Konza City: A Silicon Savannah or Another White Elephant? My Take

The other day, our president officiated the “ground breaking” ceremony for a Kshs 800 billion technology city, probably the first of its kind in Sub Saharan Africa. 3 cheers to the president!

I think it is a good initiative, we are perfecting the art “borrowing” ideas from other countries, and really, what is Silicon Savannah without a Silicon Valley equivalent? The government will be investing 5% of the total budget (Kshs 40 billion), and the rest will come from the private investors. I could talk about the viability of the investment, but I won’t. My one question is this:

At the state we are in as a country, and where our IT industry is at, if the government had Kshs 40 billion to spend, is a city the best place to invest it in?

I sincerely think it is a case of misplaced priorities and putting the cart before the horse. I am a fan of local technology, and on several occassions have pushed our techies to take their eyes off mobile solutions, and to focus on enterprise business. I want to hear of Kenya exporting technology solutions. I have a dream that one day Barclays Bank of Kenya will use a locally developed system, and we will have ERPs with Swahili names.  Is that what Konza is expected to deliver? I think not for several reasons:

BPO is not aligned to Vision 2030 at all!

According to the website, the city aims to aims to promote Business Processing Outsourcing and Information Technology Enabled Services (BPO/ITES) industries for wealth and employment creation. It’s flagship project is a BPO centre. Oooops! Looks like we are building a Silicon Valley, but copying the India business model. There is nothing wrong with outsourcing, India have perfected it. There’s something wrong with outsourcing for Kenya, because it clashes heavily with the Vision 2030 mission, which is to transform Kenya into a middle income country.

No one will outsource to a middle income country, because they will have to pay middle income prices, meaning India still comes out on top at this one. In fact, as a middle income country, we will be outsourcing to India. So unless Mugo Kibati is telling me that Vision 2030 is just talk, in about 17 years,Konza’s flagship project will be obsolete. If my elementary investment knowhow serves me right, it would take over 50 years to recoup the cost of building a city, especially the investment in mass transport and such.

A techno city doesn’t work for our SMEs

In Kenya at the moment, technology is considered as an after-thought for a majority of business. We buy software when everything else fails.  Businesses for whom technology is key will continue to import technology, and they are very few in the large scheme of things. This means Kenyan techies need to work to convince SMEs that technology does mean cost savings for them. As I said, I’m a champion for enterprise technology, and I would love it if we developed solutions for businesses. However, the only way Barclays will test a system is if 30 micro banks have used it and are more efficient as a result.

How do we get the 30 microbanks to use it? We have to be where these micro banks are, because often technology is collaborative. The first version of any software fails more than it works.  Do we expect these microbanks and other micro businesses to relocate to Konza, then have their customers commute there to find them? That is not going to happen.

Now that we have agreed Vision 2030 and BPO just don’t work together, and that we need viable solutions for SMEs first before we go for the big fish, what do we do with this 40 billion that we have to spend? It isn’t useful to whine about it without a half baked idea of my own.

Konza Technology University Maybe?

With 40 billion to spare, I would build a Konza Technology University, for several reasons:

1. Talent and training. Let us not kid ourselves, in terms of training, we are a loooooooong way to go to be Silicon Valley kinds. We are still producing tech graduates who cannot code to save their lives. A well equipped university whose sole focus is practical technology would very easily fix that. It would have to be a different kind of university, whose lecturers have actually done stuff that works. Import lecturers from Silicon Valley maybe, and some of our own techpreneurs.

2. Research. Since it is a government funded institution, it would have resources to research and solve actual problems, starting with the government’s own technological challenges, which currently cannot be solved profitably. A university would do this perfectly without the financial pressures an entrepreneur would have to deal with. The revenues from this make it sustainable.

3. Education naturally attracts enterprise. Once you have such an institution, businesses start to crop up to support it, and 40 years down the line, voila! You have Konza City!

Long story short, I am a Konza (and if not, a Vision 2030) Skeptic, but it may surprise everyone.