The hype of Nairobi becoming a Silicon Savannah gave a lot of hope that Kenya will transition to a knowledge-based economy. Today, the sector seems to be stuck in a rut with innovation and job creation in the startup ecosystem stagnant. Where did we go wrong?
We have a slump because we did not actualize the growth pattern we had at the beginning. The idea was to make universities interested in the digital dream through research that would in turn be applied to the startups ecosystem.
Today, however, the research community and the developer communities are back to their silos. Teamwork is necessary for success in information technology but at the moment nobody is reaching out to the other and what we need is someone to whip everyone into one ship and renew the vigour we once had.
Universities are mostly at fault. We are behaving as though we are in the industrial era, as if we do not understand what is happening or what is going to happen. The idea behind Konza for example was to create a digital knowledge centre with research facilities for universities. That is why the Korean Advanced Institute of Science and Technology (Kaist), one of the first international partners had confirmed tenancy. Local universities however are yet to get on board.
We had a false start with trying to sell Kenya as a Business Process Outpost, (BPO) but this did not work because we lacked facilities when compared to countries like India. I tried to hire the whole of Sameer Park and create jobs for 15,000 people but the project was sabotaged.
Similar attempts to build capacity through partnerships with the private sector also faltered because we failed to honour our side of the commitment. We had a partnership with IBM to train five PhD specialists at their new research lab but Kenya reneged on the contract by failing to provide the funding.
Some industry insiders have stated that the growth in the ICT industry in the last ten years was a large part because of the leeway your administration provided. What is your take on this?
I was able to make risks and still work for the Government simply because our former president Mwai Kibaki allowed me to do so. If you can’t allow people to make and accept risks, you will never succeed.
When you have policy makers who are not enabling innovation to take place you have to dictate from the top. For innovation to be possible, people must have the data in their hands. Kibaki understood this when he launched the Kenya open data portal and said, “Give the young people what they want”.
That is why I say you need to operate like an activist policy maker in order to help the people. You need to be the early adopter of technology in order to exploit it.
For example the M-Pesa innovation is old now and costs a lot of money for people to send money. With Bitcoin users virtually pay nothing to transfer money but the regulator has slammed the door on it in the Kenyan market. If we wait for the rest of the world to adopt Bitcoin before we get on board there will be no premium to earn at that point.
Does this mean Kenya is losing its place as the regional ICT hub and what exactly is at stake?
Foreign direct investment follows research and development. We must begin to innovate for us to get funding and attract venture capitalists. There are so many technologies set to disrupt our industries and it takes some time before we all understand it. However, most of the time techies lead the conversation and no one is available to translate in simple language how it can be applied to everyday use.
The kind of training our young people are getting today does not adequately prepare them for the disruption set to take place. Our universities are still stuck in the 60s and we are not at par with the rest of the world.
The central and county government seems to be at longer heads over the operation of the Integrated Financial Management System (IFMIS) payments systems. What in your opinion in terms of the best way of solving the issue?
Key database software is normally installed with strong checks and balances in place. You have operators, auditors and administrators and there is an authentication process for each user in the system and each transaction can be flagged with an email to the administrator. This is not the case with IFMIS.
The system is run by cartels and when they want money from the Government someone goes physically and switches it off and they say the system is down.
When the system down, it means you can now do all the tendering you want since the system is not checking to see if the money is available or not. In two days you find pending bills in excess of Sh100 billion indicating someone has been alerted that the system is not working and there is a windfall. This happens every May.
All we need to do is go back to the software provider, Oracle and purchase the software as a service. This means we pay the provider to host the system on a cloud and with the servers outside the country there won’t be cases of a system outage.
But this requires a very strong message from the top that we are committed to fighting corruption. Software has never been a problem. It is the people.
Airtel recently announced it would exit 14 countries including Kenya in the next one year. What does this say about our telecommunications sector?
I partly blame Airtel for not being able to stay competitive in the market. They were the first company in the market and as KenCell, they were ahead of Safaricom. They failed to keep pace with innovations. It again takes us back to the advantage of being early adopters. By the time they got into mobile money, Safaricom had already commandeered a huge share of the market.
Airtel also refused to get on board the East African Marines Systems (TEAMS) undersea cable project despite our invitations. They therefore couldn’t compete on data since the competition has much more capacity.
You cannot focus on voice alone anymore. Jamii Telcom and Telkom Kenya were able to realign themselves and build on their enterprise business and are now more competitive than Airtel in that space.
But what efforts have Airtel made and failed because you can’t just sit and say bring this one down. That is what the US did when they decided to break up AT&T but it still remains the largest carrier.
Which area should we look to for the next disruption?
The next innovation is going to be around music. Music was disrupted when the production of cassettes stopped and sales slumped. But creativity has really increased and Blockchain enables one to exploit revenue generation streams online. You cannot steal a sigle coin from them.
Disruption is also coming in media and entertainment where service providers like Netflix, Hulu and Amazon are set to change how entertainment content is produced, distributed and consumed.