1. Manufacturing and Tech Startup Ecosystems in Tanzania
Initial Findings
November 3, 2017

2. METHODOLOGY
Survey methodology
Analysis based on five dimensions of Global Entrepreneurship Research Network (GERN) Ecosystems’ Group standard methodology: (i) skills; (ii) support infrastructure; (iii) finance; (iv) community; and (v) constraints
Additional data collection on startups and intermediaries’ geographic location, as well as corporate practices (e.g. incorporation, hiring, credit access, etc.)
RESPONDENTS’ PROFILE
Small and Medium Enterprises in the manufacturing sector created in or after 2006, with employees
6 sectors
Agro-processing
Cement
Chemicals
Furniture
Metals
Textile
7 regions
The survey aims to provide insights on the manufacturing startup ecosystem, which includes newly emerged ventures and SMEs that have reached the scaling phase.

3. Comparing the manufacturing and tech startup ecosystems
Comparative Analysis
Comparing the manufacturing and tech startup ecosystems
Relevance of our study
Ecosystem surveys in Dar es Salaam
Tech-cost reductions have allowed the development of fast-growing startup ecosystems across the world, including developing countries
Tech startup ecosystems create a support infrastructure (e.g., mentorship, acceleration, seed investment) that can be leveraged by slower-growth startup ecosystems
There is indicative evidence of knowledge transfer mechanisms between the tech and manufacturing ecosystems in Tanzania
Manufacturing
# Entrepreneurs
487
# Startups
290
# Founders
456
Tech
# Entrepreneurs
221
# Startups
159
# Founders
239

4. Education and Job Functions Educational Experience at time of Founding
Manufacturing >> Skills
Founders have considerable technical experience but limited business acumen
Previous Role Type
Education and Job Functions
Educational Experience at time of Founding
Previous Job Function

5. Manufacturing >> SUPPORTING INFRA
Tanzania boasts three unique accelerators, with SIDO as a knowledge broker for the two ecosystems
Support Programs
(SIDO)
23 accelerated startups, 52% of which received funding
Accelerated startups received an average of 2.42 investments

6. Median Investment Amount by Year of Existence
MANUFACTURING >> FINANCE
Manufacturing firms have access to traditional financing, yet follow-up and scale-up investment is low
Median Investment Amount by Year of Existence
Life of Startup Year

7. Founders and organizations social connectivity map
MANUFACTURING >> Community
The few connectors suggest that there is an opportunity to create or extend more support programs in/to the manufacturing early stage entrepreneurship ecosystem
Founders and organizations social connectivity map
University of Dar es Salaam
SIDO

8. Education and Job Functions Educational Experience at time of Founding
TECH >> SKILLS
Most tech founders were previously analysts, with significant experience in STEM
Previous Role Type
Education and Job Functions
Educational Experience at time of Founding
Previous Job Function

9. TECH >> SUPPORTING INFRASTRUCTURE
The tech ecosystem supporting infrastructure is growing but still at a nascent stage
TECH
Accelerators

10. Tech startups have access to more venture funding and angel investment
TECH >> FINANCE
Tech startups have access to more venture funding and angel investment
Median Investment by Year of Existence
Life of Startup Year

11. Founders and organizations social connectivity map
TECH >> COMMUNITY
The University of Dar es Salaam and Buni Innovation Hub are the main ecosystem’s connectors
Founders and organizations social connectivity map
University of Dar es Salaam
BUNI

12. Number of days to complete task
ECOSYSTEMS’ CONSTRAINTS
Manufacturing performs better than tech in terms of funding and access to talent
Access to talent seems to be a constraint in the tech ecosystem, suggesting that:
Talent for basic manufacturing skills is more available, and
The manufacturing sector has not introduced tech-related jobs yet
Number of days to complete task

13. MEDELLIN TECH, COLOMBIA
ECOSYSTEMS’ MATURITY LEVEL
Cluster analysis reveals highly immature tech and manufacturing ecosystems, with limited connection among the few clusters
Manufacturing is larger and more densely connected than tech, with more than one cluster. However, both ecosystems are very immature, not allowing startups connecting with knowledge or investment easily if they are not part of the “selected” cluster
More mature ecosystems have several clusters interconnected, allowing startup founders to rapidly access knowledge and investment through one or two order of connections
MANUFACTURING
DAR ES SALAAM
TECH
DAR ES SALAAM
MEDELLIN TECH, COLOMBIA

14. Ecosystem trends: summary
The manufacturing ecosystem is more mature, producing more startups and jobs
Experience and age of founders

15. ECOSYSTEM SYNERGIES
Follow-up activities will enable us to better understand and leverage the linkages between the two ecosystems through SIDO
MANUFACTURING
Founders and organizations social connectivity map
TECH
Founders and organizations social connectivity map
University of Dar es Salaam
SIDO
BUNI

16. Startup Success Factors
Comparative ecosystem Analysis
Startup Success Factors
Short-Term: Accessing and Obtaining Seed Finance
Long-Term: Hiring Employees Over Time and Continuing to Do So
Manufacturing firms require both experience in the ecosystem and higher connectivity to members of the ecosystem (one builds the other); however, for tech startups the key is being part of the “selected” and only cluster.
For both manufacturing and tech startups, long-term success requires extensive previous work experience or additional founders that provide more experience. In tech, the support infrastructure is more developed, with mentors acting as champions of success for startups.
MANUFACTURING STARTUPS
TECH
STARTUPS
MANUFACTURING STARTUPS
TECH
STARTUPS
Higher connectivity to other founders
More years in the business
Be a core member of an influential cluster
Founders with more work experience
Having an additional founder
Having founded previous startup
Having a mentor
Having an additional founder
NEED OF ECOSYSTEM CONNECTIVITY AND MATURITY
NEED OF PRACTICAL EXPERIENCE

17. Gap analysis and future research
The gap analysis for the two ecosystems highlights areas of further research
Gaps
Policy Recommendations
Skills
There is a gap in practical business skills and business acumen of founders; tech skills are limited and constrain tech startup scale-up as well as manufacturing introduction of tech new solutions
Increase business practical education models based on experiential learning (eg, bootcamp and accelerator programs); attract experienced mentors; leverage tech ecosystem support infrastructure for other sectors.
Support Infrastructure
There is limited support infrastructure for manufacturing; accelerators in tech are still immature and there are no effective links between tech and manufacturing sector
Introduce specialized accelerator programs with manufacturing and tech sector; increase quality of existing accelerators; link with international talent and mentors (e.g. refer to best practice cases of Beirut and Tel Aviv)
Financing
There is a funding gap to scaleup firms for both manufacturing and tech; access to versatile funding is limited to tech; however, this versatile funding is difficult and cumbersome to secure.
Catalyze funding options for scaleup of firms; link funding to support infrastructure and quality of startup pipeline programs
Community
Community is very limited with very few cluster and density; there is only one basic provide of education significant to these ecosystems. International access to knowledge and investment is extremely limited.
Build community through pre-acceleration activities; create events and competitions to link tech with other sectors; link with international programs