Venture capital (VC) and private equity investors have predicted an entrepreneurial boom in Africa but warn a lack of digital skills and poor internet connectivity is holding back start-up businesses on the continent, new research for blockchain-based mobile network operator World Mobile shows.
More than four out of five (81%) of senior executives at venture capital and private equity companies questioned predict a rise in entrepreneurialism in African over the next three years, with nearly half (47%) expecting a dramatic increase.
They believe that if that happens it will feed through into an increase in the value of start-ups on the continent – currently start-ups are valued at around $7.6 billion – around 0.2% of the total $3.8 trillion value of start-ups globally**. Failure to improve connectivity, however, will put a brake on growth.
Around 91% of the senior VC and private equity executives questioned across the UK, US, the Middle East, Singapore, Hong Kong, France, and Germany believe that start-up value will more than double over the next five years as long as the business environment continues to improve.
Around six out of 10 (60%) say a lack of digital skills is currently a major block to developing a start-up culture while more than half (53%) warn about limited funding and 25% say poor internet connectivity makes it hard to start new businesses.
They are optimistic about improvements – around two out of five (42%) expect dramatic improvements in internet connectivity while 44% expect slight improvements. Around 78% expect funding to improve and 86% believe the digital skills gap on the continent will close.
More than half of those questioned (52%) believe improvements in internet connectivity will drive the rise in entrepreneurial spirit in Africa while two-thirds (65%) are confident the business environment will continue to improve.
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