This decade has seen a rise in technology and innovation focused hubs in Africa, with the AfricaHubs Project by BongoHive reporting a total of over 100 such facilities on the continent.

But with the bulk of these hubs being donor funded, are these hubs sustainable and have they been effective in their missions?

ITWeb Africa’s Tefo Mohapi has sought the opinion and views of some the players in this space to get some answers.

Commercial viability

When one looks around, it is hard not to notice that thus far -- although they are relatively new on the continent -- tech hubs have produced a handful of successful projects especially in the non-profit sector.  

However, Jay Cousins, who among many other roles is a Community Catalyst at a tech hub in Egypt called ICE CAIRO, says it is “dangerous” to view hubs just in terms whether they produce commercial or “for social good” projects.

“Personally I find such divisions dangerous: the idea that these things are mutually exclusive. Commercial projects can be for social good, and socially good projects can make money. Projects like Ushahidi (iHub) for example, demonstrate that both are possible,” Cousins has told ITWeb Africa.

“For a ‘social good’ project to be sustainable, it must have a view on the commercial implications and value exchange for whatever good it is creating.

“For a commercial project to not consider its social impact is destructive to the ecosystem that it exists within, making it's own long term existence untenable and socially toxic,” Cousins added.

He further said that both criteria must be present for a sustainable tech hub.

“From the perspective of the tech hubs, each hub has it's focus. Some lean more towards the commercial side; others more towards the social. But in my experience this relates more to communication and not to what is possible within the spaces, the spaces themselves recognising the benefits of diversity.” added Cousins.

Sustainable model

Following on from the commercial versus “for social good” question is whether or not the current models are sustainable, especially if donor funding is to be stopped.

Opinion differs on this question. For instance, Bastian Gotter, managing partner of seed fund SPARK in Nigeria, says that hubs need to generate revenue for long-term survival.

“It totally depends on the hub model - those that encourage innovation just for innovation's sake, without any focus on their companies generating income will struggle. We all need to find a way to pay the bills,” Gotter said.

But Cousins has a different view.

“In my opinion yes, although it will be a challenge, it will be a larger challenge where top down models have been used from the start and financial dependencies created by the donor (often as a result of their own structural demands). Some partners behave more responsibly - however this is something donors have to consider from the beginning. Every overhead that is created, potentially creates a block on the path to sustainability and increases the perceived income required by the hub to make itself sustainable,” Cousins said.

“Sustainability is something presently being explored by the Hubs in the Afrilabs network. At our meet up in Namibia what became apparent is the variety of models being explored and the different stages each up is at with respect to sustainability... .Events, trainings, and space rental (both for members and activities) are prominent sources of income, but both costs Hubs to run and income streams vary hugely,” Cousins continued.

Meghan Semancik, who has been involved in the tech ecosystem in Nigeria both as a Business development analyst at Rocket Internet and currently as an Analyst at VC firm Rio Partners, says sustainability depends on what the project is about.

“It's typical for startups at the CCHub to receive donor funding from foundations like the Tony Elumelu Foundation. I think small amounts work at a very early stage but for-profit startups should probably be aiming for funding from private investors because they seem to offer more flexible terms in some ways. It's still a really challenging fundraising environment for so many startups with highly talented entrepreneurs,” Semancik continued.

Long Term Prospects

Gotter says that the tech hubs that will succeed in the long term are those that not only focus on and promote innovation, but those that focus on generating revenues on a long-term scale.

Gotter said “MEST (Ghana) is doing this in its capacity as a non-profit organisation, and I believe there are other tech hubs that use this model as well. Some focus on it less than others though.”

“In the West, you can build an app, build huge traffic for said app and have no means of generating any revenue - but there's still a chance someone will buy you out, simply because you have 'potential'. This is not the case in Africa - innovation and ingenuity must be married with entrepreneurship and the ability to monetise.”

On the other hand, other experts say that tech hubs in Africa could start contributing towards and become part of the global tech and innovation ecosystem as stated by Semancik.

Semancik said, “I could see them growing rapidly over the next few years in their home cities in Africa and establishing many additional formal relationships with tech hubs and educational institutions from other parts of the world.”

“I think more and more entrepreneurs from Africa will be invited to participate in top international accelerator programs in the US, Asia and Europe as well vice versa with non-Africans who wish to come over here and learn from, work with, and/or invest in, African entrepreneurs and Hubs.”

Results so far?

With some hubs punting “tech innovation” as their main focus in their respective regions, one has to ask what innovations have the various hubs produced?

Cousins has said that the BRCK mobile internet device project by the iHub team in Kenya is one such example of innovation being produced by hubs on the continent.

And Semancik has said that she witnessed a range of innovations whilst involved at the Co-Creation Hub in Nigeria.

“I've met many talented entrepreneurs and developers there, working on interesting startups (ranging from e-commerce to mobile gaming, both for-profit and non-profit), who play a very important role in the growth of the startup community in Lagos,” said Semancik.

And Gotter emphasised that MEST are doing good work in Ghana “We see that MEST Ghana have spent a lot of time helping entrepreneurs launch onto an international platform, as well as develop their products, so kudos is due there.”

“However, when we launched SPARK earlier on this year, we did so because we felt that there wasn't really anyone out there whose USP was so totally focussed on supporting young entrepreneurs in starting up their business. Nigeria's business ecosystem for tech startups is quite poor at the moment and we felt that SPARK, a company that builds companies, was ideally positioned to act as a catalyst for the emerging tech scene,” Gotter concluded.