A Silver Lining Emerges For Technology Entrepreneurs
A Silver Lining Emerges For Technology Entrepreneurs As the National Innovation Fund Committee Takes Office
Source: Weekend Post
Entrepreneur Larry Alton says entrepreneurs face many challenges in today’s ultra-competitive business world. “Entrepreneurship comes with a host of challenges, rewarding challenges, but harsh challenges nonetheless.” He says although the potential rewards for entrepreneurship are great, starting a new business at a young age is especially fraught with risk. For younger people, the challenges are unique, multiplied and particularly difficult to overcome. Lack of experience, inadequate financial resources, and a lack of self-confidence all contribute in one way or another to make it tougher for a young entrepreneur than an older counterpart.
Almost all new ventures require seed capital to support the business through the first rocky months or even years until it can generate cash and turn a profit. This initial investment may come from several sources such as personal savings, love money or soft loans from family and friends, venture capital and angel investors as well as government grants and subsidies.
In small developing economies like Botswana, innovative and talented entrepreneurs struggle to find seed funding from local investors. The Bloomberg U.S. Startup Barometer points to rigid regulations, lagging economies and the high risks of doing business in Africa as factors responsible for the low appetite of venture capitalists and angel investors in these markets. Botswana’s appeal for backup and risk capital for startups is no different.
To close this gap, the government of Botswana in line with the country’s key national priorities of spearheading the drive to using innovation as a lever for economic growth, established Botswana Innovation Hub to coordinate the establishment of a functional and integrated national innovation ecosystem. Key to this development is the creation of a National Innovation Fund that promotes innovation through technology, products and business development in the private sector by providing cash grants to companies and organisations registered with Botswana Innovation Hub.
Established under the Finance Management Act. Statutory Instrument Number 93 of 2017, the National Innovation Fund was created to close the existing gap in early stage financing for key projects of national relevance in the private sector. The fund will specifically, provide cash grants to companies or organisations registered with the Botswana Innovation Hub which may subcontract part of the development work to universities and research organisations. In addition, the National Innovation Fund serves to encourage companies and organisations awarded funds to transfer skills to citizen employees by providing cash grants to be utilised for institutional training and on the job training programmes.
To this end, a governance structure for the administration of the National Innovation Fund has been set up with Botswana Innovation Hub assuming the secretarial role and administrative office of the Fund and a National Innovation Fund Committee has been appointed to provide crucial oversight role in the Funds establishment and implementation.
Speaking at the announcement of the Committee members, the Minister of Tertiary Education, Research, Science and Technology, Dr Alfred Madigele said, “Government is spearheading the drive to use innovation as a trajectory for economic growth. To this end the establishment of the National Innovation Fund would assist to close a gap in early stage financing for key projects of national importance.”
“Government has set aside P12 million pula to be used for funding projects in the current financial year and we have put in place a robust governance framework to allow evaluation and awards from this fund,” he announced.
The National Innovation Fund Committee consists of five independent members of the public as well as representation from the private sector and the business community. Deputy Permanent Secretary in the Ministry of Tertiary Education, Research, Science and Technology, Dr Kekgonne Baipoledi assumes the Chairmanship of the committee. With a career spanning over 25 years, Dr Baipoledi has previously held various senior positions within government, specifically at the Ministry of Agriculture where he has held the posts of Head of National Veterinary Laboratories, Deputy Director, Veterinary Services and Deputy Permanent Secretary responsible for Technical Services.
General Manager of Botswana Vaccine Institute, Dr. George Matlho has been roped in from industry. Dr Matlho possesses vast experience spanning over many years within the veterinary sector with emphasis on research and business development. He has previously held a number of senior positions at Botswana Vaccine Institute and Department of Animal Health and Production.
Dr Thapelo Matsheka has been appointed to the Committee from the private sector. Dr Matsheka is currently Managing Director at Fiducia Services Limited. He is an economist and an academic with vast experience from the University of Botswana before pioneering the establishment of the government-funded Citizen Entrepreneurial Development Agency (CEDA) as Chief Executive Officer. He later moved from CEDA to Aon Botswana as the Managing Director prior assuming his current position.
Representing academia is Vice Chancellor of the University of Botswana, Prof David Norris. Previous to his appointment at UB, Professor Norris was Deputy Vice Chancellor, Research and Innovation at BIUST. Prof Norris has more than 20 years in Research and Innovation where he has published extensively and attracted much research funding. Before his appointment to BIUST, Prof Norris worked in different positions in Botswana, South Africa and the USA.
Also representing the private sector on the Committee is Oteng Sebonego. Sebonego is currently Investment Principal at NORSAD Finance and Founder at CabIT Africa an innovative venture. He bring on board, broad experience in assessment of project investments portfolio to ascertain their commercial level readiness. His experience in business enterprise development spans from both a local and regional perspective.
Heading the National Innovation Fund secretariat as Innovation Fund Coordinator is Sithembile Dingake. Dingake is trained in financial management and has worked extensively in the banking industry, development and enterprise finance and in fund management in Botswana and South Africa. Her experience straddles organizations such as Enablis Finance Corporation, Industrial Development Corporation of South Africa and Barclays Bank.
Among the Innovation Fund Committees roles and responsibilities is the approval of the fund guidelines, procedures for operation of the Fund, approval of grant application processes and subsequent applications. The Committee will also be responsible for appointment of special experts, auditors and receiving and approving of reports from audits, programme evaluation reports and reports on grant applications and approvals.
Hon. Dr Madigela said, “The Fund’s grant scheme shall follow an annual plan approved for implementation each year with agreed set targets. The criteria for funding shall take into consideration several factors which include Intellectual Property (IP), sustainability, social impact and scalability among others. He emphasized that the Fund is intended to provide grant funding to deserving projects which promote innovation through technology, product and business development in the private sector.”
Botswana Innovation Hub target sectors are Mining Technologies, Clean Technologies, BioTechnologies, Information and Communications Technologies (ICT), Indigenous Knowledge Systems and Knowledge Intensive Business Services.
Hon. Dr Madigele urged the Committee to, “Hit the ground running to ensure that the first grants are disbursed during the current financial year to give financial support to eligible entrepreneurs in the technology and innovation space.”