Nigeria: Silicon Valley Transplant 

           By Femi Oyesanya <[EMAIL PROTECTED]> 


A recent Nigerian Newspaper article cited the Nigerian Minister of the
Federal Capital Territory (FCT), Nasir El-Rufai, as saying that the
Nigerian Government has given the approval for the building of a
Technology Village. Nigeria will be building its own Silicon Valley on a
650 hectare property, located in a suburb of the Federal Capital city,
Abuja.

The Newspaper article quoted El-Rufai as saying, "we want to create a
city of knowledge in Abuja. And on the way to the airport, we have got
about 650 hectares of land we have reserved out of the Abuja
master-plan. What we hope to do with the technology village, which is
going to cost us between $300 to $400 million is to have the highest
quality infrastructure attracting the best brains in information and
bio-technology, pharmaceutical and Information Technology (IT) research
to work in Abuja." (1)

The decision to build a Technology Village must be the Federal Nigerian
Government solution to addressing gaps that exist in Technology growth.
Several studies have noted that Nigeria lags behind in most Technology
development. A formal study conducted in 2003, by the Economist
Intelligence Unit and IBM, concluded that "E-business in Nigeria faces
serious obstacles: inadequate telecoms infrastructure, unreliable power
supply and authorities who, by and large, lack the means to push
e-business forward" (2) In short, there are two primary reason for
Technology Development failures in Nigeria:

(a) Lack of Technology Development supporting Infrastructure, such as
Power Supply, Water Supply, Fiber Optics Telecommunications Network,
Transportation, etc.

(b) Lack of appropriate Technology Development and Technology Growth
Acceleration Policies.

The proposed Nigerian Silicon Valley sounds impressive at first
analysis, given the problem with basic Infrastructure; one can argue
that a Technology Village can isolate itself from some of the
infrastructural problems. For example, the Village could have its own
Independent Power Plant, Water, Supply, and Transportation System.

A Nigerian Silicon Valley could be an artificial Technology Oasis. This
Technology Oasis would be home to Nigeria's Technology Development,
Technology Research, and Technology Service Industries. The Oasis would
serve as the nerve center for Nigeria's Technology research and
innovation. Venture Capital entrepreneurs would pour Investment Capital
into the Oasis, product development would create jobs, and Nigeria would
witness a Technology growth revolution.

The above wishful thinking, has to be the line of thought that went into
the decision making process, that now has the Minister of the Federal
Capital Territory wanting to dish out 650 hectares and spend $400
Million on a venture that has key success factors of business clusters
like Silicon Valley, California, missing.

Silicon Valley is not just hectares of Land. "Silicon Valley is a
special habitat for innovation and entrepreneurship. It consists of
dense, flexible networks and relationships among entrepreneurs,
investors, university researchers, consultants, skilled employees --
connecting people to ideas."(3) Abuja and its surrounding satellite
towns, do not yet have the supporting underlying Technology readiness
capacity needed to transplant a Silicon Valley clone.

The first missing element of success, which arguably might be the most
important, is that Abuja does not have a major research oriented
University.

Outside of governmental affiliated research bodies, such as: National
Space Research and Development Agency (NASRDA), Sheda Science and
Technology Complex (SHESTCO), National Agency for Science and
Engineering Infrastructure (NASENI), Energy Commission of Nigeria (ECN),
National Biotechnology Development Agency (NABDA), and a few others,
Abuja lacks the Research and Development composition that we see often
around California's Silicon Valley. For example, Abuja University was
founded only in 1988, and has not yet matured into a research oriented
academic institution. On the other hand, Silicon Valley, California, is
the home of University of California, San Francisco, Stanford, and the
University of California, Berkeley.

According to an article written by Andrew Issacs, Executive Director,
Management of Technology Program, University of California, Berkeley,
"In Silicon Valley, there were many contributing factors: (A) gradual
development of the Venture Capital industry (B) gradual improvement in
local universities (C) gradual influx of technically strong labor (D)
gradual growth in government investment in R&D. These factors reinforce
each other, over time making it more difficult for it to happen anywhere
else." (4)

It is also shocking that the recently released, National Economic
Empowerment and Development Strategy (NEEDS) did not have a provision
for building a Technology Village. Understandably, the national economic
plan can be revised to include "EL-Rufai's Valley"; it is still rather
shocking that the national Economic planning process missed a whole
Village. Furthermore, $400 Million capital investment expenditure
allocated to the building of a Technology Village might be the single
most expensive Technology project in the Country. While the impact on
other technology projects is yet to be determined, one can begin to
speculate that Technology investments in other areas, such as Technology
Education, will witness cutbacks.

Creating a "city of knowledge" is not a totally artificial process; if
one could uproot Silicon Valley, its people and its business culture and
plant it on the 650 hectares of Land in the suburb of Abuja, it might
not be a successful endeavor. There are Nigerian-specific environmental
factors which could make survivability of the Valley in Nigeria
unsustainable. With problems such as erratic supply of electricity, poor
water supply, inadequate Telecommunications access, Abuja is just not
high-technology friendly.

Another critical Silicon Valley success factor that is missing in Abuja,
is that of a skilled labor force that would be required to provide
supporting services for the High-Technology Industry. The issue here is
not that Nigeria does not have a highly educated work force, it does.
The problem is that a majority of the technically educated Nigerians
have never spent a day of gainful employment in their respective area of
expertise. Essentially, the work force will have to be re-trained,
because many Nigerians educated in Technical disciplines are becoming
obsolete, as they are yet to apply their education to practical hands-on
work experience. For Example, you have Electrical Engineers and Computer
Programmers that have graduated many years ago, but are yet to do a days
work in their potential area of expertise. Unemployment and under
employment are just too rampant. The Silicon Valley Workforce is a
hightly specialized, highly technical, and highly experienced Workforce,
drawing it's labor pool from all over the world, and from First Class
Universities in it's locality.

Another lacking success factor missing in Abuja, is that of Venture
Capital. Simply put, Venture Capital is "a fund raising technique for
companies who are willing to exchange equity in the company in return
for money to grow or expand the business." (5)

Again, the type of Venture Capital Funding that we see in California's
Silicon Valley does not yet exist in Nigeria. At the very best, Nigerian
Capital Markets are still at infancy stages.

Then also, there is the issue of the National Information Technology
Development Agency (NITDA). The planning process of building Nigeria's
Technology process is now championed by representatives of the office of
the Minister of the Federal Territory, and NITDA. To his credit, the
Office of the Minister of the Federal Capital, is known for phenomenal
success in matters relating to managing the Federal Capital. NITDA on
the other hand, is a Nigerian disappointment. A non-performing entity.

Furthermore, NITDA does not have the qualified human resource that will
be required to supplement the planning and implementation of a $400
Million project. NITDA employs only sixteen full time workers, and has
failed woefully in implementing the National Information Technology
Policy. It is almost reckless that an Agency that is now struggling with
taking over the technical management of the '.ng' domain will be at the
forefront of building a whole Technology Village. NITDA, that is yet to
produce a Nigerian Keyboard, will spearhead the cloning of Nigeria's
Silicon Valley.

What Nigeria needs to do, rather than expend resources on yet another
White Elephant project, is to place more emphasis on basics.
Electricity, Water, Transportation, and Science Education, all these,
need to be at acceptable standards, before we begin to think of building
Technology Villages.



(1) See: http://odili.net/news/source/2004/nov/18/9.html

(2) See: http://www-1.ibm.com/services/files/ibv_eiu2003.pdf

(3) Saxenian, The Next Silicon Valley, December, 2001, Joint Venture
Silicon Valley

(4) See: http://www.kotef.or.kr/download/pds/session5.pdf

(5) See: http://sbinformation.about.com/library/glossary/bldef-venture.htm


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