Challenge statement
Challenge type: If you are working on multiple challenges, please indicate if this is your "big bet" or "exploratory" challenge.
Please note: we ask you to only submit a maximum of 3 challenges - 1x Big Bet, 2x Exploratory. Each challenge must be submitted individually.
EXPLORATORY
Challenge statement: What is your challenge? (Please answer in specific terms: "Our challenge is that...”.)
Our challenge is what should a Manufacturing Technologies Hub look like in Ethiopia that will be host to Pan-African startups that are working to improve the productivity of manufacturing with technological advancement, promotion of sustainable practices, and creation of skilled employment.
Background: What is the history of your challenge? What is causing or driving it? Who is involved? How does the current situation look like? What undesired effects does it produce?
Africa is also the world’s most entrepreneurial continent, with an estimated 22% of the working-age population being entrepreneurs, of which 28% are female giving Africa the home-grown potential to become a startup superpower in the tech sector. However, significant structural challenges remain to be tackled to optimize the potential of Africa’s youth-led innovative startups, including its agile fintech pioneers.
Beyond the seven unicorns (i.e., startup company valued at over US$1 billion which is privately owned and not listed on a share market) and include Opay, Andela, Flutterwave, Chipper, Wave, Interswitch, MNT-Halan incubators on the continent
all of which are still struggling to create success stories, because of the lack of financial means, limited global market experience, and insufficiently trained human resources. To produce more unicorns, significant resources and more innovative approaches are needed in terms of acceleration and incubation programs that produce successful startups. African entrepreneurs and investors who want to innovate face the trifecta of constraints on finance for research and development, regulatory and governance obstacles, and lack of support for skills development.
UNDP Africa’s timbuktoo initiative is designed to help create more opportunities and bridge financing gaps in order to turn Africa into a tech knowledge and innovation powerhouse. timbuktoo is setting up high-performance pan-African Innovation Hubs across Africa with the aim of nurturing and investing in thousands of techs and tech-enabled startups solving core problems facing the continent over a ten-year period. This pan-African approach helps ensure greater success and true ownership across the continent.
Among the 10 hubs to be established, Addis Ababa will be hosting the manufacturing technologies hub (ManuTech). The hub has the intent to revolutionize the Pan-African manufacturing technology landscape. Its scope encompasses a wide range of practical, relevant, and cutting-edge technologies, including advanced robotics, automation systems, digital fabrication, and IoT applications, all tailored to address uniquely African challenges and opportunities. With a strong emphasis on agro-industrialization and value addition to the continent's abundant natural resources, it will welcome startups from all African countries working in sectors such as textile manufacturing, leather processing, and food
production. The hub's mission extends beyond technological advancement to promote sustainable practices, create skilled employment opportunities, and drive overall industrialization and economic diversification.
Therefore, how can we foster a collaborative ecosystem that harnesses the collective ingenuity of African entrepreneurs and boost Africa's global competitiveness, promote intra-African trade, and position the continent as a leader in manufacturing innovation, ultimately driving economic growth and technological self-reliance across all regions of Africa.
Quantitative evidence: What (official) data sources do you have on this challenge that better exemplifies the importance and urgency of this frontier challenge? You can add text, a link, or a picture.
There are encouraging trends over the past five years in the startup culture of Africa where the venture capital funding is growing at six times the global average in 2021, governments are implementing pro-startup legislation and continental corporation frameworks such as the AfCFTA and AU’s Startup Fund have been established. But there is more to be done as Africa is considered to be “punching below its weight” in the international race to develop technology, with only 0.2% of the value of global startups.
Even though Ethiopia was ranked 111th worldwide and 6th in East Africa in the 202 Global Startup Ecosystem Index[1].. There has been tremendous growth in startups ecosystem in the past few years that is very promising. There are about 34 ecosystem builders (incubation centers and business development support providers) in Addis Ababa and 16 investors both local and internationals[2]. There have also been successful startups such s Ride, Arif Pay, Kubik and Gebeya that have been able to raise significant capital in the global market showing the potential for Ethiopian Startups.
This growth reflects the government’s commitment to developing the ecosystem to boost economic growth and reduce youth unemployment. Through the Digital Ethiopia 2025[3] strategy, the focus given to infrastructure
(connectivity and power) and enabling systems (digital payment and e-government) have served as building blocks to support technology startups and promote e-commerce including digitization of financial and logistics sectors. The private sector equally has boldly been innovating and developing tech driven business that is pushing policy reforms in the country. These efforts are gaining strength through startup association like the Ethiopian Association
of Startup Ecosystem (EASE) and the Ethiopian Young Entrepreneurs Association (EYEA). This helps support the need to further enhance the enabling environment and ecosystems.
Currently, due to the nascent ecosystem, most of the startups in the country are at an early stage of funding (77% of startups in Addis Ababa are in the early stage, and 23% are in the post-early stage 44). As these startups continue in their journey, they are seeking support through an acceleration program that is sector-specific with experts that can provide mentorship and insights about global competitiveness.
[1] https://www.startupblink.com/startup-ecosystem/ethiopia
[2] https://www.jica.go.jp/Resource/english/our_work/thematic_issues/private/information/20230713.html
[3] https://www.lawethiopia.com/images/Policy_documents/Digital-Ethiopia-2025-Strategy-english.pdf
Qualitative evidence: What weak signals have you recently spotted that characterizes its urgency? Please provide qualitative information that better exemplifies the importance and urgency of this frontier challenge. You can add text, a link, or a picture.
To create successful startups that can attract investment to Ethiopia and have significant contributions to the economy both in job creation and in market value, Ethiopian startups will need to acquire new skill sets and optimal
markets to grow their businesses. The support will need to address challenges in overcoming capital constraints, regulatory challenges, and infrastructure deficits. Furthermore, emphasis will also be given in mainstreaming gender mainstreaming in terms of integrating a gender perspective into all stages of a business development in the acceleration programs; from ideation, product development to scaling. It is about ensuring that both women and men benefit equally from the startup's products, services, and opportunities. This is what timbuktoo can offer through its thematic hubs across the continent. It also has the broader potential to attract business and talent to Ethiopia through the manufacturing technologies (Manu-Tech) hub to be hosted in Addis Ababa.
Value proposition: What added value or unique value proposition is your Accelerator Lab bringing to solving this challenge? Why is it your Lab that needs to work on this challenge and not other actors within UNDP, other stakeholders in the country respectively? Why is it worth investing resources to this challenge?
The lab will leverage its previous work in the innovation ecosystem in Ethiopia, and the multidisciplinary background of team in engineer, architecture, and design to guide and support the establishment of the lab. In particular the lab will
- Identify partners and innovation centers on the continent to serve as implementing partners
- The lab will lead the exploration of
the ManuTech sector globally and internationally to identify sample programs to model the hub in Ethiopia after
- The labs will lead the designing and outfitting of the hub space with appropriate equipment in collaboration with designer and construction companies.
Short “tweet” summary: We would like to tweet what you are working on, can you summarize your challenge in a maximum of 280 characters?
What should a Pan-African Manufacturing Technologies Hub look like? The UNDP Ethiopia accelerator lab is exploring
what unique offerings, expertise and ecosystem features are needed to revolutionize manufacturing on the continent. #timbuktoo
Learning questions
Learning question: What is your learning question for this challenge? What do you need to know or understand to work on your challenge statement?
i) What is the manufacturing technologies ecosystem like on Africa?
ii) What advantages can Ethiopia Offer in the manufacturing Tech Sector?
iii) What specialized ecosystem support services do ManuTech startups need?
To what stage(s) in the learning cycle does your learning question relate?
Sense, Explore
Usage of methods: Relating to your choice above, how will you use your methods & tools for this learning question? What value do these add in answering your learning question?
The lab will use collective intelligence and horizon scanning to understand the state of the ManuTECH Sector in Africa and sue system thinking to identify the services and support systems needed for the startups. Then the lab will co-create the hub design and programs with the RBA and other implementing partners.
Existing data gaps: Relating to your choice above, what existing gaps in data or information do these new sources of data addressing? What value do these add in answering your learning question?
practical information and stories from the startups themselves to understand their needs and design solutions.
8Decent work and economic growth
9Industry, innovation and infrastructure
12Responsible consumption and production
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