Building the Innovation Ecosystem in Tanzania

Building the Innovation Ecosystem in Tanzania

One description of my Myers-Briggs Personality Type (ENTP) is “adept at generating conceptual possibilities and then analyzing them strategically.” For better or worse, when told a goal is unachievable, my typical response is to immediately begin brainstorming and designing ways to set a vision for the change, recruit collaborators, destroy barriers, work around stubborn obstacles and surprise the on-lookers as my team of willing change agents does the unachievable. 

Leading the Human Development Innovation Fund (HDIF) is a great role for an ENTP to find positive development solutions for the poor in Tanzania. Whereas the Government of Tanzania’s services have extended in health, education, and water and sanitation through its own resources and donor support, Tanzania continues to struggle with the quality, efficiency and sustainability in service delivery—especially for the very poor.

While the Government, donors, private sector, and civil society scale great ideas, investments must be made in the new ideas, inspired thinking, risk taking and all around disruption that are required to launch Tanzania from incrementally improving the status quo to stepping into middle income status. 

Context

Tanzania is a transitional economy facing the many structural and cultural realities of a centrally planned economy—including low availability and mobility of capital, inflation control, private resource ownership, IP protection, entrepreneurship and risk taking. For comparison, Tanzania ranks 145 out of 189 countries in the 2014 World Bank’s Doing Business report. (See Tanzania’s report here.)

HDIF utilizes the INSEAD Global Innovation Index (GII) as a guide for understanding and communicating the health of Tanzania’s innovation ecosystem. The GII is a composite indicator for a country’s innovation enabling environment and outputs, based on seven pillars: institutions; human capital and research; infrastructure; market sophistication; business sophistication; knowledge and technology outputs; and creative outputs. Based on the GII’s underlying indicators, Tanzania has ranked 123 (out of 142 and 143 ranked countries in 2013 and 2014, respectively). Tanzania’s relative political stability (institutions) and innovation linkages enhance its GII score, however this moderate strength is weakened by Tanzania’s human capital and research, market sophistication, knowledge and technology outputs, and creative outputs. By comparison, Kenya, Uganda and Rwanda all significantly surpass Tanzania in the 2014 GII with overall rankings of 85, 91, and 102, respectively.

This is the innovation context in which HDIF works, identifying and cultivating innovative approaches in the private sector to improve the quality, value for money and sustainability of basic services for human development. In part, HDIF provides funding to take evidence-based products and services out of the research lab and into real life—commercializing and scaling solutions for the poor. Our partners test new models of service delivery, use new technologies, engage a new set of providers and establish new partnerships.

As a challenge fund, HDIF does provide funding for private sector innovations. However, money isn’t enough. Ayn Rand wrote in Atlas Shrugged: “Money is only a tool. It will take you wherever you wish, but it will not replace the driver.”

Ideas + People + Resources + Organizations

Four pipelines must be developed to support the healthy scaling of innovations:

  • Ideas—the innovations
  • People—who are inspired, smart, risk taking and care about change
  • Resources—in the best form (e.g., debt, equity or grants) for the stage of innovation, and including mentoring / coaching in addition to financial support
  • Organizations—possessing the “right sized” capacity to facilitate the idea, people and funding at each stage of growth

Too often one or more of these pipelines is ignored, not considered, or simply found too daunting to approach. For example, HDIF provides grants from a large donor agency (DFID / UKAid) to the private sector to pilot or scale innovations. HDIF does not fund untested products or services; solutions must be ready to commercialize or scale. Large donor agencies have reporting and fiduciary risk expectations that differ significantly from private capital funders. Thus, for HDIF’s funding to be effective, there must be a sufficient number of quality ideas managed by people who can manage innovations and donor funding, packaged in the right size and type of organization to manage and report on the project and financials.

At HDIF, we have several management tools to help reduce the burden of donor agency funding and we are excited to share those with potential grantees and other funders (both donor and capital markets).

Inspire > Collaborate > Transform

To support the development of these four pipelines of innovations for development, HDIF works to build the innovation ecosystem. And, our first step is language. There are many confusing and often conflicting definitions of innovation. For example, no word in Kiswahili exactly translates as innovation. Native Kiswahili speakers use various words for innovation--mostly words that mean creativity, entrepreneurship or discovery. Irrespective of language limitations, often innovation is confused with research, creativity, entrepreneurship, ICT, mobile technologies and, simply, ideas that are new to a person or organization. To ease communication, we like to use a simple formula: 

Innovation = Science + Entrepreneurship + Creativity

Innovation is often technology enabled and in a developing country context innovation may be international development focused. To help support a common language around innovation and reduce confusion, HDIF has adopted Doblin’s 2011 revised 10 Types of Innovation as a framework for classifying and cultivating HDIF investments, including the theory of innovation chords to support and catalyze innovations. One of HDIF’s main internal innovations is applying the 10 Types of Innovation (which is built around large, late stage companies) to all non-state actors in developing countries. 

Armed with a common language, easy-to-use framework and seeking to build a healthy innovation ecosystem, HDIF is engaging in actions to inspire risk taking and wanderlust, encourage smart people who care about Tanzania’s future collaborate across sectors, and transform Tanzania through the scaling of innovations. This is a network approach to ecosystem building, not an infrastructure approach. If you are excited about the theory behind building ecosystems, start with Michael Porter’s Clusters and the New Economics of Competition, head to Neil Rubens, et al. A Network Analysis of Investment Firms as Resource Routers in Chinese Innovation Ecosystem, then grab Freeman’s The National System of Innovation in Historical Perspective and Victor Hwang and Greg Horowitz’s The Rainforest: The Secret to Building the Next Silicon Valley. That’s a great start!

HDIF also works closely with the Tanzania Commission for Science and Technology (COSTECH) to strengthen the culture of innovation and use of science and technology in development, ensuring that lessons learned translate into evidence-based policymaking and scaling proven innovations.

One of our most exciting activities is curating Innovation Week, where local leaders are exploring innovation in research, development, entrepreneurship, technology and the arts. Individuals and organizations from various sectors are convening events to share insights on innovation in their field of expertise for audiences and collaborators from across sectors.

We welcome you to join us in catalyzing #innovationTZ as a grantee, co-funder, ecosystem builder, or other collaborator. For Innovation Week and other updates on innovation in Tanzania, connect with HDIF through social media and online: www.hdif-tz.org,Twitter @HDIFtz, Facebook http://on.fb.me/1F2V82m and LinkedIn http://linkd.in/1AlcpAr. Use #innovationTZ to stay connected with other innovators interested in Tanzania.

And, I'll be blogging on these topics over the coming year. Please send me messages or comments with your thoughts. Collaborators welcome!

Frederick Mbuya

UAV / Data and Technology Integration Specialist

8y

Interesting piece of writing, "network approach to ecosystem building", it would be great to see some form of graphical representation of the "ecosystem", your are building. Would be great to see something that private companies and individuals could look at and say, "Hey I could help with that". I think too often the donor/expat community becomes quite insular missing out on some of the critical nuances of the environment in which they operate and worse still alienate and/or exclude those within the ecosystem who could be some of their biggest assets. I want to see more cross project/initiative pollination, less duplication of efforts, more joined up thinking. More transparency in the operation of donors and NGO's operating in Tanzania.

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Stephanie Zighe

International Development Professional

8y

Great read, thanks for sharing and for the informative links

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Stephanie Marienau Turpin

Innovative Finance & Strategic Partnerships for Social Impact

8y

Great to hear about this work, David! I look forward to learning more over the coming year!

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Sosthenes Sambua

Consultant at Diligent Consulting Limited

8y

Saafi sana David. An excellent synopsis. I look forward to been part of the team that will achieve the "impossibles" .

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