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.