Diagnostic Study on African startup ecosystem for greater knowledge based- economic growth: The case of Ethiopia

Birhanu Abebe

Issue :

ASRIC Journal of Social Sciences 2024 v5-i2

Journal Identifiers :

ISSN : 2795-3602

EISSN : 2795-3602

Published :

2024-12-30

Abstract

The African startup ecosystem has experienced significant growth in recent years, with an increase in funding, the number of startups, and the number of investors involved in the ecosystem. However, despite this expansion, the African startup ecosystem still represents only 0.2% of the global startup value. Much more work is needed to enable the continent to catch up with the global startup scene. The Ethiopian startup ecosystem is a part of the wider African startup ecosystem, but it falls behind in terms of funding, number of startups, and involvement of both local and international investors compared to the regional leaders (Kenya, South Africa, Egypt, and Nigeria). Analysing the startup ecosystem in Ethiopia can provide valuable insights to map the current situation of startups in Ethiopia outlining their challenges and opportunities and inform the development of strategy & other interventions focusing on youth and women- operated startups in Ethiopia. Purposive selection of study locations and respondents were made to gather data using in-depth questionnaires. The finding of this study indicated that the main challenges of the ES include lack of proper regulations, lack of right or skilled manpower (missing the required number of staff with required expertise, experience and skills), venture capital shortage, weak industry linkage, knowledge gaps, lack of creative environment, abandoning startups at seed stages, lack of strong linkage with market, limited coaching service, lack of working space, lack of networking and getting better service providers, lack of sustainable government support and collaboration. These findings with their implication will have pragmatic value in informing decision-making and interventions by the government. Key words: Innovation, Startups, Ecosystem.

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