Can Ghana Create Its Own Silicon Valley?

Minister of Communications, Haruna Iddrisu, recently revealed government plans to build a technology park to encourage high-tech entrepreneurial growth in Tema. This park is set to model successful examples such as Egypt’s Smart Village, South Africa’s Innovation Hub and the best known example, Silicon Valley of the United States. Laudable, and feasible, as this project may appear at first glance, strong doubts can and must be raised as to whether the government plan has the necessary factors to become as big a success as Silicon Valley.

To be fair, the idea of a technology park in Ghana, and the initiative behind it, is a laudable one. Silicon Valley startups have become one of the main engines of growth for the American economy since the 1990s with success stories such as Hewlett-Packard, Apple, Google and Facebook examples of the gems Silicon Valley has produced. These companies today contribute hundreds of millions of dollars to the United States and provide employment for thousands of citizens.
In Ghana, the tech sector as well as general interest in technology & software engineering is booming. Many Ghanaians have taken and are currently taking Computer Science courses in Universities and taking computer literacy and software engineering courses at independent institutions such as M.E.S.T. and N.I.I.T. A technology park would create a good environment for tech startups and established companies to collaborate, find investors, and grow their businesses to strengthen the sector as a whole in Ghana.

So granted, the idea of creating a technology park is not a bad one at all. However, in reviewing news reports of the government’s plan I must point out two large apparent holes in the plan which may cripple the idea from birth and ultimately doom it.

1.Educational Institutions (Human Capital)

-The current plans for the technology park have it sited in Tema. This may seem at first glance to either be an okay location or not to matter; after all, Tema is designated as an industrial area. Besides, does the physical location really matter? I contend that it does.  The heart of Silicon Valley in the United States is Stanford University, and that isn’t just a matter of physical location. Stanford University played a key role in the creation of Silicon Valley by providing the land, the guidance and the manpower to fuel many of Silicon Valley’s startups.  Hewlett-Packard & Google are just two examples of companies with direct connections to Stanford University in their birth. As Paul Graham (Programmer and Venture Capitalist) has noted, ‘Within the US, there are no technology hubs without first-rate universities– or at least, first-rate computer science departments.’

A similar pattern has played out in Ghana; tertiary institutions often have a hand in pushing the creation of technology startups. Examples of these are Ashesi University which DreamOval Limited is a product of and the Meltwater Entrepreneurial School of Technology (M.E.S.T.) which has taken the more direct approach of training young tech entrepreneurs then directly supporting their graduates to start their own businesses.

These facts then raise questions about the choice of Tema as a site for the technology park. Where are the technology focused educational institutions in Tema that would support and provide the manpower for this new technology park? It’s perfectly plausible that the government may plan to work on establishing new ones there but ‘first-rate’ institutions don’t just crop up overnight. In this case it may have been a better idea for the government to work with an established private or public institution with the resources to churn out the technology graduates and entrepreneurs that would populate & power this technology park.

It must be said in contrast, that the government does plan to build a second technology park on the premises of the University of Cape Coast, which seems a much more suitable location. However, UCC’s technology programs/courses would have to be supported to ensure that quality tech graduates are created. It is these graduates that will provide the entrepreneurial impetus for the technology park.

2.  Venture Capital

Apart from the ‘nerds’ that occupy it, perhaps the second most important piece of the Silicon Valley puzzle are the venture capital firms and angel investors who populate it. These investors are always eagerly looking for brilliant new ideas & startups to support. Even the craziest seeming ideas in Silicon Valley can find funding from someone, somewhere. It’s this eager investment climate that convinces young men and women to pursue their dreams and that product or service they believe will change the world.

In Ghana, however, the situation is almost completely the opposite. The difficulties in sourcing funding for SMEs as well as the ridiculously high interest rates are very well documented problems that restrict business growth and discourage people from establishing new businesses. Too often, established investors such as commercial banks in Ghana look only for the safest investments and require rock-solid proof of expected returns before they will consider putting money into a business. Consider this, companies such as Google and Facebook received millions of dollars of venture capital funding years before they even developed solid business models to monetize their services. If Zuckerberg had been Ghanaian and living here I highly doubt he would have found anyone willing to invest in his idea of Facebook at the time.

Unfortunately, simply building a technology park will not create the necessary human resources or drop the interest rates. Ghanaians can only hope that the government has a solid strategy to create and provide quality human capital of eager young tech experts and entrepreneurs. This must be done along with ensuring that there is a strong investment climate prepared to support the tech startups that will power Ghana’s future. If this is done we may soon be able to boast of our own Silicon Valley driving innovation and creating tech-based solutions to our problems.

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