The Global Startup Ecosystem Index & Ethiopia

Ethiopia has made it to the top 100 list of The Global Startup Ecosystem Index 2021. The Global Startup Ecosystem Index by StartupBlink is a comprehensive startup ecosystem ranking of 1000 cities and 100 countries.

StartupBlink is a startup mapping and ecosystem research center. The center provides a Global Ecosystem Map and an annual Global Startup Ecosystem Index.

The Global Ecosystem Map is a crowdsourced community resource. It lists startups, incubators, accelerators, and co-working spaces, and ecosystem leaders in the world. The map provides a visual database of the global startup ecosystem and is supported by the center’s international and local data partners.

Shega is one of the local partners of StartupBlink along with blueMoon, RENEW LLC, Addis Ababa Angels Network & Ibex Frontier. Crunchbase, SEMRush, and Meetup are international data partners.

The map has been updated since 2013 and works to enable Ecosystem developers to map, brand, and grow their ecosystem by listing their ventures on the map for free.

The Global Ecosystem Index aims to help startups, incubators, accelerators, investors and other stakeholders make informed decisions regarding which ecosystem to invest in, move to, learn from, and look out for.

Ethiopia joined the top 100 countries for the first time in 2021, ranking 100th globally. Ethiopia has jumped 5 spots compared to the year before. Addis Ababa ranked 495th in the cities segment going up 197 spots.

The index stated this growth in ecosystem performance is driven by Ethiopia’s population growth, recent effort to transition to a digital economy, and government’s actions to facilitate ease of doing business.

Other African countries on the top 100 list this year are South Africa, Nigeria, Kenya, Rwanda, Somalia, Mauritius, Ghana, Cape Verde, Namibia, Morocco, Tunisia, and Egypt. This year South Africa joined the top 50 being the highest-ranking African country at 48th place.

The index ranks countries and cities in the world based on the performance of their startup ecosystem. This performance is scored based on the sum of the scores of three essential attributes. These attributes are quality, quantity, and business environment. After points are assigned to all three attributes, the sum will be used to compare and position cities and countries on the index.

The quantity parameter measures the number of startups, and institutions that facilitate the growth of the ecosystem. The quality parameter measures the quality of stakeholders in the ecosystem such as the number of employees per startup, branches of multinational companies, and total private sector investment in startups. The business environment measures ease of doing business, internet penetration, amount of investment on R & D, and availability of tech services in an ecosystem.

The index presented that the low number of available sources of investment in Ethiopia is the major factor hindering the ecosystem’s performance.

A unique trend observed in Ethiopia’s startup ecosystem is the role of the Ethiopian diaspora as they return to push for digitalization and modernization of the economy and are granted special permits by the government to invest and operate in the country.

The Ecosystem Index has acknowledged Ride, Deliver Addis, and Amole as ecosystem champions.

In addition, the Ministry of Innovation Ethiopia (MInt), RENEW LLC, and Addis Ababa Angels Network are listed as enablers of the ecosystem, while blueMoon and Startup Factory are mentioned as notable co-working spaces & accelerators/incubators in Addis Ababa.

StartupBlink concluded, “To secure its rank in the top 100 next year, Ethiopia will have to keep up the great momentum of the Addis Ababa ecosystem while ensuring more of its cities join the top 1000.”

Access the Full 2021 Index Here