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Silicon Savanna? Local Competence Building and International Venture Capital in Low Income Countries. The Emergence of Foreign High-Tech Investments in Kenya

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  • Daniel S.Hain
  • Roman Jurowetzki
Abstract
With the beginning of the current decade, Africa’s emergence appears to be a new consensus. In contrast to investments earlier this centure, which had mostly aid-characteristics, we nowadays see some flourishing investment hubs emerging – such as Nairobi in Kenya and Lagos in Nigeria – attracting the attention of global growth-oriented tech-investors.This development is pioneered by a number of silicon valley venture capitalists. That such investments finally arrived in sub-Saharan Africa is a positive signal, as it suggests that there exist young companies with innovative products, services, or business models which are potentially fit for international or even global markets. In this paper we investigate the pattern of current technology investments in Kenya – one of sub-Saharan Africa’s buzzing ICT centers. In many cases these financial investments are accompanied by intensive technical and business support. Besides, some of these investors are actively building up networks, and thus, connecting supported companies. This scenario is new for companies and institutions in sub-Saharan Africa and likely to contribute to local capacity building and potentially even catching-up. We explore this new phenomenon of international high-tech investments, focusing on the case of Kenya. Classifying investors and start-ups, and mapping the interaction structure between them, we aim at identifying investment patterns that can contribute to compe- tence building and sustainable development in less developed economies in the global South. To gather the data required, we are among the first to exploit the rich information and graph-based structure of the CrunchBase dataset to explore technology investments in an economically less developed context.

Suggested Citation

  • Daniel S.Hain & Roman Jurowetzki, 2015. "Silicon Savanna? Local Competence Building and International Venture Capital in Low Income Countries. The Emergence of Foreign High-Tech Investments in Kenya," Globelics Working Paper Series 2015-09, Globelics - Global Network for Economics of Learning, Innovation, and Competence Building Systems, Aalborg University, Department of Business and Management.
    • Handle: RePEc:aal:glowps:2015-09
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    References listed on IDEAS

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    More about this item

    Keywords

    Venture Capital; frugal innovation; local knowledge; local capacity building; tech start-ups; East Africa; Kenya;
    All these keywords.

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