which takes a while and requires a great deal of focus and investments. My first visit to the hub was in 2016 and at that time, they had just about 40 start-ups. Franz Glatz, the then, MD, informed me that co-working space offers a great place to work, for freelancers of any profession, start-up and entrepreneur. It also allows them to network and share their passion for their various businesses.

A few days ago, I visited the same hub again, immediately after the recently concluded Swedish Visitors Programme. They have grown, not just in terms of physical infrastructure, but also, with regard to the number of start-ups, currently being supported out of the centre.

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The Incubator Coordinator, Werk1, Maike Wursthorn, told me that the hub has grown, having a 150 strong-member community and holding series of programmes and events that are helping to strengthen the community.

“One of our biggest events is, frequent breakfast sessions that we hold”, she stated. This is the result of consistency in policies.

One of the start-ups, currently working out of Werk1, is fulfin, a fintech start-up co-founded by Nathan Evan. He tells me that working out of Werk1 has helped his start-up in a number of ways. “First, the community spirit and network has been great and secondly, using the space is helping to lower our start-up costs, which would have been much higher because of the cost of rent and other overheads in Munich”, he stressed.

That was instructive to me because the idea of hubs and co-working space is primarily to help people wanting to start an enterprise, to reduce the headaches as much as possible. Life was snuffed out of my first business because, after I paid the rent, there was no more money whatsoever, for operational costs.

Omobola Johnson, in her tenure as the Minister of Communication Technology arranged to fund and launch an entity called, the IT Development Entrepreneurship Accelerator, (iDEA Hub), in the heart of Yaba, Lagos.

She had stated that, “iDEA Hub, with locations in Yaba, Lagos and Tinapa in Cross River States, have begun to make an impact, with 70 start-ups being incubated and nurtured. In line with these efforts, Venture Capital Funds are being raised to help fill the gaps in seed funding that is a major challenge for our young tech-preneurs. Earlier this week, we launched a $50m Venture Capital Fund for SMEs and this will, very nicely, complement, the $22m ICT-focused VC Fund that NITDA has seeded, through the vehicle of the National IT Development Fund, (NITDEVF).”

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Fast forward to date, iDea Nigeria has ceased to exist and the lofty dreams, ideas and initial investments, have all gone to waste. There is no mention of the IT development fund anymore — all thanks to the inconsistency of government policies. I have been part of discussions on whether, or, not it was right, to have used government funds to set-up iDea in the first place. Some people have argued that it was set up with the wrong intentions. Whatever be the case, I think it is clear that inconsistency in policies will simply give the world a picture that we are not serious about national development.

Funding for start-ups, especially, in the early days, is one thing we must take seriously. Nathan informs me about a number of grants and funds available for start-ups, such as, EXIST and High-Tech Gründerfonds, both of which are as a result of partnerships between public and private sector. When are we going to start seeing that in this part of the world, rather, than a public agency like NITDA, talk about regulation and directives all the time, won’t it be refreshing to see a fund set up by the agency in partnership with a financial institution?

Europe might be an aging continent, as people say, but it is clear that it is putting in the needed investments towards supporting the knowledge/new economy that will be powered by data and technology. On the flipside, Africa might be a young continent, with a huge number of young population, however, all that might become a disaster, if we do not make careful/hard decisions today.

I recommend that the government should set up and provide increased support for hubs, rather than, trying to establish theirs. I believe that its agencies have no business running hubs in whatever shape or form because, somehow, it would, most likely, be run down or shut down when a new administration comes on board. Organisations such as Innovation Support Network and a few others can ensure that the government’s funding to hubs is channelled aright.

Source: Punch

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