This week I was engaged in an interesting debate with fellow economists, on how Zimbabwe's economy can enter the 21st century. For a country whose future economic revival, I have suggested in my past writings in this column, lies in harnessing the knowledge economy the major questions were whether it was feasible, or even desirable.
Colleagues argued that countries like India and China had very large populations and hence very large pools of people from which to harness talent. Others argued that it was actually the level of investment required in ICTs and other infrastructure that were critical success factors. At the end of the day, it turns out that agreement was reached that population size did not matter much, since some countries with very small populations such as Israel, are in fact tech giants.
The question I have decided to touch on this week is: How can Innovation Hubs be leveraged to jumpstart key sectors of the economy? Can technology hubs in particular help drive up economic growth and push Zimbabwe into the 21st century?
As digital technologies spread rapidly, how can we harness the "Digital Dividend" - which is the broader development benefit from using these technologies. In many instances digital technologies have boosted growth, expanded opportunities, and improved service delivery in the developed world, by increasing inclusion, efficiency, innovation in the economies. These are the main mechanisms by which digital technologies promote economic development.
However, the aggregate impact of digital technologies continues, even in the first world to fall short and is unevenly distributed. To maximise the digital dividends, and mitigate risks, requires a better understanding of how technology interacts with other, non-technical factors that are important for economic and social development. These other factors are sometimes referred to as the "analogue" complements to digital investments.
Some of these analogue factors include, human factors, which also encompass the regulatory factors include strengthening regulations that ensure competition among big businesses, adapting workers' skills to the demands of the new economy, and ensuring that all institutions remain accountable and responsible.
Tech hubs and co-working spaces are cropping up across the country and are making headlines in their effort to bring information technologies to the grassroots. Overall, these hubs are bringing many new ideas and are providing a rich source of new employment opportunities and a platform for the creation of new firms.
However, experience from elsewhere shows that these tech start-ups, like any ventures, also demonstrate a high business failure rate or at the very least varying degrees of success.
However our discussion today will not delve too deeply into examining the patterns of origin or formation of the Tech Hubs, the non-digital complements that they provide to the digital technologies, what makes for success, and the impact of government and academic sector support on the role of Tech Hubs in the emerging digital ecosystem.
Tech Hubs can be roughly divided into four or five main types - Academic Institution-led, Civil Society-led, Government-led, Private Sector Led and hybrid-led. Research shows that the civil society-led models are by far the most common, constituting for example 79 out of the 117 tech hubs that were documented across Africa in the 2016 World Development Report.
Civil society led hubs constitute to Tech Hubs which are run by foundations, Non-Governmental Organisations, Techno-activists and developer consortiums, or private sector firms which are unaffiliated with either government or academic institutions. The Hybrid-led model refers to hubs and incubators, which self-govern through an administrative board or consortium comprised of multiple stakeholders, including private sector firms ,academic organization such as the University of Zimbabwe, NGOs.
Academic institution-led and Government-led models refer to hubs that garner the largest chunk of their funding from support from such institutions, and whose organisational structure falls under the supervision of a university or government or quasi government administrative or oversight body.
While these organisations typically avail of university or Government real-estate, this is not a definitive criterion as hybrid and civil society led models often do the same, particularly when they have access to subsidised space in Government-funded technology parks.
This provides some insight into determinants of sustainability of tech hubs. In order to examine why some tech hubs fail while others flourish, and to explore ways to distribute digital dividends equitably rather than entrenching them amongst an elite few, it may be useful to consider the following three issues:
a) The link between the goals of innovation entities and their
organisational and governance structure, which often betrays a
b) The degree of public sector involvement, which may be an asset for sustainability, but not necessarily for organic growth.
c) The value-added provided by different stakeholders.
The role of city and town planners
As start-up districts proliferate, town planners should aim to build technology hubs not just with a community focus, but these must also be sensitive to broader developmental and economic goals.
A good example of this sort of thinking is shown by reference to a brief case study of small town called Durham, in North Carolina USA.
While Silicon Valley in many people's minds remains the centre of today's technology world, if one wants to see the future of American innovation, they must take a trip to Durham, North Carolina, where in a restored factory complex near downtown Durham, entrepreneurs are building companies inside warehouses where for over five generations, workers once manufactured and packaged cigarettes.
The establishment of Tech Hubs in the 130-year-old American Tobacco District, comprising a one million-square-foot mixed-use hub of apartments, restaurants, and businesses has provided the impetus for a massive regeneration to boost to rebounding downtown. But much of the action, in terms of new business development, happens in basements.
American Underground, a subterranean start-up hub situated underneath one of the turn-of-the-century buildings, has become an anchor in the city's tech resurgence, attracting more than $50 million in venture funding in the last two years, creating 1 100 jobs.
Durham city planners now understand that for a city to build a foundation for the technology industry, it needs to think beyond the old derelict buildings put up by its founders.
What lessons can be drawn from this?
Zimbabwe has a significant number of properties, industrial shells, warehouses, former municipal bars that are lying derelict. With careful re-planning and rezoning, the disused community spaces can be turned into technology and SMEs parks for small entrepreneurs and provide working spaces for future technology companies. Stakeholders should take the lead of Government and lead Zimbabwe's tech revolution. This is food for thought.
The writer is an economist. The views expressed in this article are his personal opinions and should in no way be interpreted to represent the views of any organisations that the writer is associated with.