Combatting youth unemployment in Ethiopia

With its Incubator Programme in Ethiopia, PUM creates impact in two of its focus areas: youth unemployment and innovation. Five universities are already supporting start-ups with PUM’s support, and several others are in the phase of writing their business plan. Henny van Vliet visited the Business Incubation and Techno Entrepreneurship Center (BiTec) at the Bahir Dar University. It was very motivating for him to see that the several young start-ups are developing their first innovative products.

Henny van Vliet concluded after a fact-finding visit that the Ethiopian government requested several universities to develop entrepreneurship. It became clear that these universities did not know where to start. Henny explains: ‘Setting up a Business Incubator Center requires good preparation, resources, and patience. Universities are focused on research and training which means they need to apply a new approach and different skills when starting a business incubator. A successful business incubator requires good contacts with the (local) government, other training institutes, and especially the business community.’ The Business Incubator Center needs to become more detached from the university and this is often difficult to realise. It requires someone with a high position within the university to support the initiative and to understand that a different (more business-like) management structure is needed.

Universities starting business incubators

When Henny introduced PUM and its incubator experts to several universities, they were very much interested in PUM’s expertise. Nowadays, PUM has more than ten universities as clients in Ethiopia. Four clients are still in the business planning phase of the Business Incubator Center; PUM supports them in writing the business plan, including the resources (money, staff and means) needed to achieve a sustainable organisation. Only when that business plan is approved, PUM is prepared to enter the next phase with the client.

Five universities are already supporting start-ups with PUM’s collaboration: Bahir Dar Institute of Technology; Adama Science & Technology; Jimma Institute of Technology (JIT); the leading agri-university in Ehtiopia Haramaya; and the number six university in Africa, Addis Ababa University.

BiTec at the Bahir Dar University supports innovative start-ups

In April 2022, Henny was able to visit Ethiopia again and he paid a visit to the Business Incubation and Techno Entrepreneurship Center (BiTec) at Bahir Dar Institute of Technology, Bahir Dar University. ‘It was great to see with my own eyes that the model of BiTec at the University of Bahir Dar actually works. Young people with a business idea are supported to develop a prototype of their product and receive advice on how to position it in the market. I was introduced to several of these young start-ups, and they proudly showed me their innovative products.’ he explains. One of these start-ups is developing packaging papers from agricultural by-products such as rice and wheat straw to use for packaging, shopping bags, business cards and birth announcements, including the necessary equipment for production. The prototyping of the start-up is testing and validated, the market potential is reviewed and a business plan is prepared to establish the small-scale enterprise.

Future challenges

The University is very happy with the support they received from PUM experts Ton Hendrix and Antonius van Kampen. This was expressed by handing over a ‘Certificate of Recognition’ to PUM by Dr. Seifu, the Scientific Director of Bahir Dar Institute of Technology and a great supporter of the business incubator.

The next challenge to take up for the business incubators is to guide the start-ups into becoming real companies. The challenge lies mainly in finding financial resources, since there are no venture capital firms in Ethiopia, banks do not provide loans for start-ups, and there are no innovation funds from the government. Sometimes start-ups win prizes and receive a small capital from the university, but the lack of financial infrastructure is still a problematic factor.