Lagos has attracted more global attention over the past decade than at any point in its history. Yet much of the conversation still revolves around startups, funding rounds and valuations. That misses the more important story. The real achievement is not that Lagos has produced successful companies but that it has begun to create the conditions for entrepreneurship to flourish.
BCG’s latest research, Entrepreneurial Capitalism Will Be Built City by City, argues that the most important economic competition increasingly is not between countries but between cities. The cities moving fastest are those that make it easier for entrepreneurs to build businesses.
The report identifies 16 “rapid riser” cities worldwide that climbed more than 20 places in global startup ecosystem rankings over the past decade. Among them is Lagos. What makes these cities interesting is not simply that they have produced successful startups. It is that they have outperformed economically, recording stronger employment growth and GDP growth than global averages over the same period – a critical distinction.
The debate around entrepreneurship often centres on unicorns, venture funding announcements, and technology valuations. Yet the report’s findings suggest that successful entrepreneurial cities are built on something much broader. The most successful cities combine five ingredients: talent, customers, capital, supportive policy, and entrepreneurial networks. Venture capital is only one part of the equation.
We spend a great deal of time discussing what entrepreneurs need from government. The report points to a different question: what do entrepreneurs need from cities? The answer is not another innovation hub or startup programme. It is access to talent, customers and institutions that work. The cities that get those basics right tend to outperform those chasing the latest headline.
A decade ago, few international investors viewed Lagos as a globally significant technology hub. Today, many of Africa’s best-known technology businesses were founded or scaled there. The city now has enough founders, investors and technical talent to create its own momentum.
Crucially, this progress did not begin with venture capital. BCG’s research found that rapid-riser cities first developed strong pools of talent and intellectual property. They then created pathways to customers. Capital followed. Cities that attempted to reverse that sequence often struggled to sustain momentum.
Across the continent, entrepreneurship strategies often focus on financing. Access to funding is important, but funding alone does not create a startup economy. The most useful insight in the report is also the simplest: customers matter more than capital. The rapidly rising cities built pathways to demand before they built pathways to funding. Entrepreneurs need customers before investors, skilled employees before growth capital, and institutions that help ideas become businesses.
There is no shortage of commentary on infrastructure constraints, funding gaps or regulatory challenges. The more interesting question is what is already working.
The priority is not another startup initiative. It should be to make Lagos a better place to start and scale a business. That means strengthening universities, improving mobility, digitising public services, encouraging business formation and creating opportunities for entrepreneurs to access large corporate and public sector customers.
One of the less discussed findings from the research is the role large companies play in helping entrepreneurial cities grow. Rapid-riser cities did not rely solely on founders and investors. Established businesses became early customers, commercial partners and demand generators for emerging companies.
As confidence gradually returns to Nigeria’s economy, there is a tendency to focus on individual sectors or companies. A more important question is whether Lagos itself is becoming a better place to start and scale a business.
The lesson from the report is not that every city can become the next Silicon Valley. The lesson is that entrepreneurial success tends to follow a predictable pattern. Talent comes first. Customers come next. Capital follows.
Lagos is further along that journey than many people realise. The question now is whether the city can build on that foundation. If it can, its greatest economic contribution may not be the next unicorn or billion-dollar funding round. It may be proving that a globally competitive entrepreneurial city can be built in Africa.
Olayinka Majekodunmi, Managing Director & Partner, BCG Nigeria
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