Recently, the bubble of activities in the African start-up landscape has risen remarkably, signaling why start-ups are important in Africa. Specifically in the big five ecosystems, start-ups have attracted and secured substantial funding investments to not only scale and grow but also to give credence to their ideas.
Start-ups in Africa are crucial to the continent’s growth and development. They are solving the continent’s critical challenges and restructuring it for the better. According to foundersfactory.africa, “From Health Tech start-ups preventing outbreaks through rapid diagnostics to FinTech start-ups unlocking new financial markets, and Agritech ensuring more robust food supply, African start-ups are driving unprecedented technology-enabled growth.”
Their innovative solutions are another reason why start-ups are important in Africa. They come with new ideas, often brought to life by technology, create social good, improve people’s lives, positively change the narrative of the continent globally and drive long-term, economic and inclusive growth. All of these cause a ripple effect on the African environment and society.
Start-ups may be young companies but are no less key actors in the economic and social development of Africa. Their founders, single or multiple, explore innate entrepreneurial characteristics (a trait encouraged among any given populace) to build and scale businesses which contribute significantly to setting the African economy on a progressive, upward trajectory.
Besides the above, other reasons exist as to why start-ups are important in Africa.
Economic and Social Benefits of Start-ups in Africa
- Start-ups create more jobs for the African economy. High unemployment rate is a huge issue for any government and start-ups provide a ready solution. It may be two or twenty jobs, but they are complementing the efforts of governments around Africa. Because the lower the rate of the unemployed, the fewer unsavory societal issues there will be to tackle. Engaged and paid citizens lead to improved lives and the economy.
- Start-ups solve everyday African problems. From reaching the financially excluded with technology to providing payment solutions with apps, from food delivery services to automating cooperative savings and loans, start-ups are fixing critical issues, empowering people and making routine life activities easier.
- Start-ups are the future of business in Africa and the world. Start-ups have continued to disrupt traditional business models which have been embraced by many. They are great platforms for the vastly youthful African population to start and grow their careers. They serve as creative outlets for their employees as well as give more freedom to them.
- Start-ups are innovative. Founders of start-ups are famous for their new and fresh ideas that address vital challenges in the African society. Their innovations boost entrepreneurship, allow for healthy competition and growth among fellow founders, and support a fast-moving atmosphere where inventions are regularly encouraged and explored.
- Start-ups create wealth for Africa. These fledgling companies attract huge amounts of foreign investment, as can be seen in recent years, to expand their operations in their countries and/or within Africa and beyond. When start-ups grow, they create even more opportunities for others in terms of jobs, supplies, etc. The wealth is spread either within the immediate community of the start-up or farther away in other cities or countries.