Kenya into the knowledge economy

by Jörgen Eriksson on May 18, 2012

In the past 48 hours I have got a glimpse of the reality of recent economic development in eastern Africa, and it is impressive. It has been some years since I was in Nairobi last time and what I found this time shows the power of rapid economic growth combined with a young populations ability to quickly build knowledge in new technologies and social media.

kenya-flagKenya has solid economic, social and political foundations which makes it attractive for foreign investors. The stability has been reinforced by the introduction of a new constitution, approved by a referendum in 2010,  which separates the three arms of government (executive, legislative and judicial) and introduces two levels of government (national and counties) and many other reforms and changes.

We in Bearing often tell our clients about the importance of an innovation support system, to encourage establishment, development and growth of SMEs. In Kenya of today I found several steps to establish this in practice.

iHub

ihubIn Nairobi I found the iHub – Nairobi’s Innovation Hub for the technology community, which was set up in 2010. It is a co-working space and business incubator for young entrepreneurs, web and mobile phone programmers, designers and researchers, also providing access to investors and tech companies.

Even mighty multi-nationals comes to visit the iHub, where Nokia’s CEO, Stephen Elop during a round-table meeting recently said:

“There is advanced development happening in Kenya. It is part of the reason why I am here. I am not visiting the 54 countries in Africa. I am only visiting Kenya and South Africa”.

The iHub has corporate partners such as Google, Microsoft and Nokia.

ICT board and technology usage

SONY DSCDuring lunch today, we went for a meeting to the Karen country club, founded in 1937, which makes it one of the oldest golf clubs in Kenya. We did not go for the venue though, we came to meet with one of the key people in Kenya’s ICT development, Paul Kukubo who is the Chief Executive Officer of the Kenya ICT Board.

Paul told us about how successful innovations in mobile usage and mobile banking and social media is for the people in Kenya. He also told us about success stories leading to new companies with world-unique offerings.

Back at the hotel I did some research. In the country there are currently 25 million people with mobile phones, representing 65% of the population. The total number of internet users in Kenya are 12.5 million and 98 percent of them access the internet through their mobile phones. Regarding social media, there are at least 1,3 million Facebook users.

Vision 2030

Kenya vision 2030Some years ago, the government in Kenya presented Kenya Vision 2030. It is the country’s development blueprint covering the period 2008 to 2030 and its objective is to help transform Kenya into a, “middle-income country providing a high quality life to all its citizens by the year 2030”. The Vision is based on three “pillars”: economic, social and political projects and reforms.

The economic pillar aims to improve the prosperity of all Kenyans through an economic development programme, covering all the regions of Kenya. It aims to achieve an average Gross Domestic Product (GDP) growth rate of 10% per annum beginning in 2012.

To achieve this target, Kenya is continuing with the tradition of macro-economic stability that has been established since 2002 and it is also actively addressing other key constraints, notably, a historically low savings to GDP ratio. Delivering the country’s ambitious growth aspirations will require a rise of national savings from 17% in 2006 to about 30% in 2012.

Six key sectors are being given priority as the key growth drivers for achievement of the economic vision:

    • Tourism
    • Increasing value in Agriculture
    • A better and more inclusive wholesale and retail trade sector
    • Manufacturing for the regional market
    • Business Process Outsourcing
    • Konza locationFinancial Services

Konza Technology City

One of the flagship projects to achieve economic growth will be Konza Technology City, which is to be developed as a greenfield site in a central location, 60 km from the heart of Nairobi and 50 km from Kenyatta international airport. It is dubbed "where African silicon savannah begins" and the park is set to host business process outsourcing (BPO) ventures, a science park, a convention centre, shopping malls, hotels, international schools, and health facilities.

 

Wildlife tourism

After a hectic schedule of meetings and visits to these exciting locations, I am looking forward to visiting Kenya´s other main unique asset tomorrow; its nature with a unique flora and fauna.

giraffeA large proportion of Kenya’s tourism centres around safaris and tours of its great National Parks and Game Reserves. Tomorrow morning we will visit Nairobi National Park, which is the main tourist attraction for visitors to the capital city. The parks attractions include diverse bird species, cheetah, hyena, leopard, and lion.

As frequent readers of this blog may recall, I visited Costa Rica earlier this year, where 70% of the land has been dedicated to national parks. Costa Rica could do so as the country has established itself firmly in the knowledge economy, with large BPO establishments from companies like Intel and Dell and large establishments of call centers.

I believe success in the terms of Vision 2030 for Kenya might include a combination of the path currently entered to develop the knowledge economy in combination with a brand development focus on wildlife and eco tourism, for which the country has such abundant natural assets.

For the inquisitive traveller, I highly recommend a visit.

About Jörgen Eriksson :

Jörgen Eriksson is the founder of Bearing and is the Chairman of the firm since it was created. He has successfully expanded Bearing into covering projects on four continents. He is also Adjunct Professor of Innovation Management at the International University of Monaco and at Universitat Politècnica de Catalunya in Barcelona and he is an active member of the Founders Alliance organisation.

Working with consulting engagements across Bearings practices, he has over the past fifteen years participated in and supervised a large number of client projects, from innovation system development and place development and branding, to merger and acquisition assignments and leading edge research and business development activities for key clients.

His new book, Branding for Hooligans, will be published in 2015. It is about how innovation and branding are key survival factors in our modern times of hyper competitive markets.

Prior to Bearing, he was Director of Europe, Middle East, and Africa for Trema Treasury Management, a technology and consulting services provider, supplying financial software solutions for the global financial industry, Clients included The European Central Bank, Citibank, SEB, South African reserve Bank, Deutsche Bank, Abu Dhabi Investment Authority (ADIA), as well as many other large financial institutions and Fortune 500 companies.

Early in his career Eriksson was educated at the Stockholm School of Economics, where he studied economics, financial economics and philosophy. He then worked in Scandinavian investment banks and also for the Swedish Institute of National Defense Research.

You can contact Jörgen on e-mail jorgen.eriksson@bearing-consulting.com, connect on LinkedIn on http://fr.linkedin.com/pub/jörgen-eriksson/0/38/8a0/ and follow him on twitter on joreri508.

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