In the early 2010s, the Lagos suburb of Yaba was hardly on the radar of global tech enthusiasts. But within a decade, Yaba had transformed into the “Silicon Valley of Africa,” a dynamic tech hub teeming with innovation and entrepreneurial energy. This remarkable evolution wasn’t a product of meticulous planning or massive investment but rather a series of small, strategic interventions and an organic growth driven by community spirit. This is the story of Yaba, and it exemplifies the essence of “Flywheel Economics.”

The birth of the Yaba tech cluster can be traced back to the founding of Co-creation Hub (CcHub) in 2010. Visionaries Bosun Tijani, Femi Longe, and Tunji Elesho didn’t set out to build a tech empire; they wanted a space for social innovation. The hub’s early hackathons, organised with the Enterprise Development Centre, were modest events, yet they played a critical role. These gatherings brought together a disparate group of tech enthusiasts and entrepreneurs, providing them a platform to connect, collaborate, and innovate. These initial efforts set the flywheel in motion.

Yaba’s ascension was far from preordained. Initially, CcHub had its sights set on Marina, not Yaba. When Marina fell through, Yaba was chosen out of necessity. However, this choice proved to be serendipitous. Yaba’s proximity to Lagos Island and the presence of several tertiary institutions created an ideal environment for a tech community. The area’s rich history as a colonial residential hub for local staff and a centre of activism added a unique character that resonated with the burgeoning tech scene.

A pivotal moment in Yaba’s growth was the introduction of high-speed internet, installed by MainOne. But this was no easy feat. The Lagos State Government’s $2 million right-of-way levy threatened to derail the project. The leaders of CcHub, demonstrating remarkable tenacity and strategic thinking, engaged with the Lagos State Innovation Council and tech entrepreneur Tomi Davies. Their efforts paid off when the government waived the levy, allowing MainOne to lay the fibre optic cables that would power Yaba’s tech ambitions. This intervention was crucial, accelerating the flywheel’s spin and connecting Yaba to the global digital economy.

The story of Yaba is a testament to the power of community-driven development. The early hackathons and meetups fostered a culture of collaboration and mutual support, which attracted investors and partners. The Lagos Angel Network and other venture capitalists started providing some financial backing needed to sustain the momentum. CcHub’s focus on social innovation, rather than purely profit-driven motives, attracted a diverse range of supporters, from the Indigo Trust and Omidyar Network to Google and The Schmidt Family Foundation.

However, success brought its own set of challenges. Rising rents, limited office space, and inadequate infrastructure threatened to stifle growth. The departure of Andela, Nigeria’s first unicorn, in 2017 was seen by some as a setback. But in reality, this was a natural progression. As startups matured and expanded, they moved beyond Yaba, dispersing the economic benefits throughout Lagos.

A notable yet underutilised asset in Yaba’s ecosystem was its educational institutions. Despite their proximity, many universities failed to fully engage with the tech cluster. The Enterprise Development Centre’s early partnership with CcHub was an exception and demonstrated the potential benefits of such collaborations. A more integrated approach from academia could have amplified Yaba’s success.

Yaba’s journey illustrates that economic ecosystems don’t need to be perfect to be transformative. The Yaba tech cluster was far from flawless. It faced numerous challenges, from limited funding to infrastructure deficits. Yet, the ecosystem was “good enough” to enable substantial growth and innovation. This concept of “good enough” is critical in understanding how seemingly small interventions can create significant, lasting impacts.

The transformation of Yaba from an overlooked suburb to a technological powerhouse offers valuable lessons for other regions. It underscores the importance of nurturing potential rather than imposing rigid plans. Policymakers and stakeholders looking to replicate Yaba’s success should focus on supporting organically growing clusters, where communities can naturally coalesce, they should work with these communities to identify and address key barriers, and prioritise interventions where the economic flywheel can gain momentum from the smallest pushes.

For a deeper dive into the remarkable evolution of the Yaba Tech Cluster, [download the full case study here]