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Do Mlabs Still Make a Difference? a Second Assessment Do mLabs Still Make a Difference? A Second Assessment infoDv INNOVATION & ENTREPRENEURSHIP Do mLabs Still Make a b Difference? A Second Assessment © 2017 The World Bank Group 1818 H Street NW Washington, DC 20433 Website: www.infodev.org Email: [email protected] Twitter: @infoDev Facebook: /infoDevWBG For more resources and information about mLabs, visit: https://www.infodev.org/report/do-mlabs-still-make- difference-second-assessment This work is a product of the staff of infoDev/World Bank Group. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the donors of infoDev, the World Bank Group, its Board of Directors, or the governments they represent. The World Bank Group does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions: This work is available under the Creative Commons Attribution 3.0 Unported license (CC BY 3.0) http://creativecommons.org/licenses/ by/3.0. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution: Please cite the work as follows: “Do mLabs Still Make a Difference? A Second Assessment” 2017. Washington, DC: The World Bank Group. License: Creative Commons Attribution CC BY 3.0 Photo Credits: Cover Photo: Shutterstock 2017 c ACKNOWLEDGEMENTS This assessment would not have been possible This assessment was produced by Sonjara, without the valuable contribution of all mLab Inc. and commissioned by infoDev, a global managers, mobile application developers, partnership program with the World Bank as entrepreneurs, investors, donors, incubators, the second assessment of the holistic effects accelerators, institutional partners, and of mobile application labs (mLabs), which were universities that generously made themselves implemented under the Creating Sustainable available for interviews in Armenia, Kenya, Businesses in the Knowledge Economy (CSBKE) Senegal, and South Africa. program, funded by the government of Finland Your warm welcome and extensive support in partnership with Nokia. during our visits was very much appreciated. Assessment Team To the more than 160 mLab beneficiaries, The assessment team included Siobhan Green, start-ups, firms, other entrepreneurs, and Kelvin Wong, Michael Lennon, Matthew Dawes, those vested in digital technology start-ups, Russell Southwood, Anoush Yedigaryan, Charley the assessment team is grateful to each of you Lewis, and Sylvain Béletre. Additional support for accommodating an accelerated schedule for this work was performed by Sonjara staff, and responding to last-minute requests for including Marcy Brown, Andrew Green, Margie additional information. Your inputs form the Joyce, Silvie Stankova, and Ibrahima Thiam. core of the assessment. About Sonjara Special thanks are also due to those who are not part of the mLab program for your time and Sonjara, Inc., is a woman-owned technology effort, for sharing your insights, and for helping business based in the Washington, DC, area contribute to this important program. that equips the international development community to capture the promise and power of In particular, the Sonjara team would like to give information and communication technologies— special thanks to Mariam Davtyan and Armen particularly the performance improvements Melkonyan in Yerevan; Derrick Kotze in Pretoria; emerging from smarter use of data, mobile Josiah Mugambi, Sheilah Birgen, and Lincoln technologies, and the innovation of business Njogu in Nairobi; and Regina Mbodj and Eva practices. Sow in Dakar for the warm welcome and active support provided during the exercise and for their invaluable help, patience, and guidance. At infoDev, the Sonjara team is also very grateful for contributions from Ellen Olafsen, Toni Eliasz, Temitayo Oluremi Akinyemi, Zoe Cordelia Lu, Sophia Muradyan, Maja Andjelkovic, Sarah Craig, Mutoni Karasanyi, and Lucas Regner for their intense and committed reviews and insightful feedback. Special thanks go to Yehia Eldozdar, the task team leader for the project, for his leadership. Do mLabs Still Make a d Difference? A Second Assessment TABLE OF CONTENTS EXECUTIVE SUMMARY I 5 HOW DO MLABS IMPACT THEIR DIGITAL Report Findings i ENTREPRENEURSHIP ECOSYSTEMS? 31 Summary of Second Assessment The Innovation and Entrepreneurship Enabler Recommendations iii Landscape: Rapidly Evolving 31 1 INTRODUCTION 1 Talent and Human Capital: Expanding and Growing 35 The Birth of mLabs (2011-12) 1 Access to Finance 35 First mLabs Assessment (2013-14) 2 Summary of Findings 38 Second mLabs Assessment (2016-17) 2 6 CONCLUSIONS 39 2 TECHNICAL APPROACH 7 mLabs Have Evolved in Response Methodology 7 to Their Ecosystems 39 3 HOW DO MLABS IMPACT Impact on Start-ups 39 DIGITAL START-UPS? 9 Impact on Start-ups’ Customers 40 mLab Start-ups Have Much Higher Impact on the Digital than Average Survival Rates 9 Entrepreneurship Ecosystem 40 Why Start-ups Closed and How 7 RECOMMENDATIONS 41 They Benefited from mLabs 10 Strengthen mLab How mLab Start-ups Have Matured 11 Program Management 42 mLab Start-ups Have Created Jobs 14 REFERENCES & BIBLIOGRAPHY 43 Beyond Job Creation: Income Generation through Open Markets 14 mLab Start-ups are Healthier than Average 15 Networking Is the Most Valued Service 17 Summary of Findings: mLabs have had a positive impact on incubated start-ups 19 4 HOW DO CUSTOMERS BENEFIT FROM MLAB-SUPPORTED START-UPS? 20 Revenue Stream Map 21 Economic & Social Impact Mapping 22 Revenue Streams vs. Economic and Social Impact Maps 24 Moving Away from Business to Consumer toward Business to Business 29 Pivoting Away from Social Entrepreneurship 29 Summary of Findings 30 e APPENDIX A: MLAB ECA CASE STUDY 47 APPENDIX E: METHODOLOGY 74 Introduction 47 Approach and Rationale 74 mLab ECA and the Ecosystem 50 Research Questions 74 mLab ECA and Start-up Creation Evidence Comparison between the and Development 51 First and Second Assessments 76 mLab ECA and Ranking of Sampling 76 Perception of Benefits 52 Limitations 78 mLab ECA and Digital Technology Impacts 53 APPENDIX F: QUESTIONNAIRE 79 APPENDIX B: M:LAB EAST AFRICA APPENDIX G: INTERVIEWED COMPANIES CASE STUDY 54 AND INDIVIDUALS 81 Introduction 54 m:lab EA and the Ecosystem 57 m:lab EA and Start-up Creation and Development 58 m:lab EA and the Ranking of Perception of Benefits 60 m:lab EA and Digital Technology Impacts 60 APPENDIX C: CTIC/MLAB WEST AFRICA CASE STUDY 61 Introduction 61 CTIC and the Ecosystem 63 CTIC and Start-up Creation and Development 64 CTIC and the Ranking of Perception of Benefits 66 CTIC and DigitalTechnology Impacts 66 APPENDIX D: MLAB SOUTHERN AFRICA CASE STUDY 67 Introduction 67 mLab SA and the Ecosystem 71 mLab SA and Start-up Creation and Development 72 mLab SA and the Ranking of Perception of Benefits 73 mLab SA and Digital Technology Impacts 73 Do mLabs Still Make a f Difference? A Second Assessment ACRONYM LIST AKA Also Known As B2B Business to Business B2C Business to Consumer BoP Bottom-of-Pyramid CEO Chief Executive Officer CTIC Croissance des technologies de l’information et de la communication CITI Cape Information Technology Initiative CSIR Council of Scientific and Industrial Research EA East Africa ECA mLab Eastern Europe, South Caucasus, and Central Asia ECDE Early Childhood Development and Education EIF Enterprise Incubator Foundation GDP Gross Domestic Product GSMA Groupe Speciale Mobile Association ICT Information and Communications Technology IG Illuminum Greenhouses IT Information Technology M&E Monitoring and Evaluation mLab Mobile Application Laboratory MVP Minimum Viable Product NGO Non-Government Organization SA Southern Africa SMS Short Message Service (aka Text) US United States USSD Unstructured Supplementary Service Data UX User Experience VC Venture Capital WA West Africa g Photo Credit: mLab South Africa Do mLabs Still Make a i Difference? A Second Assessment Photo Credit: East Africa iHub EXECUTIVE SUMMARY The infoDev Mobile Application Laboratory (mLab) program of documents, data, and materials provided by the mLabs seeks to harness the dynamism of digital technology and companies, as well as collecting leading practices and sectors by equipping the next generation of entrepreneurs background research from industry and stakeholder sources. to help address development goals. By combining the benefits of digital technology with the strategic benefits of a development-oriented innovative entrepreneurial REPORT FINDINGS environment, economic growth and other development objectives can be supported and achieved. mLabs Have Evolved in Response to This report is a second assessment of the mLabs program Their Ecosystems following the 2014 assessment Do mLabs Make a Difference? Since their launch in 2010 and since the 2014 assessment, This second assessment focuses on essentially the same mLabs have coevolved with their ecosystems, both influencing three questions as the first assessment. and being influenced by rapidly changing environments, marked by increased involvement by the private sector in In September 2016 the infoDev mLab program engaged both incubation and investment, and the rapid changes and Sonjara, Inc. to perform this rapid assessment in Armenia improvements in technology
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