Funding for African DeepTech Surges To USD 1.2 B Boosting AI Jobs Potential
The African tech ecosystem hit a milestone in 2023, with funding for DeepTech startups soaring to USD 1.2 B from USD 86 M in 2015, per a new report by research firm Caribou Digital. This surge underscores growing confidence in the continent’s potential to lead in emerging technologies like artificial intelligence (AI). At the heart of this growth is a powerful promise: harnessing AI to tackle one of Africa’s most pressing challenges—youth unemployment.
With 60% of Africa’s population under 25, the continent has the world’s largest youth demographic, which is projected to double by 2030. This creates an unprecedented opportunity to expand the tech talent pool, foster job creation, and drive economic growth. However, the success of this vision hinges on strategic collaboration between governments, academia, Big Tech, grassroots AI communities, and investors, the researchers put forward.
AI Hubs Fuel a Thriving Ecosystem
The findings in the recent report titled, The Role of AI Innovation Clusters in Fostering Youth Employment in Africa, show the continent’s AI ecosystem is home to 127 hubs, spread across key innovation hotspots. South Africa leads with 22% of these hubs, followed by Nigeria and Egypt at 12% each, and Kenya at 10%. These hubs represent the nexus of technological innovation and workforce development.
Grassroots communities like Data Science Africa, Deep Learning Indaba, and Data Science Nigeria are the linchpins of this ecosystem. These groups focus on upskilling local talent, showcasing African AI research globally, and connecting emerging professionals to international opportunities. Despite their impact, they face challenges like limited resources, which could hinder their ability to scale and meet the growing demand for AI talent.
“Artificial Intelligence, harnessed collaboratively, has the power to positively shape the African employment landscape and boost the economy,” said Abbie Phatty-Jobe, Research & Engagement Manager at Caribou Digital. “The success of emerging clusters depends on a collective strategic approach that tackles inclusivity and targets investment in local talent and infrastructure.”
A Ticking Clock on Youth Employment
Youth unemployment in Africa is a persistent issue, with millions of young people entering the workforce every year but finding few opportunities. AI innovation could play a transformative role in bridging this gap, but realising this potential requires significant investments in infrastructure, education, and policy.
According to a recent report, the product of a collaboration between Caribou Digital and Mastercard Foundation, there are six key components needed to drive AI innovation: grassroots AI communities, academia, human capital, policymakers, Big Tech, and investors. A collaborative effort across these domains is essential to build a robust ecosystem.
The report emphasises that academia must expand AI programs, train more professors, and align curricula with industry needs. Governments, meanwhile, need to prioritize infrastructure development—reliable electricity, affordable internet, and better data access—to support AI adoption. Big Tech has a role to play, too, by fostering equitable partnerships, ensuring knowledge transfer, and protecting data sovereignty.
The Rise of African DeepTech
The record-breaking USD 1.2 B in funding for DeepTech startups reflects a growing recognition of Africa’s untapped potential. Historically, much of this investment has focused on health and agriculture, but the report urges investors to diversify into other sectors like education and financial inclusion, where AI could have transformative impacts.
Startups are already leveraging AI to tackle real-world problems, from automating financial services to improving healthcare diagnostics. The report also highlights the importance of scaling grassroots efforts. These initiatives train young Africans in AI skills and provide a talent pipeline for the global market. By connecting local talent to global networks, they ensure that Africa can compete in the rapidly evolving AI economy.
The next few years will be pivotal for Africa’s AI ecosystem. The opportunity is vast, but so are the challenges. Stakeholders will have to act decisively for Africa to emerge as a global player in AI. This includes prioritising investment in digital infrastructure, scaling AI-focused university programs, and fostering partnerships that empower local talent rather than exploit it.
