Lessons for NITDA from NASSCOM

Natural Information Technology Development Agency (NITDA) and the Federal Ministry of Communication Technology are both sponsors of a Technology Innovation Programme under which the iDEA Hubs (Information Technology Developers Accelerator) in Calabar and Lagos were built. There is also the Technology Innovation Fund set up by the Ministry Communication Technology which closed its first round of fund raising a few months ago at $16 million. NITDA is currently in talks with the Bank of Industry to set up an IT entrepreneurship fund. These are milestones and important strides in catalyzing a suitable innovation ecosystem in Nigeria.
Last December, NITDA sought to further the gains of the innovation program through a visit to India. That visit included a meeting with NASSCOM (National Association of Software and Services Companies). NASSCOM is the Indian equivalent of our own NAITEOC (National Association of IT-Enabled Outsourcing Companies).
Obviously, the visit was seminal and should be the precursor to a future, more articulated, outcome. It must have been a chance for the Nigerian delegates to get sense of what the rest of world is doing to develop or upscale their technology innovation ecosystem. But one of its most important lessons, in my view, ought to be the realization that the Nigerian Technology Innovation Program is on the right path, generally speaking.
Yes, in general, there are similarities between Nigeria and India. Like India, Nigeria now has an industry association of IT services companies (never mind its fledgling state). Like Nigeria, India has also set up an Innovation Fund (the India Innovation Fund) which provides early stage funding for technology startups. In other words, India also runs a technology incubation and accelerator program.
A second lesson for Nigeria must be that while we may be on the right path, we certainly are behind and need to do more. We need to be a lot more aggressive and ambitious. We need to proceed with greater speed because the rest of the world, even though far ahead, is not waiting. For example, the total start-ups in all of the Nigeria’s innovation hubs is far below 500. But India is planning to seed funds into 10,000 technology startups in a few years! Experts have often stated that the survival ratio of start-ups in an incubation program is 25:1 at best. In other words, for every 25 entrepreneurs only one may survive.
What this suggests is that there is a compelling need for an expansive, deliberate, planned and sustained Nigerian Technology Innovation Program beyond the current pilot schemes funded by NITDA. It is very important to point out that NITDA and its parent Ministry have pointed the way. Now the private sector must come in more vigorously. This is not to demean the pioneering efforts of Co-Creation Hub, Tony Elemelu Foundation and many other private initiatives in the innovation space. Rather, it is a call for a fuller and more vigorous involvement of the private sector in technology innovation.
This is the third lesson from the NITDA visit to India. The Indian Innovation Fund (IIF) is a private sector driven initiative by a network of investors. Unlike its Indian counterpart the Nigerian, actually Lagos, Angel Investor Network (arguably the only real investor network in all of Nigeria) needs more vigor. It would appear that the Indian Angel investment program is consolidated to provide a de-risking incentive to its promoters to invest in start-ups. On the other hand, the Nigerian Angel investment landscape is fragmented.
I do not see any reason why a technology fund in the mold of the IIF cannot be set up by the Organized Private Sector or, better still, by either the Angle Network or Venture Capitalists in Nigeria. This what clearly makes the Indian example different and potentially more successful. A private sector initiative will bring in the agility of the private sector into the innovation program. It will de-risk investments in start-ups.
Most importantly, it may most probably raise and close a bigger innovation fund for an expanded and ambitious innovation program. Only then can we, as a nation, truly begin a transformational and impactful technology innovation program. Finally, the task before NITDA as a consequence of its Indian mission is to now catalyze a private-sector-led Innovation Program and Innovation Fund. Inye Kemabonta, inye@technologylaw.
com.ng