Deep technology has been defined as technology that is based on tangible engineering innovation or scientific advances and discoveries. Deep Tech is often set apart by its profound enabling power, the differentiation it can create, and its potential to catalyse change.
Africa has had great success over the last 20 years. The last 10, in particular, have seen several advances in infrastructure across the continent and the rise in use of the internet and mobile phones. The opportunity for entrepreneurship and innovation support has also grown with the rise of over 640 innovation hubs that have been critical in catalysing innovation across the continent. We have to acknowledge though, that there are still deep-rooted problems on the continent because of which we are still struggling to experience how technology can be a real game-changer and catalyst for some of Africa’s fundamental challenges. From corruption to insufficient funding for innovators and lack of innovative cultures, there is still much to be done in ensuring a resilient innovation ecosystem. Until then, unfortunately, some of Africa’s most impactful solutions may be built outside Africa.
In this article, I look at why Africa needs to begin to embrace Deep Tech, why it is well-positioned to benefit from homegrown solutions and some considerations to be made in enabling the environment for Deep Tech. I initially shared these thoughts during a talk on Deep Technology in Africa hosted by Chatham House. I spoke alongside Dr Riam Kanso, CEO, Conception X, Malik Bedri, Partner, Diaspora Ventures. The session was moderated by Ahmed Soliman, Research Fellow, Africa Programme, Chatham House. You can watch the video here.
Deep tech is made for Africa. Africa is made for Deep Tech
Many African innovations have grown on a foundation of building solutions for social good and then profit. Technology in Africa is presented in the image of desires and needs of communities to survive and to do so with dignity. Any tool that allows Africa’s innovators to do this and do it at scale and sustainably, has a great chance of succeeding.
Deep Tech companies tend to solve intractable societal or environmental challenges. According to the 2019 Dawn Of the Deep Tech Ecosystem report by the Boston Consulting Group which has identified some 8,600 Deep Tech companies worldwide, they make up a significant share of startups tackling several United Nations’ sustainable development goals (SDG), including SDG 3 (good health and well-being, 51%), SDG 9 (industry, innovation and infrastructure, 50%) and SDG 11 (sustainable cities and communities, 28%).
Deep tech startups are also solving for the Africa Union’s Agenda 2063 to make Africa a global powerhouse of the future by among other things, improving Africans standards of living and ensuring transformed inclusive and sustainable economies on the continent. For example, DroneSig in Angola is providing geographical intelligence with the help of drones to support decision making in private and public sector that impact in agricultural and mining sectors, while Matibabu in Kenya is addressing malaria disease management by offering a cost-effective rapid early diagnosis of malaria and RxAll in Nigeria is detecting counterfeit drugs.
So, Deep Tech is a catalyst to bring about progress in Africa and for Africa to show leadership in technology.
Africa’s Investment in Deep Tech is a long game.
Developing a practical business or consumer applications in Deep Tech not only requires significant research and development (R&D) to bring them from the lab to the market, it also usually takes more time and money than launching and scaling a typical software startup. According to some research studies, a biotech startup needs about 4 years on average from incorporation to market while a blockchain startup may need about 2.5 years. A biotech startup may need about $1.2M in capital and that will be about 6 times more than a blockchain startup. This is significantly more time and money than it would take to build your average software solution, which can be done in under a year.
Investment in Deep Tech therefore has to come from private investors interested in the process of development. This means that deep tech is not for those investors looking for a quick return on investment. It will need investors invested in the continent, perhaps even on an emotional level. Current startup funding models built to identify the next shiny thing or social media platform with hundreds of millions of users, may not be patient enough.
Investment will also have to come from governments invested in building homegrown solutions in conjunction with hubs and academic institutions that are able to surface innovators in this space. Governments will offer not only funding but a guaranteed user base as well as a robust Intellectual Property framework that creates an environment that allows Deep Tech to thrive. Government is the biggest purchaser of technology in Africa – a large chunk of this money now needs to go to deep tech.
Africa has issues to address
Africa has to revisit her innovation culture to ensure that it is one that enables the ability, willingness and opportunity to innovate. For deep tech or any other innovation, to thrive and be sustainable, all players must do their part.
National and sub-national governments must prioritise ease of doing business to attract innovators, businesses and investment, for example, tax benefits for local investment in innovation. Governments should build data ecosystems on the foundation of open data as articulated in the Africa Data Consensus. Amounts of data available need to increase to form a credible foundation for usable solutions. Quality data release will allow for the creation and scaling of data-driven innovations. It will increase the effectiveness of research results in informing community needs.
We need to look at reforming the education system by rewarding innovators and inventors with opportunity. The private sector also needs to be pushing for long term favourable policies and competitive local, quality, production of commodities. The private sector must also ensure the improved impact of production on social and environmental standards. Academic institutions and innovation hubs must intentionally nurture Deep Tech ideas and in collaboration with the private sector ensure a pipeline of ideas that can be tested, developed and scaled.
Local communities must be involved in the creation of solutions especially given that for most solutions, they would be the intended market or consumers.
Improved infrastructure will be key to Africa taking full advantage of the opportunity Deep Tech presents. We must also not relent on connecting communities until the last mile is done. The more access local communities have to the process of innovation, the more likely it is that economies will build solutions that scale. Giving access to local communities also catalyses innovation. Regionally, we need to see more high end, accessible centres of excellence that allow for quantum computing.
Africa is opening up
The continental free trade area will allow African countries to enter new markets. This promises to increase uptake of homegrown innovations including Deep Tech solutions. The agreement promises to lower barriers to collaboration and trade across borders meaning that solutions will be that much easier to adapt to the needs of different African regions.
Innovators building Deep Tech solutions can now immediately map out what scale of their products across regions looks like and right from the beginning, build for continental impact.
Scale and sustainability are keywords when it comes to investment and making the case for this will make investing in African innovation by local investors more viable. The promise of entering new markets and expanding customer bases is attractive to any investor. This adds capital to expand local industries and boost domestic businesses.
Ultimately, Deep Tech presents one more opportunity for Africa to quickly transform into the best version of itself. But like with everything else, it needs Africans to grab the opportunity and make the most of it.