Workshop 1: Protecting Intellectual Capital

GES 2015 in Nairobi

Workshop 1: Protecting Intellectual Capital

Saturday, July 25

Moderator: Antony Cook, Microsoft

Panelists: 
-    Tamarind Nott, Mbiri Skincare
-    Isaac Rutenberg, Center for Intellectual Property and Information Technology Law (CIPIT), Strathmore University Law School
-    Ituze Ndutiye Colombe, INCO Icyusa
-    Victor Nzomo, Intellectual Property Assets Consulting

Estimated number of attendees:  Approximately 20

Discussion: 

Terminologies that emerged during discussion:
•    Intellectual Property (IP): A registered right over a brand or product
•    Intellectual Capital: The value (monetary) of a protected property/product
•    Patent: Exclusive right to an innovation/invention/idea
•    Copyright: Legal term to define patent
•    Trademark: Identity/name/business idea

Emphasis: So many entrepreneurial ideas are emerging throughout the world in the 21st Century. When developing and an idea/product, an entrepreneur needs to take into consideration the following:

•    Various national/regional global legal regimes governing the registration and enforcement of compliance with IP rights in frontier markets,
•    Understanding the sector so as to know who else has registered a closely related idea/brand/product. A case of the Nairobi Java House was cited when the same name could not be registered in Uganda since a close identity/name already existed.
•    Analysis of the cost of protecting the entrepreneurial idea. 
•    Protection and promotion of the source/raw materials or those involved in the thought process – look at protecting the value-chain. 
•    Be in control of and/or protect the platform upon which the idea will be promoted.  Having a protected domain will save one from penalties on violating various policies governing the use of social media. It may also prevent adversaries and staff from postings that may undermine your product/idea. 

Q & A: 

Q. Is it worth registering IPs in Africa given weak regulatory frameworks? What are tax implications of doing so? 
A. There a few countries in Africa with strong legal regimes in managing IPs. It is important to know and take advantage of existing regional mechanisms that govern IPs in French and English speaking countries in Africa. This would lower the cost of registering IPs in every country and may also assist in ensuring compliance to patents in countries where legal regimes and enforcement are weak. In addition, we need to map IP threats levels and categorize them whether emanating from small vendors or big corporations.   

On taxes, entrepreneurs are encouraged to negotiate tax incentives and share with their governments possible benefits when IPs are domiciled in their countries. 

Q. How do we ensure the interests of entrepreneurs taken on board when they are involved in the co-design with big corporations? 

A. Although business-process patenting is allowed in some legal regimes, it is not easy when big corporations are involved.  They tend to focus on product patenting rather than business/ideas/thought-process patenting. Entrepreneurs are encouraged to go beyond ideas when dealing with big companies and negotiate for flexibility from big corporations to ensure acknowledgment and protection of the entire value chain. 

Q. How do we protect content -- such are comic/TV stories -- from being developed/produced without consent. How do we ensure copyrights are protected?

A. We need to look at special incentives that may be extended to producers and distributors, while at the same time allowing the product to achieve its objectives. Emphasis should be on acknowledgement of the author of the script, when and for what purpose. This would make the producers and distributors more receptive and share the proceeds since their value-addition is also recognized.

Workshop 4: Intra-Regional Entrepreneurship and Trade

GES 2015 in Nairobi
Workshop 4:  Intra-Regional Entrepreneurship and Trade
Saturday, July 25, 2015
Number of participants – 25
Moderator – Solomon Asamwa – Vice President Africa Development Bank

Challenges
•    There is minimal trade between African countries
•    Moving personnel and talent across Africa countries is a challenge as it is not supported by most countries
•    It is more difficult for an African to work in another African country than for expatriates from other continents
•    There are immense infrastructural challenges—most of the rail transport system was set up during colonial times for extractive reasons
•    There is excessive focus on foreign direct investment (FDI) than encouraging domestic investment by the locals in African countries
•    Huge resources are required to maintain or improve Africa’s gross domestic product (GDP)
•    Corruption remains a big problem in Africa
•    Unreliable policies and neglect- the case of all customs operations closing down in Nigeria during Christmas without prior warning to businesses
•    High cost of shipping
•    Lack of intra-regional infrastructure
•    Lack of African shipping lines
•    High-cost of transferring money between countries
•     Sovereignty is sometimes an impediment to trade
•    Lack of patenting African innovations – case of MPESA not being able to benefit from other companies/ countries that utilize the innovation
•    Stereotyping – case of Nigerians being considered con-people
•    Visa issuance across African countries is problematic—case of an American getting visa at Kenyan airport yet other Africans have to secure it in advance

Opportunities
•    The Global Business Angel Network offers a huge opportunity for start-up businesses
•    Intra-regional trade creates internal markets
•    African countries need to make it easy to move goods and services across borders
•    In 2050, majority of the world’s young people will be in Africa
•    African countries needs to consider promoting FDI but also look at local and regional investors  as an opportunity
•    Partnerships with all parts of the society is required to achieve progress in Africa
•    Electricity requirements across African borders will continue to grow
•    Small businesses are the backbone for growth
•    Banks are averse to start-up businesses. Start-ups need Angel investors to demonstrate the business opportunity
•    Mentorship and networking  hand-holding are a big plus under the Angel financing package
•    The new Africa Angel network is a huge opportunity for Africa
•    National business Angel networks are important in attracting investment from abroad
•    Large corporations to  train small companies  especially in mining
•    Improve infrastructure
•    Increase flights across African countries
•    The European E-zone may be a good opportunity to set up an African A-zone
•    Improve internet connectivity

Outcomes or conclusions
•    Do we need 54 steel plants in Africa? Maybe not, but we need open borders for trade to happen across countries
•    Large corporations need to work with small businesses---Riontinto (sp) works with small local organizations to provide earth moving services in their mining operations
•    Encourage intra-Africa labor movement 
•    Improve communication between African countries than focus on the west and east
•    “Invention” was important in the 60s’ but today “Innovation” is critical
•    The world requires entrepreneurs to bring ideas to the market. 
•    There are many thinkers but very few take the ideas to the next level
•    Governments need to collaborate with Angels in order to get a bigger return on their seed money investments into small businesses
•    Angels are good for Africa too, and intra-regional Angel networks are important
Resolutions
•    Resolved to undertake “Ease of Doing Business” assessment for regional countries. During the discussion a US entrepreneur offered to donate a team of IT designers to support in the analysis
•    Africans need to invest in their own entrepreneurial projects
•    Focus on educating the west about Africa—tell the good story; talk to the positive

Workshop 3: The Missing Middle

GES 2015 in Nairobi
Workshop 3: The Missing Middle
Saturday, July 25, 2015
Moderator: James Pickup, Middle East Initiative

Panelists: 
1.    Gachao Kiuna- Transcentury
2.    Funke Opeke-Main One
3.    Ben White-VC4Africa

No. of people in the room:  Approximately 40

Key discussion points:
•    The discussion started with trying to define what “missing middle” was referred as “the valley of death” in most businesses. This the moment when you want to grow the business but you have minimal cash flow. 
•    When you visit the banks for financial support, they dismiss you.
•    This is a global problem but is more acute in developing countries.
•    The banks are more conservative here in Africa compared to the US.
•    There was discussion on what donors should do to support investment partners. Donors can and should support ventures with qualified and skilled human resource in addition to providing technical assistance
•    The donors should consider to lengthen the period of support. It should be even beyond 36 months
•    The donors should also be ready to provide “catastrophic money”; that is, they should be ready to allow the ventures to experience the first fail if need be.
•    People should not wait for the governments to solve the “missing middle” but can look to angle investors who can inject some capital to help the small venture investments. The average has been seen to be $200,000
•    Funke Oreke told of her incredible story where she built submarine cable for Nigeria to improve connectivity. It was very difficult to get financial support that she needed but AfDB stepped in. She emphasized the need to engage qualified professionals for feasibility and planning stages. She also had to ensure regulatory requirements were met. She emphasized the importance of professional networks. She ensured that she had professionals in her board that met once a week
•    Gachao talked of how Transcentury started as an investment club with 29 members and starting capital of Ksh 240,000 ($ 2400) but now it has an equity of $200 billion. Their strength was identify an appropriate market with under penetration. Hence, there is need to study why the market has not been met and what you can do to supply that market. He said the “valley of death” can get deeper and deeper. 
•    He said that great entrepreneurs do a lot with little cash
•    It is important to keep an eye on cash flow and ensure you collect your debts which can be a major problem

Questions and answers session:

Q; There was a question about sanctions imposed on Sudan. It is denying entrepreneurs opportunities for growth

Answer:
•    Funke and Ben White Need to look for angle networks and also think beyond the national boundaries and should move to any other market in Africa. This can be done by linking with others. Build strong network of organizations. There was a lot of talk about angle networks
•    Getao: Talked of learning from other mentors and get inspiration from their successes
•    One should also address the mindset to overcome challenges
Q: When do you sell a venture especially if it is struggling to stay afloat?  There was concern about multinational cannibalizing and crippling indigenous investments

Answer: 
•    Getao: It is difficult to say when the right time to sell a business. Time and opportunity are capital by themselves. Once a business reaches a certain level, the founder may not be the right person to take it to another level. 80% of the businesses are sold too late
•    Carl said that when you lose your passion, that is the time to sell.
•    James (Moderator) said that many people have attachment to businesses and don’t want to let go even to sell some equity. This is even worse in some cultures which are much closed e.g. In Middle East
•    Ben White said that some businesses are being sold too early. You can let someone take up management and take further
•    Ben White talked of cross-funding. He also said that many businesses need more than money. VCAfrica is a strong proponent of angle networks
Q: Definition of SMEs-It was said that multilateral banks discriminate against small businesses and hence need to define what SMEs are, especially women-owned. It is difficult for women to access loans?

Answer:
•    Getao: Successful businesses would increase GDP, create quality jobs and even export
•    Carl: SMEs should instead be referred to as Small Growth and Businesses 
Q: What can one do to make his/her business be attractive to the big investors?

Answer:
•    Getao: There is a need to look at the team; focus locally and built your team; how you present your idea-showing deep thinking, i.e does the person live and breathe the idea! It is good to look at the execution of the idea since at times good ideas are not executed successfully. One gets better and better with time
Q: When does culture becomes a risk? How do you manage risk in an African context?

Answer:
•    Funke: The largest procurers are government but there is a need for strong laws.
Q: Why are media houses not taking up local content (in Kenya)? This leads to low investment in the sector and banks are reluctant to provide loans?

Answer:
•    Funke: Emphasized the need to keep strong and not give up
•    Getao: The media structure was difficult but since there have been were reforms in media
•    Banker: Banking models have changed and can be able to assess risks. Once, you built credibility, you can get unsecured loans
Q: How did Transcentury grow from $2400 to $ 2 billion?

Answer:
•    Getao: Their initial idea of investing in South African Breweries did not successes but the next investments were well targeted. It now employs 3500 people. They later focused mainly on retail businesses. His parting shot was, “Entrepreneurship is not about winning big tenders.”