Next Wave: Known for financial services, Mauritius wants the tech brand

Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner First published 20 August 2023 Having a concentration of mature technology players but very little startup activity is precisely why Mauritius makes my list of interesting technology ecosystems to review. It is easy to dismiss Mauritius’s technology arena as simply a corporate IT and business process outsourcing world instead of a startup ecosystem. But that perception has too many blindspots. The island nation may house more business process outsourcing firms than what qualifies as a startup. But it is certainly not a laggard. It has just being too concerned with regular business administration, its bread and butter, versus pursuing innovation on its shores. And it knows this. Hosting some of Africa’s largest IT infrastructure players is a flex, but Mauritius wants more. And it wants this “more” to extend and enable its robust financial services sector. Mauritius is one of Africa’s richest countries. But it did not start out that way. In a paper published seven years before Mauritius secured independence from colonial Britain, James Meade, the Nobel Prize-winning British Economist described Mauritius as an “outstanding example of a mono-crop economy”. Like Meade, Trinidadian-British writer Vidiadhar Naipaul saw no prospects for a country where only “sugar cane and sugar cane ending in the sea” was the only source of economic activity. In order: (1) Painting by Raouf Oderuth showing indentured Indian labourers arrive Mauritius (Licence CC BY-SA 4.0) (2) Painting by Raouf Oderuth (Source: Wikipedia). (3) Port Louis at night (Source Wikipedia – CC BY 2.0) GIF by Abraham Augustine In 1968, when it gained independence, Mauritius boasted a stunning per capita income of only $350. The majority of the population were indentured workers who had come from India to work in the plantations after the abolishment of slavery in the 1830s led to a labour shortage. Creoles—mostly descendants of former slaves, Franco-Mauritians (the small class of French-descended land-owners) and a tiny Chinese minority made up the rest of the population. For Naipaul, writing his 1972 essay, The Overcrowded Barracoon, Mauritius was a volatile hodgepodge not destined for greatness or even middling. Today, the per capita income in Mauritius is just over $10,000 (or about $23,000 in purchasing power parity terms). One of the highest in Africa. From sugar to “pan-African tech” center The startup funding amount bellies what is possible. | Infographic: Ayomide Agbaje — TechCabal Insights. From an economy built on sugar and textiles exports and tourism, Mauritius is now synonymous with financial services. But it also has a strong manufacturing sector (courtesy of aforementioned suger and textile industry) and is a significant business outsourcing hub in addition to hosting a luxury real estate market. With 87% of the country covered by high-speed internet and a smartphone penetration that rivals that of any other African country at ~80%, the country is clearly not a greenfield. But there is a difference between using technology and creating it—or at least hosting the people that create it. To this end, there is no shortage of government-run or designed “digital economy” or “digital innovation” programs. There is a central bank digital currency in the works. A fintech promotion agency and a regulatory sandbox targeting blockchain applications. A revamped research council known as the Mauritius Research and Innovation Council (MRIC) is also in a race to fulfil its mandate to search for and fund innovative ideas in robotics, blockchain, AI, and cloud computing. And no, that mandate predated this year’s AI frenzy. This tech ambition is not exactly new. It started in earnest 22 years ago. In 2001 construction started on Ebène Cybercity, a 64-hectare technology park to serve as the centre of the country’s then fast-growing IT sector. IT in the early 2000s was telecoms, subsea cables, data centres and such like. It is also home to AFRINIC, the regional internet registry for Africa and the Indian Ocean region. But in 2001, when the idea of tech hubs or even smart cities as the larger versions are known today, was not in the lexicon of most African governments. But Ebène Cybercity was not designed to make Mauritius attractive to a technology ecosystem from across Africa. In 2001 most African countries were just at the beginning of the mobile telephony boom curve. Instead of a tech park, Ebène slowly became the house of many of the financial services firms in Port Louis that struggled with traffic congestion in the capital city. Especially as the financial services sector began to take off and dominate the business profile of the island. Partner Message Did you know that you can embed financial services with SeerBit Alpha? No??? Well now you do! Say goodbye to developmental stress and hassles, and launch your fintech products faster when you build with SeerBit Alpha. Click here to learn how you can add fintech to your product As a technology ecosystem profile begins to mature in Africa, Mauritius’ leadership and policymakers are seeing an opportunity to redefine the island by making technology one of the country’s economic descriptors. A few stumbling blocks to clear Over the years, successive governments in Mauritius have pursued an economic diversification program so that no one economic sector is too much of an Achilles heel. But some of that reform agenda has lost its steam. In addition, the crowded marketplace of business process outsourcing firms is gaining a reputation for bait and switch tactics that is weighing heavily on investor and entrepreneur interest. Especially younger and typically naive investors and entrepreneurs unfamiliar with navigating high finance. This market for fees contrasts sharply with the type of environment that can foster startup activity. The result is that while the financial services sector is still going strong, it is also losing what competitive appeal—even if only slightly—it might have had years back, to places like Dubai. So much so that even Mauricien corporate services firms are increasingly setting up outside to serve clients through other financial hubs. Partner Content: Read how Kippa’s founder and president,