Observation of Protocols:
The Deputy Governor Kisumu County, Vihiga County
The CEO Lake Region Economic Bloc
The Regional and County Commissioner Western / Nyanza
The MD Kenya Ports Authority and other CEOs present
County Executive Members from the lake region counties
Partners: Siemens-Stiftung, GiZ, IGOV Africa, Safaricom, Kenya Ports Authority The Conveners: Winam Capital, LakeHub and FabLab
Guests form the Private sector, public sector,
Business member organizations and CSOs/NGOs
Distinguished Ladies & Gentlemen
Congratulations on being part of the first-ever Lake Basin Innovation and Investment week! It has been inspiring to see how this initiative has grown, giving Nairobi a run for its money. This is an exciting time to be in Kenya. The Global Innovation Index 2019 ranked Kenya at position 77, the second highest position in Sub-Saharan Africa after South Africa.
Kenya ranks 56 in the latest World Bank’s in Ease of Doing Business study. This is up from 136th place in 2014! This is great news and matters for investment, jobs, incomes and livelihoods. With your vibrant entrepreneurial culture and reputation for bright, disruptive innovators, Kenya has attracted global attention from investors, private sector corporations and other entrepreneurs.
Kenya is now a top 4 sub Saharan Africa investment destination for private equity, impact investing and venture capital investors. In the UK we understand how vital entrepreneurs are and the important role that technology and innovation plays in creating economic growth and inclusive employment opportunities. You may not know this, but the UK generates more billion-dollar tech businesses than any other country on the continent of Europe.
The OECD ranks the UK as one of the best places globally to start and grow a business. London is the centre of Europe’s technology sector. But just as Kenya is more than Nairobi, we have a network of regional tech clusters across the UK, not just in London. For example, Oxford and Cambridge have each produced 10 unicorns, Manchester has produced five, Edinburgh and Leeds have both produced at least two unicorns. So there is a great story to tell about entrepreneurial hubs outside of capital cities.
There are particular benefits from an event like this Lake Basin Innovation and Investment week: grounded in the region. Tailored to local skills, advantages and context. Close to the companies, small and large, that will be your engines of growth. Connected to the universities, centres, and institutions who will give you knowledge, skills 3 and ideas. And with the support of your County governments willing you to succeed.
I am very proud of the long history the UK has working in partnership with this region. We have been working with the county governments on important issues such as Governance and Security, Human and Social Development and Sustainable Economic Development.
You may have heard of the Youth Empowerment Programme, where we are working with the county government to support capacity building for 16000 young people in Kisumu county. Or the Social Economic Inclusion Programme that is helping to improve social and economic inclusion services. Or Leave No Girl Behind and the Girls’ Education Challenge Fund – working to increase educational and vocational training opportunities. Or Employment for Sustainability Development, which is helping to close the skills gap in the county workforce in natural-resource based industries. There’s a lot here. And it has given us the inspiration and motivation to look at what other partnerships we can mobilise in Western.
Given the event today, I hope you will be pleased to hear that now we are looking at the innovation and investment space. We are supporting innovation in 3 categories: support to enterprises, support to ecosystems, and building the research and evidence basis of innovative sectors. So let’s look at Enterprise Support Enterprises at different stages face different challenges. We are building up partnership interventions at each stage, responding to enterprise needs. Idea stage: These are enterprises that have good ideas potentially solving important challenges. They have no lack of brilliance and light bulb moments. (I remember seeing some great examples here at WinLAm Fab Lab last year). But they do need support turning their ideas into viable businesses.
UK initiatives supporting such businesses include the Leaders in Innovation Fellowship programme which trains and mentors technological innovators on commercialisation of their products through a two week program in the UK followed by a grant to propel the technology innovation to the next level.
We also support about 75 fully funded post graduate scholarships for Kenyans to study in the UK each year, through the Chevening and Commonwealth scholarships schemes. So, find your passion and learn more from a world leading institution.
The next stage is the Early/seed stage enterprise. Such enterprises have proof of concept, and have demonstrated some traction through users or revenues. These are real companies. But they need support to develop and test products. UK initiatives supporting enterprises at this stage include the Assistive technology 2030 hub, which brings innovations for life-changing assistive technology to market; and the Catalytic Jobs Fund which provides technical assistance and grant support to innovations that unblock market constraints and create jobs.
We will have a Masterclass tomorrow on the Catalytic Job Fund to share more details and the application process, as we are keen to support entrepreneurs from here in Kisumu and the Western region. Then we move along to the Growth Stage: Such enterprises want to expand, increase customers, diversify into new products and markets; they need funding and support to scale. UK initiatives supporting such businesses include GoGlobal which takes African start-ups for a 2 week program to the UK, providing expert support, mentorship and links with UK tech specialists; the UK-Africa: Female Founders Program which will take women led start-ups from Kenya, 5 from South Africa and 5 from Nigeria to the UK where they can learn from each other, and meet mentors and investors.
Then we move along to the Mature companies: These have reached maturity and are looking for partnerships to continue innovating. UK Initiatives include British Chamber of Commerce events around mentoring, match-making and networking as well as partnerships between corporates such as Unilever, Safaricom and start-ups. Sector specific initiatives are also available for example in the health sector, Kenya has been identified as a potential base to manufacture vaccinations.
It is great to support individual enterprises through these programmes.
Understanding their needs related to their stage of growth, and seeing them progress along to maturity – or failing and seeing their founders move on to their next challenge! But we also recognise the importance of the basics; the foundations that companies whose founders haven’t yet had the Eureka moment will need. The five main challenges we hear from entrepreneurs are: – access to capital – finding and keeping talent – developing and using networks – accessing and growing markets – dealing with regulation.
Let’s look at these in more detail:
1. Access to Capital: Early stage businesses need patient, flexible capital. If you don’t have your own money to bootstrap your business, or a conveniently rich family member, then you are going to need to look elsewhere for affordable financing. UK supported initiatives addressing this include the Global Innovation Fund which invests from $50,000 to $15m through grants, loans and equity on an open rolling basis and a DFID Catalyst Fund for early stage enterprises.
2. Access to talent: Every successful business needs good people. Businesses continuously cite lack of talent as a major obstacle to growth, particularly referring to technical skills, soft skills and leadership and management skills. Yet, unemployment levels in Kenya are high. We are working with Kenyan Universities to develop job-ready talent. E.g through research grants, and exchange programmes. And through our new UK-Kenya Tech Hub we are running bespoke programmes on digital and other skills development priorities.
3. Access to Networks and Partnerships: We hear about friction in the ecosystem for enterprises, academia and industry. Whilst there is support available through networking organisations, much of the work is done in silos and much of the business support is Nairobi focused. UK initiatives address such challenges through our networking and convening power, bringing different stakeholders together through regular events and enabling cross-border partnerships. And we focus on industry linkages through events run by the BCCK.
Later today, our UK-Kenya tech hub will be hosting the second in our Legends series: here we are showcasing local founders who have successfully created businesses and are happy to share their knowledge and journey with you. The Legends event will be hosted here in the Acacia hotel from 4pm. We have a strong focus on supporting partnerships in academia, promoting multi-million pound science and research collaborations between the UK and Kenya through the Newton Fund and Fleming Funds. The UK-Kenya Oversight Board on Science and Innovation provides high level strategic coordination and coherence on UK investments in science and innovation and ensures alignment with Kenya’s development priorities.
4. Access to Markets: Poor infrastructure such as roads, electricity, and connectivity increase the cost of doing business and prevent products and services reaching everyone who needs them. We are working with the county governments on big infrastructure strategies, such as the Sustainable Urban Economic Development programme, and with the DFID digital impact strategy and projects improving last mile connectivity.
5. Finally, Policy/Regulation– Inefficiency, bureaucracy, and regulatory hurdles are often cited as barriers to business growth, particularly for early stage enterprises (an often cited as the reason why government people, like me, shouldn’t be at events like this: bear with me!) In the UK we enjoy tax and other incentives to promote early stage/angel funding and we have developed regulatory sandboxes and other initiatives to help innovations. Through continued dialogue, sharing of best practices learnings can be shared and contextualized for the Kenyan market, building in your own approaches. UK initiatives in Kenya to optimize policy inputs to the innovation ecosystem, include participation in the Global Steering Group on Impact investing – which works with finance regulators to crowd in more investment for good.
And a new Global Innovation Policy Accelerator which brings together Kenyan and UK government innovation agencies to debate innovation policy. So that’s how we support the enterprises, and how we partner on the ecosystem. But don’t take my word for it: we also take our research and evidence very seriously. Finding out what really works, and what doesn’t.
In Kenya, DFID funds over 70 research programmes across all the Kenyan government’s priorities across manufacturing, universal healthcare, affordable housing and food security. This helps to strengthen knowledge and innovation systems in Kenya and inform future programming. The UK also supports the Global Challenges Research Fund (GCRF) – £1.5 bn fund to support research that addresses challenges faced by developing countries, whilst also enhancing the UK’s capacity to deliver cutting-edge research.
Kenya is the third largest recipient of the GCRF, after South Africa and India. The current portfolio heavily focuses on health and food security with an emphasis on science and innovative technologies.
And finally, the Newton Fund – This is a £735million fund working in 17 countries aimed at building research and innovation partnerships to support economic development and social welfare. Since its launch in Kenya in 2016, Newton Fund has supported 21 high quality research projects, 28 innovators and 14 workshops targeted at early career researchers. Newton Fund focuses on development topics that are in line with Kenya’s development agenda including: agriculture and food security, health and life sciences, environment and climate change and renewable energy. I don’t really expect you to remember all that.
But what I hope you will take from this is: – The UK is a well-established partner in Western: we are invested through our development programmes, our businesses and our people partnerships – We see Science, tech and innovation as a very exciting growth area for UK-Kenya partnerships – This is not all about Nairobi: Lake Basin Innovation and Investment Week is putting Kisumu on the innovation map – We have a suite of programmes to help fledgling, growing and scaling enterprises, and an enabling environment. Please take the time to explore these opportunities with us.
I look forward to seeing this region flourish through its innovators.