Mobile Industry Driving Sub-Saharan Africa's Social Impact and Contributing to the Region's Economic Growth, Says GSMA Report

According to the GSMA, a UK-based organization representing the interests of mobile operators worldwide, the mobile market in Sub-Saharan Africa "will reach several important milestones over the next five years: half a billion mobile subscribers in 2021, 1 billion mobile connections in 2024, and 50% subscriber penetration by 2025." The Mobile Economy Sub-Saharan Africa 2020, which is authored by GSMA Intelligence, GSMA's research and consulting arm, says that "Despite the economic uncertainty brought about by the Covid-19 crisis, operators in the region will invest $52 billion in infrastructure rollouts  between 2019 and 2025."

Available in English and Français, below are the report's key findings:

Covid-19 casts a spotlight on digital connectivity

The report is accurate in explaining that the "Covid-19 pandemic has had a profound impact on the digital landscape in Sub-Saharan Africa and around the world." And I concur that that "pandemic has highlighted the importance of a robust and inclusive digital economy, underpinned by universal access to fast, reliable internet and a range of digital services for individuals and businesses."

What is more, "The mobile industry in Sub-Saharan Africa has largely risen to the challenge of keeping individuals and businesses connected during the pandemic, despite changes in data consumption patterns. However, with nearly 800 million people in the region still not connected to the mobile internet, it has never been more urgent to close the digital divide."

Nearly half a billion people subscribe to mobile services in Sub-Saharan Africa

Encouragingly, the report finds that "[s]martphone adoption continues to rise rapidly in the region, reaching 50% of total connections in 2020, as cheaper devices have become available. Smartphone financing models are gaining traction, demonstrated by the recent partnership between Safaricom and Google, allowing low-income consumers to pay for 4G devices in daily instalments. Over the next five years, the number of smartphone connections in Sub-Saharan Africa will almost double to reach 678 million by the end of 2025 – an adoption rate of 65%."

The 5G era has begun in Sub-Saharan Africa

"Vodacom and MTN launched the first major 5G networks in Sub-Saharan Africa in 2020," the report explains, "offering 5G mobile and fixed wireless access (FWA) services in several locations across South Africa." Furthermore, "5G trials have been conducted elsewhere in Sub-Saharan Africa, including in Gabon, Kenya, Nigeria and Uganda."

Despite the frequent media headlines about the deployment of 5G, GSMA asserts that "mass adoption of mobile 5G is not imminent in the region. With significant unused 4G capacity and 4G adoption still relatively low, the focus in the near term for operators and other stakeholders is to increase 4G uptake. This will involve strategies to make 4G devices more affordable and the provision of relevant digital content to drive demand for enhanced connectivity services. By 2025, there will be just under 30 million mobile 5G connections in Sub-Saharan Africa, equivalent to almost 3% of total mobile connections."

Mobile industry driving social impact and contributing to economic growth

"Beyond connectivity," the report points out that "the mobile industry has engaged with businesses and governments on initiatives to alleviate the impact of the Covid-19 pandemic on citizens. From mobile money transaction-fee waivers and discounts on data tariffs for educational and health sites, to cash and equipment donations, mobile operators and other industry players have supported the most vulnerable in society during the pandemic while also contributing to economic recovery efforts."

Moreover, "Mobile technologies and services generated 9% of GDP in Sub-Saharan Africa in 2019 – a contribution that amounted to more than $155 billion of economic value added. The mobile ecosystem also supported almost 3.8 million jobs (directly and indirectly) and made a substantial contribution to the funding of the public sector, with $17 billion raised through taxation. By 2024, mobile's contribution will reach around $184 billion as countries increasingly benefit from the improvements in productivity and efficiency brought about by the increased take-up of mobile services."

Policy actions for digital and fiscal resilience

I recently had the privilege to speak to a group of entrepreneurs residing in Africa, many of whom reside in Botswana. While I expressed my optimistic view on the long-term growth of Africa's digital economy, I also conveyed my concerns about governmental regulatory barriers that will impede business growth.

Therefore, I support the report's finding: "Access to digital services has been crucial to keep economies active and mitigate the socioeconomic repercussions of the Covid-19 pandemic. Consequently, governments and policymakers should implement policies to enhance access to connectivity and drive investment in more resilient digital infrastructure for the future. This is crucial to reactivating the region's economy post-Covid-19 as digital technologies play an even more important role in society."

The GSMA further maintains that "[t]o improve mobile adoption, policy measures should focus on encouraging investment in much-needed infrastructure and improving consumers' ability to access digital services. As such, policymakers should:

• "rethink fiscal policy on mobile connectivity
• "facilitate mobile infrastructure deployment
• "prioritize digitization of person-to-government transactions."

What is more, "Efficient and effective management of spectrum is also key to maximize the opportunities that mobile connectivity can bring to society. Making sure the required spectrum resources are available under the right conditions will lower broadband costs, increase coverage and boost connectivity. The 2020s will see strong growth in the number of Africans connected to mobile broadband. As 4G and 5G grow together throughout the decade to come, spectrum preparation can drive cost efficiency and promote growth."

 

With investments in infrastructure to reduce the digital divide and increase capacity among mobile device users, together with the implementation of regulatory reform, Sub-Saharan Africa will see a rise of key sectors including digital identity, connected devices (IoT), and e-commerce and digital payments. 

"With half the global population now connected to the internet," the report explains, "the coming years will see a steady rise in online engagement as consumers take a digital-first approach to economic and social activities. For the majority of people in Sub-Saharan Africa, the lack of a verifiable identity remains a major barrier to participating fully in the digital economy. Sub-Saharan Africa is home to only a sixth of the world’s population – but half the global population without an ID live in the region."

Crucially, "Regional and national governments recognize the benefits of online digital identity. To this end, the Smart Africa Alliance has proposed a blueprint to assist public and private sector players with the design and implementation of digital identification schemes for individuals, which are trusted by all stakeholders based on shared rules and minimum requirements, thus facilitating mutual recognition. The Smart Africa Trust Alliance (SATA) is due to be piloted in three countries – Benin, Rwanda and Tunisia."

Regarding IoT, the report says development of the industry "in Sub-Saharan Africa is still at a nascent stage and faces several challenges. These include limited investment and innovation in solutions and devices that address local use cases, unreliable power supply and low purchasing power among consumers and enterprises. However, the outlook remains positive. The number of cellular IoT connections in the region has doubled over the last five years to 16.7 million at the end of 2019. Although this is only a fraction of the 1.7 billion global connections, the upward trend is expected to continue as commercial business models become more viable."

Moreover, "IoT has the potential to help address regionwide challenges in key sectors, such as energy, water, agriculture, transportation & logistics, manufacturing and healthcare. With many countries in the region lacking an efficient system to deliver these essentials, demand for IoT-enabled solutions is set to increase over the coming years."

As for e-commerce, the sector "is experiencing a renaissance as shopping behaviors change, in part due to social distancing measures introduced to curb the spread of the pandemic. A survey from Visa found that 71% of respondents in Nigeria and 64% in South Africa bought groceries online for the first time because of the pandemic. During the first half of 2020, pan-African online retailer Jumia also reported increased demand from sellers across the region to expand their business on its platform, as the Covid-19 crisis further established e-commerce as an important route to market. As online shopping grows in popularity across Sub-Saharan Africa, mobile operators will play a key role in enabling digital payments to replace cash transactions."

What do you think of the report's findings? Do you see opportunities in building digital identity, IoT or e-commerce and digital payment solutions?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Using Export Credit Insurance, Myths vs. Truths in Exporting, and Questions to Ask Yourself if You Have Yet to Get Paid by a Chinese Company

The previous post on this blog presents ten questions questions every U.S. exporter should ask according to the Export-Import Bank of the United States (EXIM), an independent government agency that assists in financing and facilitating U.S. exports of goods and services. The post references EXIM's Multi-Buyer Credit Insurance, which EXIM says "is a policy that protects an exporter's accounts receivable and has significant benefits. The protection of a policy equips businesses with the confidence necessary to enter new markets, increase sales in existing ones, and chart a path forward with margins they can depend on."

EXIM explains small businesses use credit insurance to:

• Extend credit terms to foreign customers.
• Insure against nonpayment by international buyers.
• Cover both commercial (e.g., bankruptcy) and political (e.g., war or the inconvertibility of currency) risks.
• Arrange financing through a lender by using insured receivables as additional collateral.

Benefits of EXIM's Small Business Multi-Buyer Credit Insurance include:

• Risk reduction: safeguard against catastrophic losses from buyer nonpayment. It covers up to 95 percent of sales invoices.
• Increased competitiveness: unlock the ability to offer buyers the credit terms necessary to expand into new markets and boost sales with existing customers with confidence. In turn, buyers do not need to pay cash in advance and hinder their cash flow.
• Improved liquidity: accelerate cash flow by borrowing against foreign receivables.
• Credit management expertise: ease the burden of credit risk management by leveraging EXIM’s international expertise.

EXIM then provides the following point to explain how its credit insurance works:

• Policies cover both commercial and political losses at 95 percent.
• There are no application fees or minimum premiums. A one-time, refundable advance deposit of $500 is required to issue the policy.
• Premiums are paid no later than 30 days after the month of shipment.

This video provides a brief explanation how EXIM's credit insurance works.

Exporting means undertaking a number of risks. Not all risks are the same, however, and there are myths some business owners may mistakenly believe, which may prevent them from creating an export plan for their business. To dispel these myths, EXIM created a document presenting six truths about exporting.

While each truth in EXIM's document is valuable, I appreciate that in responding to the myth, "I'm too small to go global," the agency explains: "Nearly 42% of all U.S. exporters have fewer than 19 employees."

While I generally agree that "With the right tools, selling internationally is routine" is an accurate truth to the myth of "Getting paid is cumbersome and I'll lose my shirt," not all international markets are the same. For example, Dan Harris with Harris Bricken, an international law firm, writes in a post published on the China Law Blog that "China has all sorts of rules that apply to foreign conversions and remittances." His post looks "at some basic due diligence that can identify or avoid defaults or delays in money transfers out of China."

If you have yet to receive payment, Mr. Harris presents the following eight questions you should ask yourself "before you rush to blame the Chinese company":

1. Do you have any idea what taxes should have been paid by the Chinese company and what taxes should be deducted from the remittance itself?
2. Was your contract exempt from the kind of prior registrations required by the tax authorities?
3. Do you even have an enforceable contract against the Chinese company in China?
4. Has an independent person gone down to the Chinese company's bank branch to confirm what their particular requirements and concerns are?
5. Did you withhold any deliverables until you received all or substantially all of the money out of China?
6. Did you ask the Chinese company to provide examples of previous successful foreign remittances?
7. Does the business license of the Chinese company allow for foreign trade and thereby indicate that foreign remittances would not be unusual in the ordinary course of business?
8. If you're dealing with a State Owned Entity (SOE), or a very large company of any kind, did you understand all of the internal approvals that company would require before a payment could be authorized and did you appreciate how long this might take?

Suggesting business owners need to take responsibility for their failure to understand the risks of doing business in China, including crafting strategies to mitigate those risks, Mr. Harris says: "If the answer to any one of these questions is 'no,' don't blame the Chinese company."

What recommendations do you have in protecting your company's accounts receivable when exporting to foreign markets? Do you agree with EXIM's truths to dispel exporting myths? If you are exporting to China, what advice do you have for getting paid?

UPDATE

A reader of this post sent me a message saying: "For more impartial information on export credit insurance (trade credit insurance), you may want to refer to The International Credit Insurance & Surety Association (ICISA), which published A Guide To Trade Credit Insurance, a practical and accessible industry-wide reference guide on trade credit insurance." The reader also recommends utilizing the resources provided by The International Union of Credit and Investment Insurers (Berne Union), an international not-for-profit trade association representing the global export credit and investment insurance industry.

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

10 Questions Every U.S. Exporter Should Ask

In a post previously published on this blog, I discuss strategies on how to choose an export market for your business. That post references how the Export-Import Bank of the United States (EXIM), an independent, self-sustaining Executive Branch agency with a mission of supporting American jobs by facilitating the export of U.S. goods and services, is one of a number of government agencies that produce useful resources for exporting businesses. One such document presents ten questions, segmented in three sections, every U.S. exporter should ask:

Consider the Basics

1. Am I maximizing my current export revenue?

2. Do I know my current market’s cultural factors and infrastructure limitations?

3. Am I currently reaching all of the markets I've targeted?

4. Do I know how to leverage conditions in this market to add new customers & increase sales with existing ones?

Examine Potential Global Markets

5. Have I located a complimentary market opportunity in a geographic region I am already serving?

6. Have I studied the competition in my targeted market?

7. Do I know how to penetrate this new market effectively and efficiently?

8. Do I have a partner or distributor to help me expand into this market?

Develop Trade Connections

9. Do I know what resources I need to succeed in growing my export base, and where I can acquire them?

10. Do I have a plan for financial obstacles that may arise while I am trying to grow my export sales?

To facilitate in responding to the checklist's initial four questions, the U.S. Small Business Administration (SBA) published the Export Business Planner For Your Small Business, which the SBA explains is an innovative tool "designed to serve as your roadmap for creating your Export Business Plan, exploring foreign markets, developing a Marketing Plan, exploring financing, costing your product, and more."

To help business owners answer the second group of questions on examining potential global markets, Country Commercial Guides prepared by International Trade Administration (ITA) trade professionals at U.S. embassies worldwide provide valuable information on a variety of topics such as market conditions, opportunities, regulations, and business customs for more than 70 major markets. Furthermore, the State Department Partner Posts produces Country Commercial Guides in over 60 markets.

Regarding the third group of questions on developing trade connections, EXIM's Multi-Buyer Credit Insurance is a policy that protects an exporter's accounts receivable and has significant benefits.

While these ten questions are intended for U.S. exporters, any business, irrespective of their home country, will also benefit from this list.

What resources do you recommend for creating an export plan?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Eight IP Questions You Should Ask Before Starting Business in a New Country

A post previously published on this blog focuses on how to choose an export market for your business. While business leaders will focus on advantages each country presents for their enterprise, it is prudent to identify, evaluate, and mitigate those risks which may prevent their enterprise from achieving success (i.e., profitability).

The value of many businesses may be found in its intellectual property (IP). Protecting your IP is crucial to protecting your creativity or idea including time and expenses invested on research and development. Or, as Darren Heitner, an attorney based in Florida, explains in this article, "Owning intellectual property helps you protect from others using something identical or similar to your creation, brand or product, and can also create new sources of revenue should you desire to license your goods or services out to third parties. Without protection, you could end up spending a lot more money in defending against someone else or even rebranding, and miss out on commercial opportunities."

A blog post published by Matthew Dresden, an attorney with the Seattle, Wash.-based law firm Harris Bricken, presents eight questions "companies starting a business in a foreign country should ask about their own intellectual property before they start doing business in that foreign country, be it Mexico, Spain, Japan, Thailand or wherever."

1. Can we adopt, use and register as trademarks the names we want to use for our products or services in the foreign country?
2. Is any aspect of our IP new, inventive and useful and therefore potentially patentable in the foreign country or anywhere else relevant to our business?
3. Have we instituted procedures to keep our potentially patentable inventions confidential until a patent application may be filed?
4. Are there any third party patents that could prevent us from selling our services or products in the foreign country or even from manufacturing our products there or anywhere else?
5. What aspects of our products or services are protected by copyright?
6. Is the design of our product protectable as a design patent in the foreign country or elsewhere?
7. Are there any third party design registrations that could prevent us from selling our product in the foreign country or elsewhere?
8. Do we have written agreements with our foreign country employees and manufacturers that clearly assign to us any IP we create with them and that provide for maintaining the confidentiality of our information and our trade secrets?

In addition to answering these questions posed by Mr. Dresden, I can attest based on my experience that business leaders will need to determine whether or not the country they are considering provides a political culture which fosters a strong business environment. Such a business environment must include a legal and regulatory system that protects intellectual property rights.

What additional questions do you recommend business executives should ask before starting a business in a new country?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

EIU Report Explores How to Invest in a Post-Covid World

Investors may support the following observation by The Economist Intelligence Unit (The EIU): "Equity markets have shown extreme volatility in 2020 and become increasingly disconnected from economic fundamentals: markets are being driven up by central bank liquidity and fiscal stimulus, while the real economy is in one of the deepest recessions of the last 100 years."

In its report, Where have all the fundamentals gone? Investing post-Covid, The EIU suggests that "the coronavirus (Covid-19) pandemic and geopolitical tensions are disrupting business models and may require radical changes in investment strategies."

The EIU "believes that three key themes are going to be vital for investment performance over the next five years.

• "No end to monetary stimulus in sight. With major economies unlikely to return to their pre-Covid-19 level of output for years, inflation and rising interest rates are not currently a threat. As a result, asset prices are likely to remain decoupled from economic data for some time, but fundamentals will affect relative performance.
• "Prepare for a backlash. Investors should be braced for political shocks ranging from tax increases to disorderly sovereign defaults. Governments are likely to expect more in return from companies that they have showered with wage subsidies and loan forgiveness. Countries with adaptable economies and high levels of political cohesion will be the safest bets.
• "Prepare for a bipolar world. Covid-19 has raised the stakes in the US-China rivalry, and tensions are likely to continue to rise regardless of who wins the US presidency in November. Countries and multinational companies will face growing pressure to show where their loyalties lie, and investors will need to consider the implications along supply chains. While the new order will also create new opportunities, some countries will be better placed to exploit them than others."

The report importantly notes: "Some sectors and companies have already benefited from the liquidity injection to a much greater extent than others, with equity prices surging in China, but languishing in commodity-exporting emerging markets." The EIU expects "this divergence will

continue" and "countries best-placed to adapt to the disruption of Covid-19 (those with sound economic institutions, low financial risks, and flexible labor markets) will recover relatively quickly."

As for the report's finding that investors should prepare for a backlash, The EIU explains that "[a]fter having provided unprecedented monetary and fiscal support to companies, it is likely that governments, and the public, will have a heightened set of expectations of the contribution that companies make to society. This could take the form of more robust competition policy, requirements for minimum levels of employment or support for apprenticeship schemes, higher taxes or measures to restrict high dividend payouts or executive bonuses." Crucially, "Investors will need to monitor political and policy trends carefully."

And in order to prepare for a bipolar world, I concur that "investors will need to consider the implications along supply chains. While the new order will also create new opportunities, some countries will be better placed to exploit them than others." The report adds:

Supply chain realignments will create new opportunities, but investors will need to consider carefully how they might play out in practice. For instance, Latin America clearly has the opportunity to gain from nearshoring in the coming decade, given some comparative advantages, including its long list of free-trade agreement, proximity to the US market and increasingly competitive wages. However, while some movement is likely (particularly to Mexico), our analysis suggests that many countries in the region will struggle to overcome disadvantages in too many areas: infrastructure, long distances to key markets in Asia and Europe (Chile, for example, could struggle in this area despite its many advantages), and political concerns over predictability, stability and security.

How do you think investors should prepare for investing in a post-covid world?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Global Innovation Index 2020 Focuses on Who Will Finance Innovation

According to the 13th edition of the Global Innovation Index (GII), "As long as innovation has existed, a central challenge facing innovators worldwide is the mobilization of stable and accessible financing mechanisms. Financing affects all stages of an innovation cycle, from ideation to commercialization, expansion, and, eventually, long-term business sustainability."

The Global Innovation Index 2020: Who Will Finance Innovation? is the result of a collaboration between Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO) as co-publishers, and their Knowledge Partners including the Confederation of Indian Industry, Dassault Systèmes, The 3DEXPERIENCE Company, and the National Confederation of Industry Brazil.

The Global Innovation Index 2020 provides detailed metrics about the innovation performance of 131 countries and economies around the world. Its 80 indicators explore a broad vision of innovation, including political environment, education, infrastructure and business sophistication. The 2020 edition sheds light on the state of innovation financing by investigating the evolution of financing mechanisms for entrepreneurs and other innovators, and by pointing to progress and remaining challenges – including in the context of the economic slowdown induced by the coronavirus disease (COVID-19) crisis.

Below are the six key findings of the GII 2020:

1. The COVID-19 crisis will impact innovation—leaders need to act as they move from containment to recovery

"The coronavirus disease (COVID-19) pandemic has triggered an unprecedented global economic shutdown," the report notes. "Now that global economic growth will fall deeply in 2020, the question becomes—will R&D, VC, IP, and the political determination to foster innovation also slump? As innovation is now central to corporate strategy and national economic growth strategies, there is hope ahead that innovation will not slump as deeply as foreshadowed."

2. Innovation finance declines in the current crisis, but there is hope too

"In the context of the GII 2020 theme 'Who Will Finance Innovation?', a key question is the impact of the current crisis on start-ups, VC, and other sources of innovation financing."

The report provide some home noting that in "key VC hot spots—Singapore, Israel, China, Hong Kong (China), Luxembourg, the United States of America (U.S.), India, and the United Kingdom (U.K.)—will continue to be magnets for VC. They are likely to bounce back quickly, in part due to the thirst for return on capital worldwide. Chinese VC deals, which halved earlier this year, are already rebounding strongly. Importantly, the direction of VC and innovation seems to have been redirected towards health, online education, big data, e-commerce, and robotics."

3. The global innovation landscape is shifting; China, Viet Nam, India, and the Philippines are consistently on the rise

"This year, the geography of innovation is continuing to shift, as evidenced by the GII rankings. Over the years, China, Viet Nam, India, and the Philippines are the economies with the most significant progress in their GII innovation ranking over time. All four are now in the top 50."

The report adds that "Switzerland, Sweden, and the U.S. lead the innovation rankings, followed by the U.K. and the Netherlands. This year marks the first time a second Asian economy—the Republic of Korea—cracks the top 10, next to Singapore."

What is more, "The top-performing economies in the GII are still almost exclusively from the high-income group. China is the only exception, ranking 14th for the 2nd time in a row and remaining the only middle-income economy in the GII top 30. Malaysia (33rd) is the second-most innovative middle-income economy. India (48th) and the Philippines (50th) make it to the top 50 for the first time. India now ranks 3rd among the lower middle-income group—a new milestone. The Philippines achieves its best rank ever—in 2014, it still ranked 100th. Viet Nam ranks 42nd for the second consecutive year—it ranked 71st in 2014. In the lower middle-income group, Indonesia (85th) joins the top 10.

"The United Republic of Tanzania tops the low-income group (88th)."

4. Stellar innovation performance found in developing economies

"Beyond GII top-level rankings, innovation performance reveals itself in a few other ways, highlighting that some top innovation performance takes place in emerging markets too."

The report "assesses which economies consistently hold the top global spots on particular GII innovation facets, such as VC, R&D, entrepreneurship, or high-tech production. Hong Kong (China) and the U.S. lead on this count; Israel, Luxembourg, and China tie for 3rd place; Cyprus ranks 4th; and Singapore, Denmark, Japan, and Switzerland tie for 5th place."

However, "Some top spots on selected innovation indicators are not held by high-income economies. In South East Asia, for example, Thailand is 1st in business R&D globally, and Malaysia is top in High-tech net exports globally. In Sub-Saharan Africa, Botswana ranks 1st in Education spending globally and Mozambique leads in Investment globally. In Latin America, Mexico is the largest creative goods exporter worldwide."

5. Regional divides persist, yet some economies harbor significant innovation potential

The report remarks that "Despite some innovation 'catch-up,' regional divides exist with respect to national innovation performance: Northern America and Europe lead, followed by South East Asia, East Asia and Oceania, and more distantly by Northern Africa and Western Asia, Latin America and the Caribbean, Central and Southern Asia, and Sub-Saharan Africa, respectively."

Moreover, "Latin America and the Caribbean continues to be a region with significant imbalances. The region is characterized by its low investments in R&D and innovation, its incipient use of IP systems, and a disconnect between the public and private sectors in the prioritization of R&D and innovation. With low innovation inputs, the region also struggles to translate these efficiently into outputs. Only Chile, Uruguay, and Brazil produce high levels of Scientific and technical articles, and only Brazil ranks high in Patents by origin."

With respect to the African continent, which the GII includes both Sub-Saharan Africa and Northern Africa, the continent "has one of the most heterogeneous innovation performances across continents. While some economies rank in the top 75 (e.g., South Africa, Tunisia, and Morocco), others rank much lower.

"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 R&D, limited science-industry linkages, low absorptive capacity of firms, limited use of IP, and a challenging business environment.

"But these are broad regional generalizations. Some economies within regions stand out because they harbor significant innovation potential.

"For example, the typical innovation leader in Africa usually has higher expenditure on education (Botswana, Tunisia) and R&D (South Africa, Kenya, Egypt), strong financial market indicators such as venture capital deals (South Africa), openness to technology adoption and inward knowledge flows, an improving research base (Tunisia, Algeria, Morocco), active use of information and communication technologies (ICTs) and organizational model creation (Kenya), as well as a stronger use of their IP systems (Tunisia and Morocco). Innovation is also more pervasive in Africa than what existing innovation data suggest."

6. Innovation is concentrated at the level of science and technology clusters in select high-income economies, plus mainly China

The report explains that "Divides also exist as to the ranking of the global science and technology (S&T) clusters. The top 100 clusters are located in 26 economies, of which 6—Brazil, China, India, Iran, Turkey, and the Russian Federation—are in middle-income economies. The U.S. continues to host the largest number of clusters (25), followed by China (17), Germany (10), and Japan (5).

Furthermore, "In 2020, Tokyo-Yokohama is the top-performing cluster again, followed by Shenzhen-Hong Kong-Guangzhou, Seoul, Beijing, and San Jose-San Francisco."

Readers will appreciate how the GII 2020, for the first time, "presents the top 100 clusters ranked by their S&T intensity—that is, the sum of their patent and scientific publication shares divided by population. Through this fresh lens, many European and U.S. clusters show more intense S&T activity than their Asian counterparts. Cambridge and Oxford in the U.K. emerge as the most S&T-intensive clusters. These two clusters are followed by Eindhoven (the Netherlands) and San Jose-San Francisco (U.S.)."

My colleagues and I find reports like the GII useful in understanding how the world is changing and how that creates opportunities to be seized and risks to be managed. How does this report help you make strategic decisions for your business?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

GSMA Report Explores How Policymakers Can Support Growth of Uganda's Tech Start-Up Ecosystem

According to a report produced by the GSM Association (GSMA), a UK-based trade organization representing the interests of mobile operators worldwide, "With 20.5 million mobile subscribers representing 45 percent of the population, mobile has become the primary form of connectivity in Uganda."

The report importantly notes the "ubiquity of mobile has made it the technology of choice for individuals seeking greater interconnectedness, superseding other communication methods. As in the rest of Africa, mobile phones in Uganda have evolved from simple communication tools to service delivery platforms that are transforming lives with innovative applications and services."

Titled Supporting the Growth of the Tech Start-up Ecosystem in Uganda: A Policy Outlook, the report, which draws "on primary research, including an online survey and stakeholder interviews with mobile operators, startups and government representatives ... examines the role of mobile in the tech start-up ecosystem in Uganda and reviews the policy environment in which start-ups operate."

Working with start-ups in Uganda since 2004, I find this report useful as it "identifies four areas in which concerted action can help overcome the barriers Ugandan start-ups face in launching, scaling and expanding internationally:"

1. Developing an enabling business environment

"Ugandan start-ups agree that although reforms to improve the ease of doing business have been helpful, entrepreneurs still face challenges, such as regulation that increases the costs and complexity of starting and running a business. Improving the rules and regulations governing start-ups are key for companies to set up, grow, mature and expand into international markets. This could involve developing supportive company registration rules to facilitate the incorporation process, and creating a conducive policy environment, for example, through the development of regulatory sandboxes."

2. Improving access to funding

"Funding remains a critical resource for stimulating entrepreneurship and economic growth. Increased availability of local and international funding has allowed start-ups to access resources from a wide range of stakeholders at different stages of development. However, the amount of funding available to Ugandan startups is not sufficient to allow them to scale and contribute more effectively to national development objectives. Initiatives to facilitate more funding for tech start-ups in Uganda should rely on data and evidence to target the stage in a start-up's lifecycle where need is greatest and where outcome is likely to produce the highest development impact for the country. This should be complemented by appropriate incentives, policies and regulation to encourage both international and national funders to invest in Ugandan start-ups."

3. Supporting the development of critical business skills

"Many start-ups lack the critical business skills required to grow a sustainable business. Learning and development initiatives designed to build business acumen and entrepreneurial skills, such as business incubators or mentorship schemes, are needed to help start-ups realize their strategic goals. Greater collaboration among key stakeholders, including established companies, incubators, start-ups and investors, can also encourage learning, boost competence and provide more opportunities for mentorship."

4. Enabling affordable access to mobile and mobile internet services

"Start-ups identified affordable and reliable access to mobile and mobile internet services as key challenges affecting their success. Limited access to these critical resources reduces entrepreneurs' ability to create new services, improve existing public services and produce content tailored to local markets. Key policy measures will be needed to address barriers to mobile internet access and use. These could include assigning sufficient amounts of spectrum in a timely and reasonable manner including coverage bands (such as the 700Mhz band) and reviewing sector-specific taxes on mobile-enabled services, including the social media tax and mobile money transaction tax, both of which increase the cost of services for start-ups."

In its conclusion, the report says "Start-ups in Uganda are making breakthroughs with mobile technology and playing a critical role in achieving national development goals. However, the tech start-up ecosystem remains characterized by high failure rates due to the lack of an enabling business environment, limited access to funding, lack of critical business skills and opportunities, and challenges in accessing affordable mobile devices and mobile internet services."

What is more, "Policymakers have a particularly important role to play in supporting the development of digital entrepreneurship and the growth of Uganda's tech start-up ecosystem. While the country has made important progress in creating policies that foster innovation and encourage entrepreneurship, more needs to be done."

What are your recommendations for how to help Ugandan entrepreneurs launch their start-up, scale their business, and expand internationally?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.