On Thursday 6th of April, GEN Policy hosted our monthly Startup Nations Field Call with guest speakers Sid Ali Zerrouki and Oswald Osaretin Guobadia. Both speakers were invited to discuss the differing approaches their two countries have taken as they become 'startup nations' through wide-ranging legislation that allows the government to work in partnership with the wider ecosystem to remove barriers, increase incentives, and support entrepreneurs.
Sid Ali Zerrouki is Group Managing Director of Algeria Venture where he has supported the legislative and programmatic activities undertaken by Yacine Oualid, the 29-year old minister of startups in Algeria. As highlighted in a post by our president Jonathan Ortmans in December, Algeria has moved at pace to remove barriers to inward investment, identify and offer enhanced opportunities to registered startups, and roll out a range of programs to support entrepreneurs.
Oswald Osaretin Guobadia is Senior Special Assistant on Digital Transformation to the outgoing President of Nigeria, Muhammadu Buhari and oversaw the design and implementation of the widely acclaimed Nigeria Startup Act. As highlighted recently on the GEN website, this innovative legislation facilitates the co-creation of policy between the government and startups.
Sid Ali Zerrouki gave an overview of the Algerian ecosystem and described the “upside down” approach they had taken to policy making choosing to promote individual policies from the ground up rather than launching a single package of startup reforms. His presentation highlighted:
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Entrepreneurship in Algeria was previously weak, but the new government in 2020 made the promotion of startups a priority for the country’s economic development
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These new policy directions are the result of a concerted effort led by the Ministry of Knowledge Economy and Startups which reflects the willingness to establish a policy in favour of technological innovation with the ultimate goal of cementing Algeria as the largest entrepreneurial hub in North Africa
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Critical to the success of this department was the injection of a fresh mindset and entrepreneurial thinking into government with a team that is mostly comprised of former entrepreneurs
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In contrast with the recent trend towards wide-reaching startup acts, the Algerian government took an “upside down” approach to ecosystem development. This means that they focused on passing individual policies and building the framework piece by piece.
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This decision was taken to avoid the lengthy and politically constrained process that would have been involved with a wide-reaching piece of legislation
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They started by giving a legal definition to startups which meant that innovative companies that have existed for less than 8 years, employ less than 250 people, and have less than 250k can apply for the startup label which gives tax incentives, access to finance and access to government facilities amongst other benefits
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The government identified financing as the most critical challenge facing Algerian startups and have launched 3 domestic funds and the SAFE for startups expanding internationally
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In total Algeria now has around 1300 startups and over 2600 innovative projects that enter one Algeria's 98 incubators with the goal of being developed into a startup
Oswald Osaretin Guobadia then talked us through the design and implementation of the Nigerian Startup Act. His presentation revealed:
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The Nigerian Startup Act (NSA) is a joint initiative by Nigeria’s tech ecosystem and the Presidency driven by the Ministry of Communications and Digital Economy to harness the potential of the digital economy through co-created regulations
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Crucially it was designed in collaboration with the private sector/ecosystem actors in a way that bridged a previously adversarial relationship
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The aim was to create an enabling environment for the Nigerian tech enabled ecosystem whilst building a better understanding between practitioners and policymakers
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Legislation of this magnitude would typically take 3-6 years to pass, however, the NSA was put in place in under a year
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One of the key inventions of the NSA is the National Council for Digital Innovation and Entrepreneurship which increases collaboration between Government and practitioners, and contains members from both (the presidents of Nigeria, 7 other government officials and 6 members of the private sector)
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The council is intended to future proof the NSA by creating a mechanism to deal with any issues that emerge or were overlooked by the legislation
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Nigeria has also set up a Startup Support Portal and Engagement Portal which is designed to facilitate conversations between practitioners and policymakers. The purpose of this is to resolve tensions between disruption and placement
Each presentation was followed by questions from Startup Nation members which covered the following areas:
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A discussion around the “entrepreneur holiday” policy that provides employees the legal right to take a leave of absence in order to launch their own business with the ability to return to their old position after 12 months if their venture proves unsuccessful
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The challenge of startups being concentrated in specific regions and how to build policies around it which facilitate growth in other regions whilst retaining the benefts of regional clusters
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A question was raised about how to evaluate ideas that are generated through universities to determine which ideas are viable businesses. It was revealed that Algeria approaches this issue by letting ecosystem actors such as incubators/accelerators make this judgement while the public sector retains responsibility for assigning the startup label to companies
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With both speakers coming from the private sector, there was a discussion around the merits of bringing entrepreneurs into the policy process to drive forward change within government
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A question was raised about regulatory capture and how emerging sectors get together to raise their concerns and compete with incumbent industries
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Oswald elaborated further on the tension between innovators who want to disrupt markets and policy makers who often see only displacement and whose job it is to protect what already exists. They key to overcoming this is building a framework that helps policy makers understand what is happening in the market place and gives the tech enabled ecosystem a voice within the policymaking process