Why Map the Sierra Leone Digital and Entrepreneurial Ecosystem

Global interest in entrepreneurship has risen in recent years as policy-makers recognize its strategic importance for economic growth and development. The main focus has been creating the right enabling environment for entrepreneurial development and building the ecosystem.

In 2018, Sierra Leone ranked 132 out of 136 countries in the global entrepreneurship index and particularly ranked in the bottom 10 countries for entrepreneurship attitudes, and only moved up to 131 in 20191. However, like many other developing economies, Sierra Leone is experiencing an entrepreneurial awakening in its efforts to participate in the global entrepreneurial ecosystem building process. There is renewed effort from government, international organizations, and other key stakeholders to ensure that Sierra Leone is not left behind in this new development.
Given the inadequacy of jobs for an increasing number of graduates and low wages for those lucky enough to secure jobs, the stage is now set for entrepreneurial enthusiasts and Sierra Leoneans to take advantage of the crucial and exciting times to improve economic opportunities for themselves and actively participate in the local and global economy.
One of the main challenges is that most Sierra Leonean entrepreneurs work independently and do not share information (or operate in silos). Thus, the culture to bring talents and disruptive innovation to public knowledge and celebrate creativity is lacking. There is a great disconnect among entrepreneurial players.
Sierra Leone’s Digital and Innovation ecosystem has changed significantly over the last decade. Sierra Leone continues to make progress, being the most improved country in mobile internet penetration rates in sub-Saharan Africa, increasing from 13 percent in 2014 to 27 percent in 20192. Again, Sierra Leone has one of the fastest growing technology trends in Digital Financial Services (DFS), seeing an increase from 9 percent of adults actively using a DFS account in 2017 to 30 percent in 2019. This increase has been attributed to greater integration and more partnerships among DFS providers, and increased focus on customer activation and use case adaptation for customers3.
In order to accelerate entrepreneurial development, there is the need to bring technology and entrepreneurship together. The two pillars will have to speak to each other and be harmonised in such a way that the two ecosystems interact, and build off each other. The tech-entrepreneurial approach will guide entrepreneurs, eliminate some of their frustrations and improve their chances of success.
In recent years, there has been a renewed interest and focus on technology and entrepreneurship in Sierra Leone with the Government’s creation of two related agencies: The Small and Medium Enterprise Development Agency (SMEDA) and the Directorate of Science, Technology & Innovation (DSTI). The creation of two different agencies for technology and entrepreneurship is very laudable and also indicative of the current state of the literature on technology and entrepreneurship in Sierra Leone; new and growing but separate.
These national developments formed the foundation for the Digital Ecosystem Mapping Study in Sierra Leone. The digital ecosystem study methodology focuses on the interaction of two core components. The first is a process of desk research, data analysis and expert driven policy advisory, resembling processes used by many international organizations and consultancies. The second is a consultative process focused on working with the key stakeholders in the digital and innovation ecosystem to gather information based on the views of grassroots actors. The interaction of these components will help develop a stronger understanding of the ecosystem which will be holistic and narrowly focused, top-down and bottom up, expert driven, and user driven.

Brief description of the Project
In line with the UNCDF strategy of achieving a Sierra Leonean inclusive digital economy that leaves no one behind, along with the objective to catalysing Investments and Partnerships, it was important to connect the research facilities to academia, link innovation labs with inventors and connect entrepreneurs with start-ups. All these could only be achieved by leveraging the potential use of science, technology, and innovation as the bedrock for developing a modern economy and connecting the different stakeholders of the ecosystem. The study, financed by UNCDF with support from the Last Mile Trust Fund, UNDP and The World Bank, is to help identify gaps in expanding access and usage of digital services (including finance) that contribute to achieving the Sustainable Development Goals.
To develop efficient supporting measures and allocate resources equitably towards the development of digital economies, it is essential to gain a holistic understanding of the environment or the “tech-ecosystem” in which tech companies and other entrepreneurs operate in. The Directorate of Science, Technology & Innovation (DSTI) is leading the project implementation with support from The Small and Medium Enterprise Development Agency (SMEDA) and the Sierra Leone Economic Diversification Project (SLEDP). The project is aimed at mapping tech-ecosystems across Sierra Leone by collecting both qualitative and quantitative data to better understand and support entrepreneurs. This exercise is focused on the identification of companies applying technology to solve problems in a variety of sectors, whether in agriculture, finance, medicine, education, energy, manufacturing, or other support services for the evolvement of the ecosystem.
In order to establish the level of development of the digital ecosystem in Sierra Leone, the mapping exercise follows the framework and structure of the Inclusive Digital Ecosystem Scorecard (IDES). The inclusive digital economy scorecard (IDES) is a strategic performance tool developed by UNCDF. The IDES is a policy tool that governments can use to help set the priorities for their country’s digital transformation. It identifies the key market constraints hindering the development of an inclusive digital economy and helps set the right priorities with public and private stakeholders in each country to foster a digital economy that leaves no one behind.
The main approach for the Digital Ecosystem Mapping study is to conduct a survey among different stakeholders’ groups, complemented by a background review of available materials. The activities of the mapping exercise include desk review, design of data collection tools, data collection and data analysis, report writing and dissemination of collected data. As part of the desk research/review process, the project team has assessed the availability of the data sources, mentioned in the IDES for Sierra Leone. In designing the data collection tools, the project team developed survey tools and guidelines to capture, from the different stakeholder groups, information as identified from the IDES and the desk research. The data collected will be used to update the scorecard for Sierra Leone.
The segmentation of Sierra Leone’s fintech start-ups and the entrepreneurship ecosystem is intended to highlight the gaps that need to be addressed to accelerate the growth of the two sectors. Early findings indicate that some of the sectors’ growth inhibitors include a fragmented funding ecosystem that requires start-ups to invest a lot of time and effort to attract limited funding, a lack of affordable and skilled local talent, and low levels of financial and digital literacy among Sierra Leonean adults, particularly those in rural areas.
With a growing pool of Sierra Leone-based investment actors, the market is also becoming increasingly attractive to funders from other African countries and international investors coupled with fragmented and incomplete information on the Sierra Leone start-up and fintech eco-system, this has necessitated the development of an interactive tool. The tool creation will act as a central repository of fintechs and start-ups in Sierra Leone. UNCDF aims to fill a vital information gap in the market that may improve potential investors’ understanding of the entrepreneurial ecosystem, including the challenges and opportunities for accelerating the growth of the fintech sector to meet the financial inclusion needs of Sierra Leoneans. The interactive tool will be launched by the end of June 2021. The team will also write a report presenting the level of the digital ecosystem in Sierra Leone, following the structure of the IDES, and including opportunities for development and recommendations. Report writing will be supported by the Sierra Leone Economic Diversification Project (SLEDP).
In addition, this research will also identify the legal and institutional frameworks in science, technology and innovation (ST&I), sources of funding for ST&I related interventions and national constraints in ST&I.
The publication of the report on Digital Ecosystem Mapping Study will also be done around the same time. The plan is to connect many more ecosystems to the tool in the near future, so it will become a one stop shop for sourcing information and investment opportunities. The platform is intended to be a utility player and be agile to enable connection with a range of systems. This will ultimately ensure that the gaps identified in the different areas or sectors are bridged.

1 Acs, Szelb, & Ainsley, 2017; Zoltan, Szelb, Lafuente, & Markus, 2019
2 GSMA, 2020
3 State of the DFS Market in Sierra leone Ngwabe, Duijnhouwer, Favrichon, & Kalungulungu, 2021

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