Ethiopia’s Job Creation Commission (JCC) is trying to use examples from Silicon Valley, particularly regulatory sandboxes to speed up innovation. Hopes are that this will encourage creative businesses and develop more jobs.
A regulatory sandbox (RS) usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of the testing. Loosely defined, a sandbox approach means experimenting and learning before finally adopting a technology or system. This approach helps in containing the impact of failures.
In other parts of the world, the sandbox approach has been allowed new innovative companies to test their products and then eventually turn into multibillion USD technological businesses.
Technological innovation in Ethiopia is considered a new opportunity for the young generation to expand and create jobs. It is one of 11 pillars of job creation in an ambitious plan announced on Thursday October 31 at Sheraton Addis.
In his presentation, Ephrem Tekle, Commissioner of JCC, said that regulatory sandboxes are vital to get innovators involved in business.
“In our business environment we do not do enough to encourage new ideas and innovations,” Ephrem said, adding that this needs to change.
In the current stage if innovations try to start their test the government system does not allow them since there is no regulation or rule to manage the new idea. “We force them to stop until the regulatory body evaluates and understands the system and ratifies regulation. This must be stopped,” he said. He gave Ride Transport as example that came with a new, useful idea but experienced challenges because the regulatory body did not have a rule that manages such business meanwhile it has created massive jobs and modern services.
He said that the implantation of a regulatory sandbox will allow innovators to start their operation and at the same time improve government interaction with their business. The scheme is applied in the developed world in Silicon Valley.
Despite variations, most sandboxes adhere to its established, simple format in carving out exceptions for regulatory non-compliant, yet operational firms: application, selection, testing and exit. Eligibility, instead, is less standardized and more scattered. Some sandboxes favor incumbents, others start-ups. How segregated sandbox participants remain from the general public (usually in the form of customer caps), or whether or not a compensation fund is a precondition in the event of a breakdown, are idiosyncratic to each sandbox.
Niat Tsegaye, Program Analyst at JCC, told Capital that the regulatory sandboxes idea was proposed to the Ministry of Trade and Industry, Ministry of Revenue and National Bank of Ethiopia that they form an IT unit to encourage individual innovators and enable them to continue in their business until a relevant rule is adopted.
Startups with visionary entrepreneurs have emerged in the past over decade and changed the world with their new business idea and simplify life. To handle their creativity and continue on their business governments regulatory bodies gave them tolerance against the formal regulatory manner.
Even though it started in the developed world regulatory sandboxes have also expanded in developing countries including countries in Africa.
The Ethiopian government has launched the 20 million job creation initiative until 2030 and sectors that target to accommodate new jobs are modern agriculture like horticulture, poultry, mining, industry, service sector including creative arts and tourism. The technology sector is also one of the priority areas that the government want to see to become big.
At the launching program Demeke Mekonnen, Deputy Prime Minister, said that job creation is the centerpiece of major economic reform programs including Home Grown Economic Reform and the improving of the Ease of Doing Business. He called the youth to give attention for its growth than being tackled by a political agenda.
For the year the government has targeted to create 3 million jobs and within ten years 20 million.
In a related development at the press conference held on Wednesday 30 at Radisson Blu Mastercard Foundation launched a job creation program for over 10 million young people by 2030.
This follows the launch of an initiative, Young Africa Works in Ethiopia, by Mastercard Foundation that will seek to create employment opportunities for the youth in partnership with Ethiopia’s JCC. Mastercard Foundation has committed an initial USD 300 million to the initiative.
Young Africa Works in Ethiopia is aligned with the Ethiopian government’s plan to create new jobs to spur economic growth and was designed in partnership with the government, the private sector, academic institutions, and young people. 
Mastercard Foundation will work with JCC to create programs to catalyze growth in the tourism, agriculture, manufacturing, and ICT sectors. Programs will support entrepreneurs and small and medium-sized businesses to achieve greater productivity and expand income-generating opportunities.
The Foundation announced its first phase of implementing partners, including the International Centre for Insect Physiology and Ecology (icipe),  Kifiya Financial Technology, First Consult PLC and DAI Europe, Dalberg, Ministry of Innovation and Technology, and SNV. The cumulative value of the first phase of partnerships is over USD119 million and will see more than 1.4 million direct work opportunities contributing to Young Africa Works in Ethiopia’s goal of 10 million work opportunities by 2030.
“Through my travel across Ethiopia, I’m inspired by the creativity and dynamism of young entrepreneurs and how their innovations are bringing about meaningful change in their communities,” says Reeta Roy, Mastercard Foundation President and CEO. “Young Africa Works will support them by providing access to finance, business development support and skills development so they can further scale their businesses to create more jobs for young Ethiopians.”