The Impact of Covid-19 on the Kenyan Innovation Ecosystem

The first Covid-19 case in Kenya was confirmed by the Ministry of Health in Nairobi on 12th March 2020. This was followed by a period of lockdown of major cities with economic and social activities mostly brought to a halt. But specifically, how did the pandemic impact Kenya’s innovation ecosystem? And what can be done to assure future resilience?

KTN Global Alliance and AfriLabs – A synergy

The economic realities of the pandemic have led many within the African innovation ecosystems to look for ways to keep their innovations alive, with varying degrees of success.

In order to track the impact of the pandemic on the innovation ecosystem in Africa, AfriLabs and KTN Global Alliance worked together to deliver a rapid analysis of the innovation ecosystem’s response to the pandemic in Kenya.  Our research looked into the impact of the pandemic on the innovation ecosystem, the response to it, the success and failures and the opportunities to strengthen the Kenyan innovation ecosystem.

What has been the main impact of the pandemic?

The impact of the pandemic in Kenya is similar to the impact in South Africa and Nigeria – the two other focus countries.

The initial spread and uncertainty around the nature of the virus resulted in the implementation of a months-long nationwide lockdown by the government. A huge effort went into healthcare, ensuring large scale testing and treatment through existing and purpose-built infrastructure. Large scale economic support was made available, with a focus on supporting the basic needs of the poorest.

Many businesses and organisations had to adapt to digital purchase and delivery of goods and services, while the rest failed or temporarily suspended operations.

What are the lessons learnt?

At the most basic level, all businesses have had to adapt to the new climate, with remote working the new way of the world.

In Kenya, we found strong reciprocal support between the International community and government/public bodies. NGOs and Charities also worked effectively with the international community to address the impact of the virus. We found important lessons that should form the basis for future responses to emergencies.

There is evidence of a stronger digital education system and a drive towards medical care gear in the manufacturing sector.

We found major failings in the ability of many small or startup businesses to respond to the restrictions occasioned by the virus. Stakeholders identified lack of funding for them to execute timely pivots, lack of access to digital channels (resulting from a lack of access to affordable internet and data), lack of digital literacy and lack of accessible business mentorship and support. The innovation ecosystem eventually responded by providing many of the above support, but for many, it was too late.

Specific impact on innovation funding

In Kenya, significant funding from government and ecosystem support organisations were almost immediately redirected to feeding arrangements and the supply of food packages to the poorest of the poor. The immediate impact on innovators was far fewer funds available, especially to the already struggling early-stage startups. Furthermore, the prevailing uncertainty meant that businesses turned away from their growth strategies towards newly defined “survival strategies” resulting in fewer opportunities for the innovators, entrepreneurs and SMEs to access institutional funding.

What direction should future research and analysis take?

Innovators need skills and tools to forecast their short to medium-term fiscal situations and assess changes to these predictions in almost real-time to make quick shifts and alterations. Many startups struggle to get a firm grasp of these numbers and how they will evolve with changing economic conditions and consumer behaviours. Support organisations can help by providing technical assistance around financial modelling and data-based decision making. Also, future research and analysis into business support methods to improve or in the minimum maintain the channelling of funds to early-stage entrepreneurs in emergency times and for critical survival pivots would be helpful. Critical is the analysis of infrastructure, access to data, business coaching and mentorship as well as governmental policies required to fuel the continued growth of entrepreneurs and innovators in the local ecosystem in emergency and post-emergency times.

Recommendations towards greater resilience

Given the size and scope of the economic impact of the pandemic, there is the need to implement certain strategies for future resilience. Resilience is as much a tool for persisting during a crisis as it is for thriving. Now, more than ever, programme design and intervention strategies for players within the innovation ecosystem must be intended at assisting them build resilience in the immediate to long-term. Implementing the following recommendations would aid such resilience.

• Greater access to flexible and responsive financing support.
• Increased digital literacy and access to affordable data.
• Greater resilience through targeted policy design.
• Identify and facilitate value-driven partnerships.

You can view a slide presentation which analyses the innovation response here.

Also, read about the impact of COVID-19 on the Nigerian Innovation Ecosystem.