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Kenya - Building Africa’s Silicon Savannah

 

The Konza Techno City initiative was launched as part of the economic pillar of Kenya’s Vision 2030 development plan, with this new “smart city” dubbed Africa’s ‘Silicon Savannah’. Many expect that Konza will transform Kenya into Africa’s ICT hub and that poverty and unemployment levels will benefit from the $10 billion initiative. However, the rural location of the 2,000-hectare Konza site, as well as the reliance the project places on the goodwill of foreign investors, has sparked concern that Kenyans may be marginalised as Konza develops.

The Plan for Konza Kenya’s Vision 2030 includes a number of large-scale plans, such as the building of Lamu port and transport corridor to South Sudan and Ethiopia, the construction of a range of new roads in the north of Kenya and the development of a standard gauge rail system, all aimed at transforming Kenya into a middle-income country and a regional economic hub. It is also hoped that Vision 2030 will see the Kenyan economy achieve a growth rate of 10 percent per year. Konza Techno City is only one part of the ambitious plan.

The rationale behind the Konza project is to enhance Kenya’s Information Technology Enabled Services (ITES) industry. Konza is expected to have a positive impact on the country’s economy by creating opportunities for local investors, attracting external investors, supporting start-up incubation and creating jobs for locals.

At the groundbreaking ceremony held on 23 January this year, then-President Mwai Kibaki said of Konza: “It is expected to spur massive trade and investment as well as create thousands of employment opportunities for young Kenyans in the ICT sector.” At the ceremony, Kibaki reiterated the promise that Konza would bring with it 200,000 new jobs in the ICT sector, a sentiment echoed by acting-CEO of Konza Technopolis Development Authority, Dr Catherine Adeya. Dr Adeya insists that the project will create over 17,000 jobs by 2017.

The project also carries the promise of great infrastructure development across the region. Construction of a dual carriageway between the capital city of Nairobi and the Konza site will be funded by the World Bank and will begin no later than January 2014. Furthermore, Kenya Railways is in the process of developing a new railway network, including both high-speed and standard train routes, which will include Konza as a stop, making the rural location easily accessible.

The Location

Despite the many promises made, several issues regarding the Konza project remain controversial and occupy the dialogue of both industry players and Kenyan society at large. One of the most contentious issues around Konza Techno city is its location. The tech city is located on the site of the former Malili Ranch, straddling the Machakos and Makueni districts, some 60 kilometres from Nairobi. The site is also 50 kilometres from the main international airport – Jomo Kenyatta International Airport.

According to Dr Adeya, the location was a strategic choice. She says: “The location of the Konza Techno City was informed by the Booz Hamilton Principal, where ICT parks tend to be located in dedicated areas outside the main city and within a short driving distance. They also tend to be located within a short driving distance from the airport as well as prominent universities. This clearly suits Konza as a choice location with its distance from Nairobi, and Jomo Kenyatta International Airport,” Adeya said. “Booz Allen suggests the park dedicates 30 to 50 percent of their space to green areas, with the objective to create a distinctive and attractive environment. Konza as a green field site therefore gives this kind of environment.”

One commentator at the ground-breaking ceremony noted that Konza marks the first time in Kenya’s history that a city will be located on a chosen site. Many local individuals and businesses are celebrating the development that promises to include the rural region in an industry that has hitherto been limited to Nairobi. But it is uncertain whether or not this location will ensure the success of the Konza vision.

Many question the wisdom of building a city in the countryside, with only a promise of transport links and an expectation that the local and international ICT population will relocate to this new site from their well-established locations in the capital.

For many start-up companies and investors, Nairobi already has a centralised tech industry centre – Ngong Road. Ngong Road is home to numerous tech hubs including the iHub, 88mph and the NaiLab. The iHub was launched in 2010, while 88mph debuted in 2011. New tech incubators are constantly springing up along here. By the time Konza Techno City reaches fruition (by 2030), the Ngong Road hubs will be 20 years old. There is a chance that they might not want to give up their well-known addresses to relocate to the countryside.

Investors, Local and International

Konza is expected to attract wide-spread investment from both local and international entities, which will set up shop in the new smart city. Unfortunately, details about how this aspect of the project is developing in real-time has been less than forthcoming.

At the ground-breaking ceremony earlier this year, it was revealed that 15 companies stand ready to join the project from its onset. Some of the local entities officially named include Safaricom, Wananchi Online, Nairobi Hospital, Kari, Kemri, University of Nairobi, Multi Media University and Jomo Kenyatta University of Technology. The amount of investment from each organisation has not yet been revealed. Foreign investors Huawei Technologies, Samsung and Telemac have committed to a presence at Konza, while a large string of prominent foreign companies haveexpressed interest in the project, including BlackBerry (formerly Research in Motion), Boeing, Fedex, Google, Toyota, Craft Silicon, Telemax Technology Corporation, Shapoorji Pallonji Group and Dhanush Infotech.

The lack of transparent information about investors and their respective levels of investment, has fuelled fears that local investors will be marginalised at Konza. Many expect that the lion’s share of investment will come from foreign companies. Adeya, meanwhile, insists that local investors are very interested in Konza. “We have more than 300 local companies and individual investors who have applied and shown interest in various investment fields of Techno city. This is projected to increase once the project hits the ground,” Adeya says. “Kenyans have even gone ahead and bought the neighbouring land whose prices have now skyrocketed to unimaginable prices.”

Meanwhile, officials continue to urge investors of all nationalities to get involved in the Konza project, particularly after the scheduled ground-breaking ceremony was postponed by nine months reportedly due to the lack of investor interest.

Fostering Start-ups and ICT Education

Those in support of Konza say the techno city will foster innovation and start-ups by playing host to a number of research labs and incubation centres staffed by Kenyan innovators and entrepreneurs. Potential partnerships with local institutes of higher education are expected to bolster ICT education. “Konza Techno City will have Science and Technology and BPO Parks where innovators will be harnessed and incubated to develop their innovations. Konza will work with universities and other technical institutions to develop and harness best skills locally and provide them with the required environment and facilities to advance their skills,” Adeya explains. “The city will attract international ICT Firms such as IBM, who have already established a research facility in Kenya. The IBM Research Lab is the first of its kind in Africa. This will facilitate technology transfer to the locals. Konza will also act as an incubation centre for young entrepreneurs,” she continues.

However, the IBM Research Lab already caused uproar in Kenya after it emerged that the company, in conjunction with Stanford University, had intentions to staff its Research Lab with individuals holding postgraduate degrees and boasting many years of experience. Outrage erupted in Kenya when a local newspaper, Business Daily, published a memo from IBM to Stanford University advertising for applicants, which in addition to setting out the very high educational requirements for potential employees, read: “We are aiming to hire world-class scientific talent with expertise in mobile technologies, statistical analysis, data mining, human-computer interaction and other domains”. Many believed this memo suggested a bias against Kenyan applicants disadvantaged by a less-developed higher education system and a lack of experiential opportunities. It is unclear why the situation would be any different in new research institutions launched at Konza.

Employment Opportunities

Konza is heralded as a way out of poverty and the solution to the high unemployment rates in Kenya. The tech city promises the creation of 200,000 new jobs in the ICT sector by 2030. However, as with the IBM Research Lab, it is far from certain that foreign companies will choose to staff their Konza-based units with Kenyan employees, particularly considering Kenya’s self-admitted lack of highly educated and specifically trained individuals.

Kenya has repeatedly identified the lack of capacity as a significant hindrance to the economy. In 2011, the former-Ministry of Information and Communications’ Kenya ICT Board released its Julisha Monitoring and Evaluation Survey, which revealed that the main complaint of companies operating in the ICT sector in Kenya was the lack of qualified staff. According to the report, 9,600 new individuals were needed to fill ICT sector positions by 2013, with the report concluding that there is simply not a sufficiently qualified workforce in Kenya to fill these positions locally.

One quarter of respondents to the Julisha Survey said that they were dissatisfied with the quality of Kenyan education as experienced through the hiring of Kenyan staff, while one third of companies revealed that, due to the lack of capable individuals, they fill vacancies through external sources rather than turning to Kenyan universities.

In his inaugural speech, newly elected President Uhuru Kenyatta touched upon this shortcoming in ICT education and training and pledged to improve ICT education across Kenya by providing one laptop per child starting in Class One next year. “We believe early exposure to technology will inspire future innovation and be a catalyst for growth and prosperity,” the President said.

Whether or not Kenyatta’s initiative bears fruit over the coming 25 years remains to be seen. In any case, the one-laptop-per-child policy will not have any direct impact on the ICT sector capacity of the Kenyan workforce in time for the near-term staffing of Konza.

Is Konza the Answer?

“I am telling the doubting Thomases to open their eyes wide and see what we are going to come up with,” Kibaki declared in January. Many hope he will be right. The potential benefits to Kenya and East Africa, in terms of the economic and social possibilities that come with a thriving ICT hub, would be extensive.

Source: VENTURES AFRICA