No doubt about it, there are some factors responsible for the growth of startups in developing countries. However, could modern technology be one of the factors?
Advancements in technology over the last few decades have really helped to increase innovations and investments in various industries. This has also led to the creation of notable global tech hubs in both established and emerging markets.
As a matter of fact, innovating and generating global solutions through technology have ushered many developing nations into new heights of economic growth. The global community has been quite accommodating to startups and tech-entrepreneurs.
However, the startup ecosystem is very dynamic and divergent among the different economies. The approach that most startups take in developing nations is different from that of developed countries.
Keep in mind that most of these innovation and sustainability efforts address third-world related problems such as food security, education, fighting corruption, health, safety, among others.
What’s driving enterprise growth in developing countries?
Startups in developing countries are driven to gathering collective intelligence to spur digital innovation and growth. The growth and development of technology have led to the emergence of technology hubs in such countries as India, Colombia, Kenya, South Africa, Mauritius, Nigeria, and others.
The fact is that there has been a robust growth of e-commerce, social networking, and online money transactions. All of these growths and other innovations have propelled the startup community into investing more in technological infrastructure.
For example, there has been significant growth in Fintech services in places like India. This has made it easy to send money, and also lower transfer fees and exchange rates across different financial platforms.
Most of the developing countries have experienced some sort of technological shake-up as a result of a ripple effect from the global economic climate. Below are some of the factors that are generating opportunities for startups in developing nations.
#1]. Startup incubation and accelerator programs
Startup incubation centers and accelerator programs are some of the best-utilized tools in developing countries for promoting business. They are widely revered and appreciated by developers in these regions.
Incubation centers are strategically located in different technology hubs. They help to connect developers to accelerator programs and potential investors. Also, they are instrumental in growing innovations from seed and early stages to institutionalization.
The incubation centers and hubs are often equipped with co-working spaces, network connectivity, and like-minded collaborative individuals. A host of accelerator programs are available in these developing countries, ready to provide mentorship and financing to startups.
These incubation centers and accelerator programs benefit the developers from the collaborative assistance they get by enrolling. The success of these systems is widely recognized as a critical component of the startup ecosystems continuing to attract new members.
Startup incubation and acceleration are growing exponentially in developing countries. This is because more senior executives are committing to either creating new hubs or collaborating with existing ones in various capacities.
#2]. Ease of doing business
Countries in the developing world are increasingly improving their global rankings by simplifying business processes. Due to a favourable business environment, countries like Mauritius and India are now experiencing an uptick in the number of startups.
Sustained business reforms on starting a business and protecting investors are some of the main factors for this development. These factors have helped in creating feasible opportunities for investors to fund local startups.
The ease of doing business is determined by several quantitative measures in business regulation and business-friendly practices such as transparency and security.
#3]. Business-friendly policies
Governance and regulatory policies also play an essential role in the startup ecosystem of developing countries. In fact, this is also applicable to other developed countries as well. Drawing from global success, Colombia has developed policies geared towards growing its internal technology culture.
This campaign has compelled the Colombian government to offer tax incentives. Also, the country offers professional training programs to diversify and encourage tech-based investments. The positive move by Colombia has seen an increase in technology investments in the cities of Bogota, Cali, Barranquilla, and Medellin, especially those that address local issues.
Creating favorable regulations and policies is instrumental in supporting, promoting, and creating opportunities for tech innovations in developing countries. Foreign investors now have limitless opportunities to explore new markets in the developing world. Thanks to the concept of globalization, many developing nations have become part of the global business ecosystem.