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5 th Global Forum on Innovation & Technology Entrepreneurship East London, South Africa (30 th May, 2013) Session on: Public Entrepreneurs & Flagship Initiatives By Eng. George Mulamula CEO DTBi & Senior Govt. Advisor Tanzania. Presentation. Brief Economic Country Profile

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  1. 5th Global Forum on Innovation & Technology EntrepreneurshipEast London, South Africa (30th May, 2013) Session on: Public Entrepreneurs & Flagship Initiatives ByEng. George MulamulaCEO DTBi & Senior Govt. Advisor Tanzania

  2. Presentation • Brief Economic Country Profile • Entrepreneurship Ecosystem Domain & Stakeholders • Synopsis of Tanzania Entrepreneurship Environment • Challenges in Tanzania Entrepreneurship Ecosystem • Flagship Initiatives to address challenges • Expected Benefits • Conclusion %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  3. Brief Economic Country Profile (1/3) • Tanzania has Vision 2025, objective: • High quality livelihood • Peace, stability and unity • Good governance • A well educated society • A strong and competitive economy • In a population of 45Million, GDP per capita of $527 and GDP growth rate of 7%, with SMEs estimated to contribute around ⅓ of GDP (NBS & WB Statistics) %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  4. Brief Economic Country Profile (2/3) • Unemployment, and improving the skills of the labour force are imprinted on the government agenda as part of the 2025 development vision • The Ministry of Finance and Economic Affairs runs several initiatives focusing on unemployment, along with supporting institutions related to education and vocational training. %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  5. Brief Economic Country Profile (3/3) • Exports total 21.7% of GDP, main commodities are cash crops, primarily tobacco, cashews, coffee, cotton, tea, gold, diamonds, cloves and sisal • Imports total $11.2bn p/a, and key imports include oil, machinery, transport equipment, raw materials, and consumer goods • Even with national fibre backbone, national computer penetration very low compared to about 83% mobile penetration %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  6. Entrepreneurship Ecosystem Domain & Stakeholders (1/2) • Policy (Regulatory framework and incentives, enforcement and property rights, etc.) - Government • Culture (Tolerance for risks, mistakes & failures, innovation, experimentation, etc.) – Public & Private Sector • Capital (Micro loans, venture capital, public capital markets, Angel Investors, IP Assets etc.) – Financial & Private Sector • Markets (Distribution channels, expertise in production, entrepreneurial network, etc.) – Public & Private Sector %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  7. Entrepreneurship Ecosystem Domain & Stakeholders (2/2) • Human capital ( Skilled labour, entrepreneurship training & professional training, etc.) – Learning Institutions & Private Sector • Support /Business Development Services and capacity development (professional services such as accounting legal and technical experts etc.), including Infrastructure (telecoms, energy, transportation incubation, fibre backbone, etc.) – Public & Private Sector %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  8. Synopsis of Tanzanian Entreprenuership environment (1/5) • Following independence in 1961, Tanzania implemented a socialist state – now in a modern day Tanzania, post-Socialist legacy is still manifest in the business sphere • Lack of acceptance towards entrepreneurship which is slowly being overcome • Entrepreneurship is still seen as a ‘last resort’ for those who can’t secure formal employment %th Global Forum: Entrepreneurship & Initiatives by Mulamula 8

  9. Synopsis of Tanzanian Entreprenuership environment (2/5) • Other practical obstacles to establishing entrepreneur start-ups (which leads to many Enterprises remaining in the informal sector) include: • Cumbersome registration processes, the process often takes much longer, and involves dealing with multiple government departments with limited communications channels. (Now foreign company investments use a 1-Stop Centre at TIC) %th Global Forum: Entrepreneurship & Initiatives by Mulamula 9

  10. Synopsis of Tanzanian Entreprenuership environment (3/5) • Difficulty recruiting and retaining few skilled workers with a strong work ethic • High costs of supporting infrastructure • Lack of practical skills and tendency to ‘copycat’ successful businesses • Difficulty in getting seed funding & tendering bonds • Within the informal sector, there is a 60:40 split between rural and urban owned businesses respectively %th Global Forum: Entrepreneurship & Initiatives by Mulamula 10

  11. Synopsis of Tanzanian Entreprenuership environment (4/5) • Financial Support • Government recently increasing access to capital for SMEs (through PM’s Office & Ministry of Finance), as difficult for the majority of the population to access funding from a commercial bank • Access to microfinance institutions (MFIs) requires collateral such as a house, land or a car, which many do not have access to. • Alternative is the forming co-operatives, with the group acting as collateral in the eyes of the lender (MFI) %th Global Forum: Entrepreneurship & Initiatives by Mulamula 11

  12. Synopsis of Tanzanian Entreprenuership environment (5/5) • Focus on youth entrepreneurship • 53.3% of unemployed persons are under the age of 35, with unemployment lower amongst rural youth (32%) • Amongst unemployed youth (15-24), approximately 57% are female. • Unemployment levels are 1-3% amongst university graduates • The Ministry of Labour, Youth & Sports developing Youth Policy, administers a Youth Development Fund and a Small Entrepreneurs Loan Fund targeted at youth and other vulnerable groups. (Still requires more tangible action and attention from the government) %th Global Forum: Entrepreneurship & Initiatives by Mulamula 12

  13. Challenges in Tanzania Entrepreneurship Ecosystem(1/2) • Lack of entrepreneurship policy, even though good SME policy, while corresponding policies not entrepreneur support “friendly” • Failure to translate entrepreneurship tendencies to curriculum (change in our education system towards entrepreneurship) • Lack of adequate mentorship/coaching to entrepreneurial start-ups and exposure to role models • Limited skills (managerial & technical) %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  14. Challenges in Tanzania Entrepreneurship Ecosystem(2/2) • Mindset towards record keeping, innovation, quality and compliance still low • Low appreciation of the value/use of expertise in business for most entrepreneurs • Low level of economic and financial literacy • Poor infrastructure e.g. Power, road network etc. • Though some of the business operators run multiple businesses, graduation from micro to medium is rare %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  15. Flagship Initiatives to address Challenges (1/4) • Teknohama Business Incubator (DTBi): Incubator to build entrepreneurs with provision of full range of business development services and capacity building • Tanzania Open Data Initiative under OGP (President’s Office): through technology & innovation create entrepreneurs utilising machine readable open data for transparency, citizen participation, accountability and integrity. (Tanzania has just finished an eReadiness Open Data assessment) %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  16. Flagship Initiatives to address Challenges (2/4) • START Skills Programme (COSTECH, WB): program bringing together universities students, the public and private sector to develop and create sustainable enterprises that are ICT-based solutions in real-life settings. • Has component of entrepreneurship and innovation using open data to be made available through OGP building • Capacity building for visualization of such data (mobile and web) to allow the delivery of services and feedback from the citizens for better governance. %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  17. Flagship Initiatives to address Challenges (3/4) • Innovation Fund (COSTECH, UK DFID, DTBi & TANZICT): To address the “valley of death” syndrome, an innovation fund for entrepreneurs being set up, to be operational in Q4 2013. • Currently there is a little seed money being given to Start-up entrepreneurs who are innovative with a “bankable idea” %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  18. Flagship Initiatives to address Challenges (4/4) • New Innovation programme in developing policy & projects (WB, DTBi, Aalto University & COSTECH): to support the above initiatives through building capacity in delivery of the Tanzania Open Government Action Plan through promotion of open and collaborative models on innovation and a culture of open data. • Implementation to be by effective organizational arrangements, stakeholder ownership, policy makers & using appropriate instruments and feedback mechanisms. %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  19. Expected Benefits (1/2) • Development of mindset and enterprising culture among the youth, women & citizenry • Increased entrepreneurship training in Learning Institutions • Critical mass of youth having appropriate skills (soft & hard) to be creative, innovative & entrepreneurial • Policy statement & strategic project implementation having positive impact on Entrepreneurship & Innovation ecosystem • Increased numbers of MSMEs with high involvement of women and youth, creating jobs & wealth %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  20. Expected Benefits (2/2) • An innovation/entrepreneurial policy & enabling legal/regulatory framework from Government with supportive institutions towards entrepreneurship activities • Use of ICT in innovation & entrepreneurship, both as a tool and an enabler, while tapping the use of open data to achieve Tanzania’s Vision 2025 and being part of “code4africa” %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  21. Conclusion • The process is designed to unleash the creativity and innovation of our youth & nationals in order to find solutions for Tanzania’s pressing socio-economic problems through the lens of viable and sustainable entrepreneurship • Tanzania Govt. is dedicated to creating a viable innovative & sustainable entrepreneurship ecosystem • Partnerships are important and all are welcome to partner with Tanzania in realising her vision 2025 %th Global Forum: Entrepreneurship & Initiatives by Mulamula

  22. T H A N K YOU %th Global Forum: Entrepreneurship & Initiatives by Mulamula

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