Developing Vibrant Industrial Clusters in Africa – Pillars and Lessons from Advanced Economies

by Ndubuisi Ekekwe

Executive Summary

Around the world, it has been recognized that industrial clusters are more than a collection of companies since they offer a unique business-sphere for stimulating technological innovation, nurturing new startups, attracting investment and generating socio-economic growth. The popularity and growing significance of cluster in development are underpinning new policy supports in national economic initiatives as nations seek ways to stimulate growth by supporting business environments to improve competitive positions. Silicon Valley remains the global benchmark with its leading hi-tech firms. In Africa, Nairobi in Kenya is an emerging cluster for information and communication technology (ICT) sector. Italy is known as the world’s footwear capital because of clusters in Parma, Montebelluna and other towns that have existed since the time of Michelangelo. In all these places, there are inherent business advantages arising from clustering of firms.

Clusters are effective mechanisms that help to concentrate resources and align trade routes, diagnosing ways to generate and accelerate development processes besides being growth poles in economies. The birth of Silicon Valley stimulated a vibrant venture capital and brought lawyers with specializations in intellectual property as well as professionals in other fields that serve the technology ecosystem. Cluster developments are very strategic for national competitiveness in the global economy.

In Africa, many of the economies are experiencing high economic growth rates. However, those rosy statistics have not translated into better living standards for Africans with close to 49% of sub-Saharan African population surviving on less than $1.25 a day according to the World Bank. The asymmetry between economic growth and job opportunities cannot be decoupled from the structures of most African economies. They remain dependent on minerals, hydrocarbon and overall commodities for their foreign exchange earnings. Besides the obvious challenges which could emerge on post-mineral era, Africa is challenged by the fact that regional integration may not happen effectively without homogeneity in the economic structures. But regional integration is a vital catalyst to drive the competitiveness of the continent and expand its economic system with shared prosperity.

Competitiveness driven by knowledge based economies with industrial capacities in new areas of technology will help Africa overcome the cyclical budgetary turbulence associated with commodities. If that happens, welfare loss associated with budget shortfalls could be minimal across regional economies.  This implies that African governments must invest to drive sustainable competitiveness which will usher higher living standards for the citizens. Though most African economies have broad-based growth strategies which are tailored for the domestic market and anchored by ICT, light manufacturing, agriculture and trade, the progressive innovation process has not been stellar. We note four main factors which have stymied these countries to build prosperous diversified economies that are balanced, sustainable and largely decoupled from trade shocks and welfare loses tied to overdependence on commodities:

• Poor Governance: Despite the human capital, the quality of governance in most African countries must improve for them to be competitive in redesigning their economies for the opportunities of the 21st century.
• Education: At the tertiary education level, Africa has education crises. In the 21^st century where knowledge will define the wealth of nations and competitiveness will be driven more by brainpower than minerals and hydrocarbon, without improving its educational system, its recent achievements may be unsustainable especially in the post-mineral era. The continent must push for higher quality and relevance of tertiary education as the schools have underperformed across many metrics.
• Health: Despite the efforts of many successive governments, life expectancy at birth, infant mortality, child malnutrition and access to improved water source have only improved marginally. It could be opportunistic for the governments to reform the healthcare sector just as they have done in the telecommunication sector through privation of government clinics.
• Infrastructure: Africa must invest in power, roads, waterways and other critical infrastructure that support trade and commerce.

Most clusters in Africa are inventive with minimally scaled organic and homegrown innovations. Yet, the trajectory of advancement is promising especially in some economies as the markets attract foreign investors, better managerial and technical talents. In this paper, we explain how African can approach the development of its industrial clusters and make them vibrant. We observe that United States, Canada and Europe built their hi-tech sectors through specific intervention programs that galvanized the participations of the universities, private sector and government research labs. Exploring those countries and recent efforts in Brazil and China, we propose Five Pillars that will help Africa develop hi-tech industrial clusters across its regions. In a decade of economic growth that has brought optimism about the continent’s future, these pillars will help not just to develop vibrant industrial clusters but also help the continent live up to its promise of creating prosperity for its citizens.

1.      Introduction – The Need of Vibrant Industrial Clusters

Information and communication technology (ICT) is playing major roles in the course of socio-economic development of the Africa economy. It has redesigned major industrial areas by enabling more efficient business processes even at lower costs. In both the public and private sectors, it is driving a new vista of human and organizational capabilities that will equip the continent to compete at international levels (Oshikoya, 1998). As ICT transforms the region into a knowledge-based economic system and a cashless society made of the citizens, companies and the states in electronic-linked mutually dependent relationships, the continent will be expected to benefit in ways that will drive opportunities for the citizens (Islam, 2012). While there are potentials across different technology spheres to improve competitiveness in the continent, lack of deep structures on growing and nurturing industrial clusters are major challenges that continue to stymie developments in the continent.

As the 21st Century enters the mid of its second decade, Africa is confronted with daunting challenges of building a new generation of workforce and critically-needed infrastructure to not just compete globally but also to prepare for its post-mineral era. The continent must foster a climate of innovation and pursue sustainable growth despite evolving economic realities that strain national budgets (Ekekwe, 2010). Harvard Business School Michael E. Porter (Porter, 2003) has through his work on competitiveness explained how economic prosperity can be driven through clustering. The co-existence of firms enables them to collaborate, improve, compete, stimulate demand of supplier industries, develop specialized talents and spur innovation. This jockeying enhances productivity with abilities to venture into new markets for new revenues translating to better local jobs, industrial growth and regional prosperity. In other words, there is a correlation between clusters on other side and business growth, competitiveness and globalization on the other.

Globally, data shows that clusters play major roles in regional job growth, wages and formation of new companies. This virtuous cycle has encouraged many governments to work on ways to support clusters because of their impacts on sustainable economic growth. Since the dawn of the new democratic dispensation across most African economies, the governments have embarked on different reforms geared to retool their economies and make them more competitive (YouWin, 2014). The planning process has elements for growth, preservation, good governance and economic sustainability. Governments have also identified specific industries and consequently advocated for strategic investments to enable these industries thrive. Different initiatives have been structured to support economic and workforce development as governments work to position Africa as the preferred destination for foreign direct investment (FDI) in the emerging world.

In 2014, the African Institution of Technology, with funding from the Tony Elumelu Foundation, spent six months studying the innovation ecosystem in Nigeria by looking at the formation of clusters and how companies located therein prove relatively more competitive with better growth (Ngclustermap, 2014). The goal was to investigate the relationship between some industry clusters and the existing infrastructure to understand how Nigeria’s goals of strategic investment and economic development align. This study has shaped our understanding of some key industrial systems in Africa and what the continent must do for sustainability especially in the post-mineral era. Also, a homogenous African economy, based on knowledge economy, can support regional integration without welfare loss arising out of commodity trade shocks (AUC, 2009).

As Africa works to achieve some economic targets, developing capabilities in the industrial system will help. The continent needs vibrant clusters and companies to drive development. As the continent looks for ways to diversify its economy from hydrocarbon, clusters operating more efficiently can assist companies to develop stronger competitive capabilities that will help them succeed globally. When firms collaborate, their chances of identifying market niches, accessing the export market and influencing policy improve (Porter, 2003).  Efficient clusters with needed infrastructural support give rise to higher productivity, more business opportunity and deeper technical capabilities.  The typical triple helix of state, industry and academia must exist in Africa to improve infrastructure, university system and provide strong legal systems that will help protect and accelerate innovations.

2. Developing Industrial Cluster Infrastructure

Infrastructures perform vital services for states, firms and citizens (Enright, 1998). They improve the quality of life of people and in the process serve as catalysts to attract them to live in some communities. In Africa, it is very evident that infrastructure is an important factor that drives the formation and nurturing of the organic clusters around the continent. Most of these organic clusters are forming in the big and important cities and if these facilities are improved upon, the effectiveness of the clusters will be enhanced. The following infrastructures will impact the development of the regional clusters across Africa:

Table shows infrastructural impacts on cluster development

What Regional African Governments Can Do

Globalization is pushing multinational companies to seek for opportunities in any place they can find them. This trend which has been facilitated by new technologies will continue to determine companies that win and lose. As they seek places to invest, states, regions and nations have to compete for them. In Africa, regional governments must strengthen their comparative advantages to attract these opportunities (Elumelu, 2013). Even within a country, there will be evolving regional competitions on where firms locate their plants and factories. Just as in U.S. where California few years ago to get-ahead in stem-cell research approved a $3B bond in order to attract the best minds in biotech in the area, regions in Africa must look at ways to finance shared infrastructure by pooling resources together (Saskal, 2014). To stimulate vibrancy in the current organic clusters across Africa, the following are programs or initiatives we advocate at regional levels across the continent.

Innovation Hub Initiative: All the regional economic communities in Africa must work to designate certain areas within existing clusters as Innovation Hubs. This will help to bring regional integration at industrial level. The economic strengths of some nations may not optimally execute some serious projects, so, we reason that a regional-level plan will be more successful. The region will leverage its assets including the universities, government labs and linkages to boost competitiveness and drive investment growth (Ekekwe, 2012). They will allow private firms to administer and manage these hubs with agreed KPIs (key performance indicators). For Africa to attract multinational firms like Intel, HP, and Apple, they may need to invest in the foundation structures that may require high capital-intensive projects in semiconductors, only when they pool resources together can they achieve success.

Development Finance Institutions (DFIs): The regions must setup DFIs (development finance institutions) in order to provide capital and other resources towards promoting and developing new technologies, products and enterprises. African Development Bank and such likes are not structured for small firms. These present institutions have legal and administrative requirements that some agile and small firms are not designed to participate in. So, Africa needs to have new models to finance industry. We recommend having crowdfunding platforms managed by NEPAD regional offices that seek new ideas on industry and trade. They can partner with banks or registered investing firms to deploy capital in their regions. A key requirement will be a competitive and rigorous process that is decoupled from political patronage in funding decisions.

Accelerated Growth Hubs: Regions must setup special economic zones that will be geographically confined areas within existing clusters that enjoy tax incentives.  The goal will be to use such incentives to get disparate companies operating in the region to co-locate so that resources can be more appropriately provided to them.

3. African Regional Integration and Industrial Economy

The pursuit of industrialization and development of industrial clusters by stimulating organic clusters or setting up new ones will help in creating more homogenous economies across regions in Africa. Unlike presently where most of the countries depend on minerals, hydrocarbons and commodities to finance their budgets with disparities in their economic structures, industrializations will bring order. The key advantage will be shocks that can result to welfare loses owing to the varying prices of commodities in the international market will be solved.

For regional integration to take place, Africa must look at having ways to ensure the economic structures are largely uniform. Many African nations are still oriented in trade toward former colonizers in Europe than immediate neighbors and across African capitals; there is an understanding that integration could be a key catalyst to transform the continent (AUC, 2009).  The major challenge is how the continent could develop the plan considering the lopsided economic structures among the nations (e.g. Nigerian GDP is big in the ECOWAS region), which can affect response strategy during economic crises. This is fundamental as if major regional economic powers stay out of this integration for fear of being net losers, it could have adverse effects to realizing the continental goal.

Regions must be supported to diversify their industrial structures to enable more homogenous trade shocks, stabilize inflation and interest rates. Africa Union needs to ensure that NEPAD (New Partnership for Africa’s Development) delivers on its peer-review mechanism towards economic growth, good governance and strong fiscal policies across all economic regions. With vibrant industrial clusters across African economic communities which can morph into one African integrated community even in currency union as time grows, regional integration will evolve with strengths and competitive viabilities.

Most African economies have broad-based growth strategies which are tailored for the domestic market and anchored by ICT, light manufacturing, agriculture and trade. Four main factors have stymied these economies to build prosperous diversified economies that are balanced, sustainable and largely decoupled from trade shocks and welfare loses tied to overdependence on commodities. These issues noted below must be properly managed:

• Poor Governance: Despite the human capital, the quality of governance in most African countries must improve for them to be competitive in redesigning their economies for the opportunities of the 21st century.
• Education: At the tertiary education level, Africa has education crises. In the 21^st century where knowledge will define the wealth of nations and competitiveness will be driven more by brainpower than minerals and hydrocarbon, without improving its educational system, its recent achievements may be unsustainable especially in the post-mineral era. The continent must push for higher quality and relevance of tertiary education as the schools have underperformed across many metrics. According to World Bank, most African economies will not meet the Millennium Development Goals (MDGs). This means, they are not effectively preparing their youth for the economic opportunities of the future.
• Health: Despite the efforts of many successive governments, life expectancy at birth, infant mortality, child malnutrition and access to improved water source are still low in the region. It could be opportunistic for the governments to see how more resources can go into its legacy hospitals by privatizing them and open them to market forces.
• Infrastructure: Reforms are underway in the electric power sector with the privatization of most national grid companies (IMF, 2013). It is expected that the private investment will address the chronic issues that have affected service delivery and consequently unlock new opportunities in the region.

Besides these challenges, until Africa retools its industrial capacity, it faces a structural economic threat in near future as the world looks into a future where some of the commodities will be displaced; if automobiles are powered by hydrogen, solar and electricity, the petroleum exporting countries in Africa could suffer consequences. Also, the shale gas revolution that has enabled U.S. to reduce its oil imports will unravel oil producing countries. Across the board, declining oil revenue owing to both lower production output and weaker prices could cause shortfalls in budgetary revenues, disappearing balance of payment surplus and reduction in the foreign reserves possibly triggering macroeconomic problems.

Minerals and commodities will remain the dominant sectors in most African economies owing to their contributions in the foreign exchange earnings. They can turn these capabilities into strengths by investing appropriately in developing catalysts for an industrial economy driven by knowledge. Our state of innovation is low and one of the reasons is the overall lack of competition in the education sector both at the university and faculty levels. Africa can learn from the United States National Science Foundation (NSF) and the National Institute of Health (NIH) on how it can structure its science policy on funding and assessments of outcomes. The NSF has a mission to advance the progress of science and it accomplishes it by funding proposals for research and education made by scientists and engineers. Its medical counterpart is the National Institutes of Health. While Africa may not have the scale of NSF and NIH, it must map funds for S&T research and have a process to use rigorous peer-review system to fund grants. It must be blind to quotas and the need to balance geographical spread. It must focus on talents and the best ideas. Without a visible competitive atmosphere in education that is driven by merit and hardwork, Africa will find it difficult to develop an innovation system. Only an innovation system will bring the necessary structural economic homogeneity to support effective regional integration.

4. Pillars and Lessons from Advanced Economies

African countries need to retool their economies. Building a hi-tech sector will help create jobs in ICT and other sectors. Largely, the technology participation has been driven by consumerism and imports. For the continent to provide social inclusion by providing jobs to its citizens, light manufacturing and a new sector are vital. Here, we propose a five pillar strategy for the continent. This draws from the models that have worked for different countries/regions such as United States, Canada, and Europe through MOSIS, CMC Canada and CMP/Europractice respectively (mosis.com, cmc.ca, and europractice.com). In these programs, the governments centralized and subsidized the production of specialized electronics – key sector for modern industrial societies – to help drive innovation by reducing barrier of entry. These are government intervention programs that have driven innovations and growth in electronics in these regions. The five pillars, focusing mainly in the hardware side over the software, are:

a.       Pillar 1 – Education and Training

The goal will be to recruit top engineering talents across the continent and train them on key areas of hardware development. We identify the following areas

• Microcontroller programming:  Nearly all hardware systems rely on microcontroller as its engine.
• FPGA (field programmable gate arrays): These are microchips that can be reprogrammed based on the requirements of the applications.
• ASIC (application specific integrated circuits): Developing integrated circuits at the level of transistors.
• PCB (printed circuit board): PCB is the board used in electronics. This is very important as the product of electronics is usually packaged in PCB. PCB ensures that ideas are packaged as products.
• Embedded software development: software with emphasis on how to control hardware systems

b.      Pillar 2 – Commercial Hardware Development Training

The goal is to assemble pockets of embedded systems and hardware developers (and hobbyists) in Africa and provide them with modern skills that can help them compete in quality and scale.  The one-man business that programs electronics display boards which depend on hand wiring can be trained on PCB (printed circuit board) design and development. That competence will help drive quality, ramp up volume and reduce cost through automation. This will also mean helping some hardware ICT entrepreneurs to innovate in design and development of the products they currently sell. Brazil followed this strategy when few years ago, they invested in training their citizens not just through university systems. Today, it commands more than 75% of all FDIs into South America in the sector with Apple and Foxconn committing billions of dollars in investment (Mishkin, 2013).

c.       Pillar 3: Local Hardware Business Enablement

The hardware design and development environment in Africa is at infancy though ICT has a lot of vibrancy. The most critical structure is not available. A key structure is where to produce PCB after they have been designed. In this phase, efforts will be made to nurture the industry. One key element is PCB design equipment. We propose for government to setup a PCB production plant, via public private partnership, and offer open and subsidized paid services to companies and schools across Africa. So when companies send their designs, they pay and the company makes the PCB and ships to them. Without a PCB plant, the hardware industry will not develop in the continent. Also, the students will have the platform to move simulations and prototypes to final product concepts which are packaged neatly for demos before investors. Offering services across the whole ecosystem makes this project a sustainable one with lesser cost-factor to the governments.

It is very important to note that Africa has the capacity to develop this industry. What is needed is not any raw material but skilled manpower and the right policy. Taiwan has demonstrated that any nation with a strategic intervention program can grow the electronics industry. Africa is emerging as a region with focused strategy to develop deep technical workforce. This makes it well positioned to lead the region in this area. An electronics industry will bring Intel, HP, Dell and Apple to come to Africa and setup fabrication facilities, design centers and manufacturing bases. The semiconductor industry is the largest in the world and Africa can play a role if a PCB plant that serves to seed that sector is developed.

Expecting the startups to purchase them will slow the penetration of the sector. So, government can help fund the project. Alternatively, government can have a tender for companies to compete and the one that wins will run it and after a period pay back the government the funds. With this, they can make high quality electronics boards. Africa with a PCB plant will become the hub of electronics manufacturing as all the schools and companies in the region will send design files to be manufactured here over U.S. and China. The comparative lower wage in Africa makes it very attractive that markets from U.S. and Europe could be interested.

At this phase, we will expect most students’ projects, undergraduate and postgraduate ones, to transition from prototypes on breadboards for the awards of diplomas to ones that investors will pay attention to commercialize. The impact of PCB plant will be huge as students will have a process to miniaturize their designs. It is very possible that across Africa, engineering students have tried to solve most local problems. But most are yet to be commercialized because without PCB, they cannot improve quality and performance to seek for funds. PCB will help them to improve quality, performance and packaging that will enhance the overall marketability of the ideas.

d.      Pillar 4: Business Proposal and Capital

Build ICT hardware accelerator program to prepare firms towards getting capital. The goal is to enable top performing hardware firms or excellent student projects get venture funds and decouple the need for government to support them. Yet, it does not mean that national governments cannot award competitive grants to 5-10 companies in their respective electronics sectors.  These firms can be startups or expanding firms. The purpose is mainly to provide a process to fund some talented teams to build companies. If the government provides the PCB plant, each of these firms will need $150,000 – $350,000 to develop prototypes and even try first product lots in the market depending on the nature of the product. Usually, investors like to see ideas which are nearly prototyped and that explains why a PCB plant is vital.

Action Plan: Though Africa has many accelerators and hubs, they are largely web and mobile app focused. These existing hubs will be complementary. A private sector driven hardware hub will be required.

The purpose of the Hubs across Africa will be to facilitate the development of the most vital industry of the 21^st century, microelectronics, in Africa and subsequently transform the Hubs into centers of hi-tech entrepreneurship and knowledge creation. Just as U.S., EU and other areas have used specific government programs to stimulate the sector, Nigeria must do same. The capacity to advance ICT cannot be decoupled from the propensity to build an electronics design ecosystem with tools and facilities makers and developers can use.

Both MIC and TCC will educate and train businesses and schools in the exciting field of microelectronics, and its applications to agriculture, energy, manufacturing, telecommunications, information systems and foster opportunities not only for the acquisition of new knowledge, but also the production and application of new knowledge. It will open new vistas of opportunities for small and medium scale enterprise (SMEs) to differentiate their services and create new values in their product offerings. The centers will provide broad-based innovative trainings, which would enhance the quality of their business processes and systems.

e.       Pillar 5: FDI and Attracting MNCs

We estimate 5-9 years for executing the earlier pillars. At the tenth year, some regions in Africa will be ripe to market themselves as a hub of hardware design and development in the region. With deep core of talents, interests can build in the regions.

Unlike ICT, electronics is not usually pursued as a technology policy in Africa. Sure, electronics falls within the engineering policy. Unfortunately, Africa is paying more attention to ICT than engineering – the buzz is so high about ICT that you can be fed with ICT related news daily on the nation’s leading papers.  That imbalance makes it difficult for Africa to develop a sustainable model since ICT cannot advance itself. The engine that drives the ICT economy is electronics and when a nation does not have a plan for electronics it will largely remain a consumer of ICT.  There is a limit to how fast Google Search can perform based on the microprocessors that power Google servers. In other words, microchips must advance before ICT and software can leap forward as the former puts theoretical limits on the performance on the latter. Building a strong electronics program puts a continent on the path of becoming a creator of ICT.

5.      Recommendations and Conclusions

Before specific recommendations for regional and national governments on developing industrial clusters in Africa, the following are some general recommendations:

• All stakeholders must collaborate to improve cluster’s competitiveness. The private sector must advocate for the right policies and government must act. Donors can be given directions on areas where help is needed by entrepreneurs within clusters. By working together through investment, sound policies, our clusters can be made more efficient and competitive.
• Policy should gear towards supporting already existing clusters as cluster development is market-driven and takes years to evolve instead of working to create them from scratch.
• A framework for cooperation among companies, universities, research institutions at local, regional and national levels should be developed with government playing a strong catalytic role. Africa must push synergies in key areas of policy action like competition, innovation, and fiscal growth.
• Though government can use cluster-specific incentives to shape the behavior of cluster participants on investment and innovation, it must try to focus on building core platforms like infrastructures and legal systems. The seasonal grants or handouts to entrepreneur without supportive basic cluster amenities cannot help them compete against Chinese imports into Africa.
• Efforts must be made to develop and offer extended financial instruments such as venture capital funds, private equity funds, credit guarantee schemes, etc to stimulate cluster growth.
• Early stage VC funds will help unlock opportunities not just in ICT but in other technology sectors.
• The private sector should participate more actively in S&T education/training by creating alternative vehicles to close the asymmetry between university programs and immediate needs of the clusters.
• While national cluster plans will be important, regional ones may serve better owing to the disparity in levels of development. Specialized infrastructure like communications, transport and real estate are vital.
• Government could administer its startups financing programs by focusing more on companies within sector-targeted clusters to improve the overall performance of these intervention initiatives.

Regional African Governments

We emphasize the importance, at regional African governments, of:

• Technical Education – The educational system and training programs should gear towards producing workforce in science, technology, engineering, and math as they are vital to S&T clusters
• Technology Transfer from Universities – The governments must continue to push all universities especially the technical ones to establish technology transfer offices to enable the transfer of inventions to businesses and enterprises that can commercialize them. The technology transfer scheme could be incentivize so that universities can commit to building a viable relationship with the industry.
• Legal Education and IP – Africa has a dearth of IP (intellectual property) attorneys with expertise in patents, trademarks and trade secret. The Law Schools must work to remedy this situation.
• Patent & IP Laws – Governments must enforce the IP laws in its books and help transform the nations as places where intellectual properties are respected. A key part of it will be encouraging our entrepreneurs to patent their good ideas.
• Physical Infrastructure – Africa better transportation within and between clusters to ensure efficient movement of goods and services. From airport to roads, availability of these amenities will play major roles in the decision to locate companies. Also, firms and workers look for places with good amenities including housing, hospitals, roads and access to communication facilities.
• Talent Pipeline – The development of technical talent in nations especially in emerging areas of technology must be worked upon. A strong secondary education in the STEM (Science, Technology, Engineering and Mathematics) area must be worked out.
• Foreign Entrepreneurs – Government could look to lure foreigners into the countries which can possibly incubate the local counterparts through special funding and visa programs similar to the strategy adopted in Chile. In Chile, the government provided seed capital to some entrepreneurs and has succeeded in attracting talents from U.S. and Europe.
• Technology Adoption – When government redesigns its processes and adopts modern technology, there will be opportunities for some of these clusters to expand and grow. In most African cities, government dominates the GDP. So, any sector that government moves into will grow as companies will emerge to serve and take opportunities therein. From eGovernment to eTax to new farming techniques, changes in the ways government operates could stimulate cluster growth.
• Cluster Redevelopment – Each of the regional regions must work to revamp at least one cluster and transform it into a globally competitive industrial one within a decade. This means that governments at all levels must partner to unleash the full innovation potential of these clusters. This will begin by having each cluster strengths, weaknesses and opportunities assessments.

The following are guidelines to deepen cluster development in any African government at federal government level:

• Increase investment in the foundations of science, technology and engineering. Also create strong standards and accountability
• Provide more support for targeted and specialized training programs in S&T
• Develop framework to improve effectiveness in federal research and alignment to industry
• Increase research funding in universities and government labs and demand for measureable outcomes
• Strengthen the legal system especially IP rights and anti-trust laws
• Restructure research funding process via peer-reviewed competitive grant process as obtainable in U.S. National Science Foundation and National Institute of Health
• Act as an innovation-backer by providing federal matching funds to local governments that invest in S&T, and innovation
• Invest in recruiting anchor firms into regions and promote cluster awareness
• Build/upgrade vital physical and business infrastructure
• Focus to grow and support old and new innovative cluster companies

Private Sector

Besides what governments can do to improve the efficiencies of clusters in Africa, the private sector can also help. For the private, we show how they can simultaneously support the cluster while benefiting from it. For Africa to become a competitive and dynamic knowledge-based economy with sustainable growth and better social cohesion, it is the private sector that will practically execute any plan including the ones made by the government.

The following are some recommendations:

• Financial Instruments – The private sector should examine how they can offer financial support in start-up projects, networking, research, education and infrastructure without jeopardizing their fiduciary responsibilities. Africa is in dire need of early stage venture capital funds that will help nurture new ideas coming from entrepreneurs and students.
• Integrated Manufacturing Facility (a JVC) – Despite the pockets of activities across universities and the hobbyist community, Africa does not have a PCB (printed circuit board) sector to support the local industry. The transition from simulation to actually having a prototype and then production will get more impetus if a PCB plant exists. The present model of designing boards, fabricating and importing from China will never allow cost to provide a competitive advantage to the local industry. A Joint Venture (JV) similar to MOSIS (USA), EMC Canada and Europractice (Europe) but for PCB will help Nigeria have a future in the hi-tech arena.
• Anchor Companies – The private sector especially the financial and investment sector could look for anchor firms in each region and work to transform them into global players trough investment and improved management with their participations. Despite all policies, the impact of anchor firms cannot be overemphasized. They can help to seed startups and SMEs that come to service them. In the technology arena, Africa has sparks of potential anchor firms that own their technologies through research and innovations. HP anchored Silicon Valley, Nortel anchored Ottawa, and IBM did same for Raleigh-Durham; Africa needs such anchors that will serve as magnets to attract other players. Over time, they will create spin-offs which will help grow the cluster.
• Build Cluster Integration Platform – There is certainly an opportunity to build a platform that will make Africa more collaborative. This is not just in technology but also in finance, law and other areas. A business could help build a system that will bring universities, government labs and firms to share and collaborate more. Universities could be asked to use cloud-based services to share all research outputs including projects done by students. The government labs could use same to share their outputs while the firms can communicate skill needs and funding resources for specific research areas.
• Investment in Education – We think the quality of technical education in Africa will need more concerted efforts from the private sector. Government alone cannot solve the problem. This investment must provide great learning environments including technology parks, lab facilities and international internships that will help Africa produce global technology leaders.

Acknowledgement: The Tony Elumelu Foundation (an African-based, African-funded philanthropic organization founded in 2010 by Lagos businessman Tony Elumelu with mission to support entrepreneurship in Africa by enhancing the competitiveness of the African private sector) provided generous grant to the African Institution of Technology to study innovation clusters in Nigeria. The results of the study have assisted in developing this paper.

References

AUC – Africa Union Commission, (2009) “Towards a Single African Currency”, Proceedings of the First Congress of African Economists, 2-4 March 2009 Nairobi, Kenya {Online}

Ekekwe, N. (2010), “Nanotechnology and Microelectronics: Global Diffusion, Economics and Policy”, IGI Global Publishers, PA, USA. ISBN: 978-1-61692-006-7

Ekekwe, N., 2012, “Africa is Open for Business”, Harvard Business Review, {online} http://blogs.hbr.org/2012/02/africa-is-open-for-business/

Elumelu, T.O. (2013), “AFRICAPITALISM – THE PATH TO ECONOMIC PROSPERITY AND SOCIAL WEALTH”, {online}

Enright, M. (1998) “The Globalisation of Competition and the Localization of Competitive Advantage: Policies towards Regional Clustering”, Paper presented at the Workshop on Globalisation of Multinational Enterprise Activity and Economic Development, University of Strathclyde, Glasgow, Scotland, 15?16 May 1998.

IMF (2013), Regional economic outlook. Sub-Saharan Africa — Washington, D.C.: International Monetary Fund, 2003– {Online} https://www.imf.org/external/pubs/ft/reo/2014/afr/eng/sreo0414.pdf

Islam, N. and Ekekwe, N. (2012), “Disruptive Technologies, Innovation and Global Redesign”, in Disruptive Technologies, Innovation and Global Redesign: Emerging Implications, Ekekwe, N. and Islam, N. (Eds.), IGI Global: PA, USA. ISBN: 978-1-46660-134-5; EISBN: 978-1-46660-135-2

Mishkin, S.(2013) “Foxconn Challenged as Global Reach Grows” {Online} http://www.cnbc.com/id/100353348#.

Ngclustermap (2014), Nigeria Innovation Cluster Mapping project {online} http://ngclustermap.com/

Oshikoya, T.W. and Hussain, N.M.  (1998) ‘Information technology and the challenge of economic  development in Africa’, African Development Bank, Economic Research Papers, No. 36

Porter, M.E. (2003), “The Economic Performance of Regions,” Regional Studies, 37, pp. 549-578

Saskal, R. (2014), “California’s Next Big Ballot Item: $3B Bond for Stem Cell Research” {Online} http://connection.ebscohost.com/c/articles/13127228/californias-next-big-ballot-item-3b-bond-stem-cell-research

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Note 1: This is an update of an article that I wrote on a whim in December 2006, while I was on a break from business school at NYU Stern. It was published without update at Tekedia in July, 2011. The announcement by IBM about its new 7nm chip prompted me to dig it up from my archives and update it to reflect more recent developments.

Note 2: KEC Ventures does not specifically invest in nanotech startups, although in the past we have examined startups developing quantum crystals and other nanomaterials.

Introduction

I became exposed to nanotechnology during my days as an undergraduate student at Connecticut College, in New London, Connecticut. I pursued a double major in Physics and Mathematics, and had the good fortune of working as a research laboratory assistant in the Tunable Semiconductor Diode-Laser Spectroscopy lab, which was run by Professor Arlan W. Mantz, Oakes Ames Professor of Physics, and erstwhile chair of the Physics Department. My involvement with the lab spanned three years, and that experience played a critical role in my education.¹

What Is It?

The term nanotechnology refers to a group of scientific processes that enable products to be manufactured by the manipulation of matter at the molecular level – at the nanoscale. One nanometer represents a length of 10^-9 meters – one billionth of a meter.² Nanotechnology enables the manipulation of matter at or below dimensions of 100 nanometers. Nanotechnology draws from a multitude of scientific disciplines – physics, chemistry, materials science, computer science, biology, electrical engineering, environmental science, radiology and other areas of applied science and technology.

There are two major approaches to manufacturing at the nanoscale;

• In the “bottom-up” approach, nanoscale materials and devices assemble themselves from molecular components through molecular recognition – small devices are assembled from small components.
• In the “top-down” approach materials and devices are developed without the manipulation of individual molecules – small devices are assembled from larger components.

Where is Activity Concentrated?

Research into nanotechnology and its applications is growing rapidly around the world, and many emerging market economies are sparing no effort in developing their own research capacity in nanotechnology.

• Naturally, the U.S., Japan, Western Europe, Australia and Canada hold an advantage, in the short term.
• China and India have made significant progress in establishing a foundation on which to build further capability in nanotechnology – A 2004 listing puts them among the top 10 nations worldwide for peer-reviewed articles in nanotechnology.³
• South Africa, Chile, Mexico, Argentina, The Philippines, Thailand, Taiwan, The Czech Republic, Costa Rica, Romania, Russia and Saudi Arabia have each committed relatively significant resources to developing self-sufficient local nanotechnology industries.

Why Should Investors Care?

Fundamentally, investors should pay attention to nanotechnology because of its high potential to spawn numerous “disruptive technologies.” Nanoscale materials and devices promise to be;

• Cheaper to produce,
• Higher performing,
• Longer lasting, and
• More convenient to use in a broad array of applications.

This means that processes that fail to provide results comparable to those available through nanotechnology will become obsolete rather quickly, once an alternative nanoscale process has been perfected. In addition, companies that fail to embrace and apply nanotechnology could face rapid decline if their competitors adopt the technology successfully.

The United States Government has maintained its commitment to fostering U.S. leadership and dominance in the emerging fields of nanoscale science. In its 2006 budget, the National Nanotechnology Initiative, a multi-agency U.S. Government program, requested $1.05 Billion for nanotechnology R&D across the Federal Government.⁴ That amount reflects an increase from the $464 Million spent on nanotechnology by the Federal Government in 2001.

Applications of Nanotechnology

Nanotechnology’s promise to revolutionize the world we live in spans almost every aspect of human endeavor. Today, nanotechnology is applied in as many as 800 commercial products.⁵

• IBM’s new chip “could result in the ability to place more than 20 billion tiny switches – transistors – on the fingernail-sized chips that power everything from smartphones to spacecraft. To achieve the higher performance, lower power and scaling benefits promised by 7nm technology, researchers had to bypass conventional semiconductor manufacturing approaches. Among the novel processes and techniques pioneered by the IBM Research alliance were a number of industry-first innovations, most notably Silicon Germanium (SiGe) channel transistors and Extreme Ultraviolet (EUV) lithography integration at multiple levels.”⁶
• Carbon nanotubes and other nanomaterial additives can be used to fabricate stronger, lighter materials for use in automobile bodies, helmets, sports equipment and other products in which stiffness and durability are important features.
• Researchers at Stanford University have killed cancer cells using heated nanotubes, while EndoBionics, a US firm, developed the MicroSyringe for injecting drugs into the heart. MagForce Technologies, a Berlin based company developed iron-oxide particles that it coats with a compound that is a nutrient for tumor cells. Once the tumor cells ingest these particles, an external magnetic field causes the iron-oxide particles to vibrate rapidly. The vibrations kill the tumor cells, which the body then eliminates naturally. Other applications in medicine and biotechnology exist.
• Cosmetics companies are actively engaged in the exploration of nanotechnology as a source of enhanced products. For example, to produce cosmetics that can be absorbed more easily through human skin and that exhibit longer lasting properties.
• Thebreakthrough by IBM will only acceleratethe development ofnanoscale technologies for computing platforms. According to the National Nanotechnology Initiative:”Nanotechnology is already in use in many computing, communications, and other electronics applications toprovide faster, smaller, and more portable systems that can manage and store larger and larger amounts of information. These continuously evolving applications include:
  • Nanoscale transistors that are faster, more powerful, and increasingly energy-efficient; soon your computer’s entire memory may be stored on a single tiny chip.
  • Magnetic random access memory (MRAM) enabled by nanometer?scale magnetic tunnel junctions that can quickly and effectively save even encrypted data during a system shutdown or crash, enable resume?play features, and gather vehicle accident data.
  • Displays for many new TVs, laptop computers, cell phones, digital cameras, and other devices incorporate nanostructured polymer films known as organic light-emitting diodes, or OLEDs. OLED screens offer brighter images in a flat format, as well as wider viewing angles, lighter weight, better picture density, lower power consumption, and longer lifetimes.
  • Other computing and electronic products include Flash memory chips for iPod nanos; ultraresponsive hearing aids; antimicrobial/antibacterial coatings on mouse/keyboard/cell phone casings; conductive inks for printed electronics for RFID/smart cards/smart packaging; more life-like video games; and flexible displays for e-book readers.”
• Nanotechnology is applied in the garment industry to produce stain resistant fabrics, for example.
• Nanotechnology companies in the developing world are pursuing solutions to problems peculiar to the developing world – for example, an Indian company is working on a prototype kit for diagnosing tuberculosis. There is great potential for the application of nanotechnology to agriculture.

A more complete listing of the benefits and applications of nanotechnology is available here: US National Nanotechnology Initiative

Threats

In spite of its promise, nanotechnology faces threats that could investors ought to be aware of. Among these;

• It is not yet clear how nanotechnology will affect the health of workers in industries in which it is applied. For example, how should we assess exposure to nanomaterials? How should we measure the toxicity of nanomaterials?
• Public agencies and private organizations do not have a clear sense of how further progress in nanotechnology will affect the environment, or of the public safety issues that will accompany an expanded use of nanotechnology in industrial, medical and consumer applications. For example, what factors should risk-focused research be based on, and how should we go about creating prediction models to gauge the potential impact of nanomaterials?
• The complexity of the science that is integral to nanotechnology makes it a very difficult area to regulate. It is likely that firms involved in the pursuit of nanoscale applications in medicine and pharmaceutics will face long delays in obtaining regulatory approval for the wide scale use of their products.
• The complexity of nanotech-related patents could lead to delays in obtaining intellectual property protection for nanotech-enabled products.
• It is not yet clear how society can protect itself from the abuse of nanotechnology. The public sector needs to collaborate with the private sector in developing protective mechanisms to guard against “accidents and abuses” of the capabilities of nanoscale processes and materials.

A Note To Would-Be Investors

The average investor must remain keenly aware that firms involved in nanotechnology will have to assign significant resources to research and development. There is no reliable means of predicting the ultimate outcome of such activities, and the probability that any firm can maintain an enduring edge over its competitors is small. Investors should expect the mantle of leadership in innovation to change with a relatively high frequency. As such, pure-play nanotechnology firms will need to pay critical attention to means of sustaining market dominance that go beyond core competence in the science of nanotechnology.

Lux Research estimates that revenues from products using nanotechnology will increase from $13 Billion in 2004 to $2.6 Trillion in 2014. The 2014 estimate represents approximately 15% of global manufacturing output.⁷

In 2005, Lux Research and PowerShares Capital Management launched a nanotech ETF – The PowerShares Lux Nanotech Portfolio (PXN). In addition, Lux Research measures the performance of publicly traded companies in the area of nanotechnology through the Lux Nanotech Index^TM, a modified equal dollar weighted index of 26 companies. The companies in this index earn profits by utilizing nanotechnology at various stages of a nanotechnology value chain;⁸

• Nanotools – Hardware and Software used to manipulate matter at the nanoscale.
• Nanomaterials – Nanoscale structures in an unprocessed state.
• Nanointermediates – Intermediate products that exhibit the features of matter at the nanoscale.
• Nano-enabled Products – Finished goods that incorporate nanotechnology.

Companies in the index are further classified as

• Nanotech Specialists, or
• End-Use Incumbents.

Investors must note that the investment characteristics of Nanotech Specialists are likely to differ markedly from those of End-Use Incumbents. The end-use incumbents that are part of this index include 3M, GE, Toyota, IBM, Intel Hewlett-Packard, BASF, Du Pont, and Air Products & Chemicals. Because these companies have large, well-established and significant operations in arenas that do not rely heavily on nanotechnology, investors can expect them to achieve financial results that are only moderately volatile. In contrast the financial performance of nanotech specialists will exhibit highly volatile swings, because;

• With the exception of companies in the “picks and shovels” segment of nanotechnology, much of the work that many nanotech specialists engage in is still in the “trial and error” phase, and
• There is no reliable means of predicting the results that heavy investment in R&D will yield.

Finally, it is likely that financial valuations of nanotech firms will fail to capture the true value of the intangible assets that provide the bedrock of each company’s ability to sustain innovation, create economic value, and protect its competitive advantage. If nanotechnology is truly the way of the future, then investors must embrace that future with enthusiasm that is layered with caution by;

• Performing an extra amount of due diligence before committing significant funds to investments in individual nanotechnology companies,
• Limiting such investments to companies in the U.S., Japan, Canada, Western Europe, and Australia, in the near term, and
• Following developments in the nanotechnology initiatives of the BRIC block of emerging market economies without committing any funds until a clear assessment of the future prospects of individual investment opportunities becomes possible.

Individual investors must exercise an extra amount of caution in pursuing nanotech investments, and should not commit more than they can afford to lose. Most individual investors with a desire to invest in nanotechnology should do so through PXN and similar instruments. Institutional investors must bring all their resources to bear in assessing the viability of a nanotech investment strategy prior to committing funds to this nascent area. For added security, individual investors that seek to invest in publicly traded nanotech companies should seek firms with the following characteristics;

• No debt, and positive cash flows, and evidence of an ability to sustain profits.
• Companies that supply corporate customers must not be too reliant on one customer.

Founders and insiders should have a significant and increasing portion of their net worth at stake in the company, and a track record in multi-disciplinary research.

In a Feb 2014 State of The Market Report update, Lux Research says “Our expanded forecast for nano-enabled products reveals the global value of nano-enabled products, nano-intermediates, and nanomaterials reaching $4.4 trillion by 2018.”

Closing Thoughts

Many risks accompany investments in nanotechnology. However, if nanotech is to be believed, it may yield significant long-term returns to those investors that learn to harness its power while keeping the following caveats in mind;

• Many nanotech companies face an up-hill task in converting promising research into products that can sustain a steady revenue stream.
• A considerable number of nanotech companies may be surrounded by “more hype than substance”.
• There is no guarantee that the price investors pay for an investment in nanotech will be adequate, once all associated risks are taken into account.

1. Let me know if you feel I have failed to attribute something appropriately. Tell me how to fix the error, and I will do so. I regret any mistakes in quoting from my sources. ?
2. For perspective, 100nm represents about 1000^-1 of the width of a human hair. ?
3. Hassan, Mohamed H. A., Small Things and Big Changes in The Developing World. Science,Vol. 309 no. 5751, Jul 1 2005, accessed on Dec 19, 2006 at http://www.sciencemag.org/cgi/content/full/309/5731/65 ?
4. The National Nanotechnology Initiative, Research and Development Leading To A Revolution in Technology and Industry, Supplement to The Presidents FY 2006 Budget ?
5. National Nanotechnology Initiative, accessed online on Jul 12, 2015. ?
6. See the announcement from IBM. Accessed online on Jul 12, 2015. ?
7. Gosh, Palash R, How To Invest In Nanotech, www.businessweek.com, Apr 17, 2006. Accessed on Dec 22, 2006. ?
8. Adapted from www.luxresearchinc.com ?

Denali
Image Credit: NPS Photo/Tim Rains

On June 30th, 2015, Naira Musallam and her climbing partner, Tim Lawton successfully summited Denali (Mount McKinley). They made history as The First Arab-American Team to ever do so. Naira also became the first Arab woman to stand on the summit of Denali.

Standing at 20,320 feet, Denali is one of the “Seven Summits” because it is the highest point on the continent of North America. From that point Naira and Tim raised a flag with the message “Peace and Security for All” written in Arabic, Hebrew, and English.

I checked my email around 8:00 AM EST in NYC after arriving at work on Tuesday, July 7th 2015, and found a note from Naira telling me the good news. She had sent it at 6:51 AM. I wrote back to congratulate her, and asked if I could write about their story. She and Tim graciously said yes.

This is their story. It highlights everything I discussed in Innovation Footprints: 6 Things I Have Learned About Building High-Performing Teams.

I met Naira on Thursday, October 9th 2014 when I was at NYU’s Leslie eLab to lead a lunch and learn. I had arrived early, to give myself some time to work through my nerves – I get super nervous about speaking in front of groups of people.

Naira was the first person to arrive. She came, said hello, and introduced herself. I introduced myself, and asked if she was an undergraduate student, what year she was in, what major she was studying . . . She smiled at me and explained she’s a professor at NYU, and she teaches statistics. Oh, lest I forget. She also mentioned that she “climbs mountains as a hobby” and “runs long distance, as a hobby.”

I thought to myself; “Great! It really would have been helpful if someone had warned me that I’d have professors in the audience! Never mind mathematicians who climb mountains and run long distance races . . . as a hobby.”

So much for calming my nerves. It seemed to me that her arrival was timed to optimize the intimidation factor. Any way, the talk went well – or, so she says. To my great “horror” there are excerpts on video which you can check out here, here, here and here. After the event, I chatted briefly with Naira again and we agreed to meet for coffee. She wanted to pick my brains about something she was working on. Since I have never met a mathematician or physicist I do not like, I said yes. What could be better than chatting with a mathematician?

We met again on November 26th, 2014 at Cafe Reggio near NYU. After spending some time getting to know one another from a biographical standpoint, we spent most of the time discussing many of the types of questions I have come to expect from the first-time founders I meet; What does a VC want to see in order to decide to make an investment? How does the decision-making process typically work? How about fund-raising, how does that work, in general? How does one get a meeting with a VC to whom one does not have a direct or indirect connection? Does sending a cold-email work? And many more.

During subsequent meetings over coffee, and sometimes lunch . . . I learned about a startup she and Tim have been building, Frontier7 is an online data analytics platform. I also learned a lot about Tim, whom I had not yet met.

Eventually, I met Tim . . . I pointed out to Tim that Naira intimidated me when I first met her, and now she’d brought him along to escalate that intimidation factor even more. I remember we were all laughing so hard, the other folks in the bar must have thought we’d been drinking too much.

Naira Musallam and Tim Lawton: Starting The Climb on Denali (Image Credit: Naira and Tim)

About Naira Musallam

Naira is currently a full-time professor at New York University, where she teaches Applied Statistics, Analytical Skills, and National Security and Middle East Affairs at the Center for Global Affairs. She also serves as an Adjunct Professor at Columbia University and in its collaborative program at the United States Military Academy at West Point where she teaches graduate level research courses. Naira received her doctorate from Columbia University.

She has over thirteen years of applied research experience consulting with multiple industries in the private sector, ranging from financial services, to pharmaceuticals, retail, oil and gas, and the fashion industry, helping them solve business problems through data driven processes. She used applied statistics to develop insights on business issues such as M&A deals, C-Suite executive assessments, employee retention, and sales strategies. She also consulted to governmental agencies and non-profit organizations on projects related to project assessment, and monitoring and evaluation. Naira is the recipient of multiple research awards from the Earth Institute, Columbia University, and the U.S. Department of State.

Naira grew up in a small Palestinian town in Galilee, and has been climbing for the last seven years. When not working in New York City on statistical issues, she enjoys high altitude mountain climbing, scuba diving, and cultural exploration and adventures around the world.

About Tim Lawton

Tim is a graduate of the United States Military Academy at West Point and served 5 1/2 years as an officer in various infantry and special operations units. During his time in the Army he was deployed to both Iraq and Afghanistan for a total of four combat tours. After leaving the military he attended MIT Sloan School of Management where he received an MBA with a concentration in corporate finance. He spent the next 5 years in investment banking with experience in debt restructuring, equity financing, and mergers & acquisitions in one role and helped to lead a sales effort in another.

As an active member of the veteran community in NYC, Tim is involved with various veteran non-profit organizations and is working to further veteran’s business initiatives in the city. He is originally from the Boston area. His hobbies include mountain climbing, travel, sky diving, scuba diving, and working out.

How They Met

“We first met at a 5k road race that was to support a veteran’s organization that we were both connected to. We had struck up a conversation because we were both wearing the same brand of sunglasses, which are unique mainly to mountain climbers. From then on we continued our friendship and over time began to discuss not only future mountain climbing endeavors, but also a potential business idea that leveraged both of our experiences from the corporate world.”

Naira Musallam and Tim Lawton: Camp on Denali (Image Credit: Naira and Tim)

Why They Thought They’d Make A Good Team

We both suck at different things.

“In all seriousness, since we initially began our friendship due to mountain climbing and had subsequently climbed together in Ecuador before starting in business together we both had to learn how to trust each other on a different level than is typically required in business and cursory friendships. On that trip we realized that we could trust and rely on each other when things don’t go smoothly.

In one particular recent event while we were climbing together in Alaska, Tim was leading up a steep slope when the ice gave out and he began to tumble down the mountain. As they were connected via a climbing rope, Naira quickly reacted and began to self-arrest. By the time Tim had also recovered enough to self-arrest and stop his fall they had both fallen about 100 feet and 80 feet respectively.  It is this type of event that engrains a level of trust in another’s competence that can be carried over to any other type of situation.

On the actual business front, we both realized that we possessed very different, yet complementary skill sets. Once we began to develop the business plan and put together a strategy, coupled with the trust we had gained with each other from the mountains, we knew we could both move ahead with different responsibilities, yet towards achieving the very same goal.”

Three Things That Have Been Important To Their Success as a Team

1. Trust,
2. Complementary skill sets, and
3. Sharing and believing in the same vision

What successfully Summiting Denali Means for Each One of Them

Tim: “For me it was the culmination of an idea and vision that began years before. In the mountains, it should be about the journey, but getting to the summit is always a sweet addition. This particular mountain and successful summit was by far the most complex and difficult in all aspects as it required more planning and preparation than other mountains I had climbed. Plus, we had spent so long this year attempting to get there. It took two trips, two cross-continental round trip flights, sleeping in airports, hotels, and tents, but we did it. We spent 35 days on the mountain during those two trips. So to have been denied the summit once before, but continuing to try and having the mindset of not quitting until we succeed, and then to succeed, is a great feeling. To have achieved that with Naira, with a mindset that we also share in business makes it satisfying as we look to apply the same tenacity to our new business venture.”

Naira: “While being able to say that I became the First Arab woman to climb Denali has its significance in the mountaineering world, the climbing of Denali with Tim took much deeper meaning for several reasons: Tim and I were the first American- Arab team to step on the highest point in North America. The ability to share a message of hope from there together, especially in today’s turbulent world was extremely unique. In addition, it was elating to reach the top with Tim because we have failed in the past to reach the top. Success becomes way more enjoyable when you achieve it with the same person you failed with before. Finally, reaching the top and being able to make history would absolutely not have been possible without Tim’s partnership and competence on the mountain. In that regards, I feel truly blessed to have Tim as partner.”

Naira Musallam and Tim Lawton: View From The Top of Denali (Image Credit: Naira and Tim)

Their Shared-Vision for Frontier7, The Significance of The Name

“The name Frontier7, which certainly didn’t come to us quickly, has a number of meanings for us. First of all, we are both in love with the outdoors and adventure, so ‘frontier’ in the sense of the furthest known boundary, the last frontier, the beginning of the unexplored, etc. appealed to us. In business we wanted to create an analytics platform that helped push our clients to the frontier of their industries. The “7” has many meanings that we both value: in most cultures 7 is a lucky number, 7 wonders of the world, 7 summits, 7 colors in the rainbow, in Eastern thought the 7th Chakra is the center for trust, devotion, inspiration, happiness, and positivity. (There are also 7 dwarfs in Snow White and who doesn’t love Snow White?)”

Our vision for Frontier7 is to be the go-to online platform for seamless analytics. We want to enable companies to be able to unlock all of the value of the data they gather in order to maximize their own business performance.

The Announcement They Sent To Their Friends, and Other Associates

On June 30th, 2015, Naira Musallam and Tim Lawton made history together on the highest point of North America, Denali (also known as Mount McKinley) by summiting as the First Arab-American Team to ever do so, and with Naira becoming the first Arab woman to ever stand on the summit. Denali is one of the “Seven Summits” or highest point on the continent of North America, standing at 20,320 feet. From the highest point in North America they raised a flag with the message “Peace and Security for All” written in Arabic, Hebrew, and English.

Their goal to summit Denali began on May 4th, 2015 when they attempted to climb the mountain with a guided group but were unable to due to severe weather conditions, spending a total of 18 days on the mountain. While it would be normal for them to come back another season to attempt the mountain again, they decided to return only a few weeks later in June. The second and successful attempt was a self-guided climb with just the team of the two of them. They raised their flag on the summit after 13 days and took a full 17 days on the mountain. The two months, two cross-continental round trips, red eye flights, sleeping in airports, tents, and hotels, and 35 total days on the mountain was well worth the effort on the evening of June 30th, 2015.

What makes their story even more unique is that they come from significantly different backgrounds. Naira grew up as a Palestinian in Israel where she spent a significant amount of time working in the conflict field, while Tim grew up in Massachusetts, served in the United States Army and served numerous combat tours overseas. They connected because of their love for mountaineering, and drive to send a message about hope, interdependence, and common human values.

Furthermore, today they are also co-founders of a data analytics company, Frontier7 (www.frontier7.com), and are also in the process of starting a non-profit in the form of a social platform that engineers chance for people by connecting those from varied backgrounds and shared passions (like themselves) and aligning people, ideas, and resources for them to address social issues that they care about. They believe that in today’s reality, this message becomes more important than ever.

My Closing  Thoughts

We’ve had numerous discussions about Frontier7, but I have not yet seen a demo. They assure me that day is coming soon. Either way, I am eager to watch their journey, as co-founders and as people who have a vision that they wish to turn into a reality. They each embody the intangible characteristics I look for in founders; courage, grit, vision, determination, resilience, creativity, resourcefulness, conflict management and resolution, discipline, a willingness to assume responsibility, and the ability to learn from others. I could not feel more proud of their accomplishment.

Naira Musallam and Tim Lawton: At The Top of Denali (Image Credit: Naira and Tim)