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Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
Kenya tech sector policy paper   big picture final v04 brian
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Kenya tech sector policy paper big picture final v04 brian

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The paper presented at Connected Kenya outlining private sectors proposals

The paper presented at Connected Kenya outlining private sectors proposals

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  • 1. ICT IN KENYA #140Friday   Sector  Policy  Paper  ICT  INDUSTRY  DEVELOPMENT  &  GOVERNMENT   INCLUSION   Nairobi  3rd  April  2012  
  • 2. ICT INKENYA 2  
  • 3. CONTEXT   ICT IN KENYACREATING  A  SUSTAINABLE  ICT  INDUSTRY  WITHIN  KENYA   q  The  Kenyan  ICT  industry  is  immature  and  suffers  from  significant  internaSonal  compeKKon   q  Vision  2030  for  Kenya  provides  a  high-­‐level  vision  for  economic  development   SITUATION   q  The  Kenyan  governmental  legislaSon  lacks  a  clear  ICT  vision  to  support  development     q  Planned  ICT  developments  within  the  Kenyan  government  offers  a  large  internal  market   q  The  scaDered  ICT  landscape  lacks  sufficient  structure  and  organizaKon  to  aDend  the  market   q  Kenyan  ICT  educaKon  lacks  focus  to  aDend  to  specific  needs  for  all  types  of  industry  players  COMPLICATION   q  ICT  development  lacks  vision  and  support  to  aDract  investors   q  InternaKonal  players  see  ample  opportunity,  endangering  the  local  compeKKve  posiKon   ü  How  do  we  develop  a  strong  ICT  industry  in  Kenya  making  opSmal  re-­‐use  of  exisSng  means?   CHALLENGE   ü  How  do  we  ensure  sustainable  development  fiYng  within  Vision  2030  for  Kenya   ü  How  can  we  align  all  local/internaSonal  stakeholders  creaSng  a  win-­‐win  situaSon  for  all   INTENTION   Ø  WE  PROPOSE  THE  FOLLOWING  PLAN  FOR  SYNERGY  WITH  GOVERNMENT   4  
  • 4. INDUSTRY  ANALYSIS   ICT IN KENYATHE  KENYAN  INDUSTRY  ASSESSMENT  SHOWS  CLEAR  AREAS  FOR  ATTENTION   Strengths   Weaknesses   S W     §  Private  sector  recognises  need  for  beDer   §  Sub-­‐opSmal  procurement  process  for  local  players   engagement  with  Government   §  Lack  of  tailored  (tax)  legislaSon   §  Large  internal  Kenyan  market   §  Technical  educaSon  and  industry  needs  misaligned     §  ICT  inclusion  in  Vision  2030   §  Limited  availability  of  investments   §  Recent  technological  advancement  (Fiber)   §  Lack  of  governmental  ICT  representaSon   §  AmbiSous  Workforce   §  Lack  of  Public  Private  Partnerships  in  ICT  (PPP’s)   §  Acknowledged  innovaSons/technologies  (MPESA)   §  DiplomaSc  services  lack  focus  on  ICT  opportuniSes   OpportuniKes   Threats   O T     §  Significant  government  Investment  in  ICT   §  Growing  Kenyan  market  aDracts  internaSonal  ICT   §  Labor  costs  provides  labor  arbitrage  potenSal   players  threatening  local  ICT  companies   §  Growth  of  average  size  of  Kenyan  companies   §  GlobalizaSon  of  the  ICT  industry  simplifies   internaSonal  service  delivery  to  Kenyan   §  Recognized  ICT  hub  developments  (incubators)   companies   §  Intended  creaSon  of  Konza  as  ICT  ecosystem   §  African  economic  development  creates  significant   §  Entry  of  internaSonal  ICT  players  (Nokia,  IBM)   near-­‐shore  compeSSon   §  CreaSon  of  EAC  provides  larger  market   §  Established  human  capital  flows  to  MNC’s   5  
  • 5. INDUSTRY  DEVELOPMENT  NEEDS   ICT INA  PROVEN  ICT  INDUSTRY  DEVELOPMENT  STRUCTURE   KENYA Source:  Australian  Business  Founda3on   6  
  • 6. INDUSTRY  COOPERATION   ICT IN KENYAINDUSTRY  DEVELOPMENT  MUST  BRING  TOGETHER  ALL  INDUSTRY  STAKEHOLDERS   PRIVATE   MARKETPLACE   End  Users   Companies   -­‐  Projects   -­‐  Exper?se   Incubators   -­‐  Marketplace   Banks   Producers   Insurance   -­‐  Products  &  Services   -­‐  Skilled  workforce   -­‐  Funding   ICT  INDUSTRY   -­‐  Experience   -­‐  Exper?se   FINANCIAL   -­‐  Infrastructure   PLAYERS   -­‐  Industry  standards   -­‐  Representa?on   -­‐  Confidence   MARKETS   Investment   Industry   -­‐  Projects   funds   representa3ves   -­‐  Legisla?on   -­‐  Educa?on   VC’s   -­‐  Tax  regula?on   Universi3es   Unions   KICTB   E-­‐G-­‐ovt   GOVERNMENT   7  
  • 7. KEY  SUCCESS  FACTORS   ICT IN KENYAENSURING  COOPERATION  FROM  ALL  STAKEHOLDERS  REQUIRES  BENEFITS  FOR  ALL   RESPONSIBILITY   KEY  SUCCESS  FACTORS   ü  Public  Private  Partnerships  (PPP)   ü  Governmental  incenSve  structure   PRIVATE   CREATE  A  SOLID  STREAM   ü  Stable  entrepreneurial  environment   MARKETPLACE   OF  ICT  WORK   ü  Virtual  marketplace  environment   ü  ProtecSon  of  IP  Rights   ü  Predictable  quality     ü  Solid  service  delivery  methodology   THROUGHOUT  THE   ICT  INDUSTRY   DELIVER  HIGH  QUALITY   ü  Focused  educaSonal  “curriculum”   ENTIRE  LIFE  CYCLE   PLAYERS   PRODUCTS  AND  SERVICE   ü  Strong  coach/mentor  network     ü  Strong  business  services  support   “SUPPORT  FROM     INFANCY  TO  MATURITY”   ü  Shared  financial  risk  profile   PROVIDE  SUSTAINABLE   ü  Aligned  exit  strategies   FINANCIAL   AND  PREDICTABLE   ü  Strong  partnerships     MARKETS   FUNDING   ü  Public/private  investment  funding   ü  Governmental  taxaSon  sSmulus   ü  Long  term  sustainable  vision     GOVERNMENT   SUPPORT  AND  FACILITATE   ü  Sufficient  budget  and  focus   8  
  • 8. KENYA  ICT  DEVELOPMENT   ICT IN KENYAFRAMEWORK  TO  SUPPORT  THE  KENYAN  ICT  INDUSTRY  PLAYERS  ACROsS  THE  LIFECYCLE   MATURITY  LIFE   ENTREPRENEURS   SME   MNC   CYCLE   Kenyan  Marketplace   Virtual  Marketplace  Africa   Global  Marketplace   Nairobi…..   PRIVATE   -­‐  SME   -­‐  MNC   -­‐  Kenya   -­‐  Rest  of  Africa   -­‐  -­‐  Konza  City   Kenya   MARKETPLACE   -­‐  Gov’t   -­‐  Incidental  offshore   -­‐  Con3nent   +  rest  of  Kenya   -­‐  Global   IncubaKon   Business  Support   ConKnuous  improvement   ü  Support  on  product,  skill  and   ü  Support  on  business  advisory  and   ü  Support  by  providing  a  (virtual)   ICT  INDUSTRY   business  development   development   networking  environment,  an  ICT   ü  Facili?es  providing  workplace,   ü  Cer?fica?on  of  technical  skills  and   market  place,  and     PLAYERS   internet  and  meeSng  place   delivery  maturity  (Prince  II)   ü  Diploma?c  support  to  create   ü  Educa?on  on  business  processes,       ü  Educa?on  on  industry  standards  &   internaSonal  demand  for  Kenyan   -­‐methodologies  and  -­‐behavior   methodologies  (Lean/SixSigma)   ICT  products,  services  and  skills   -­‐  Banks   -­‐  Na3onal   FINANCIAL   -­‐  -­‐  Seed  Capital   Private  Companies   -­‐  -­‐  Interna3onal   Private   MARKETS   -­‐   Government   VC  A   Bank  A   Bank  B  &  C   Gov’t   -­‐  Public   Kenya  ICT  Investment  Fund   Targeted  Funding   Market  Funding   ü  Entrepreneurial  funding  and   ü  Tax  and  procurement   ü  IP  rights  and  diplomaSc   GOVERNMENT   educaSonal  support   incenSves  and  legislaSon   commercial  exposure     9  
  • 9. REQUEST  FOR  HELP   ICT IN KENYATHE  KENYAN  ICT  REPRESENTATION  ASKS  ITS  GOVERNMENT  FOR  HELP   SHORT-­‐TERM   MEDIUM-­‐TERM   LONG-­‐TERM   ü  Favorable  government   ü  R&D  legislaSon  development   ü  ICT  focused  tax  incenSves   LEGISLATION   procurement  procedures   ü  IP  legislaSon  development   ü  Contract  legislaSon   ü  Double  TaxaSon  TreaSes   development   ü  Development  of  technology   ü  SubstanSve  government   ü  Development  of  Kenyan  ICT   clusters  that  link  Academia   subsidies  for  HR  capability   standards  and  cerSficaSon   and  Industry  for  R&D   EDUCATION   building   ü  Development  of  ICT  focused   ü  Development  of  technology   ü  Acknowledgement  of   educaSon  at  all  levels   clusters  that  link  Security  &   incubator  insStutes   Industry   ü  Support  in  media  exposure   ü  Acknowledgement  of  ICT   ü  Alignment  ICT  development   ü  Joint  Public/Private   industry  Advisory  Board   COOPERATION   with  Vision  2030   economic  missions  for  ICT   ü  ICT  sector  representaSon  in   ü  Acknowledgement  of  ICT   government   industry  representaSve  body   ü  ICT  industry  investment  fund   ü  Individual/CorporateTax   FUNDING   ü  Government  projects   ü  Public  Private  Partnerships   incenSves  for  investments   10  
  • 10. NEXT  STEPS  AND  TIMELINES   ICT IN KENYACONTINOUSLY  MOVING  FORWARD  WITH  PRECISION  AND  CARE   ACTION   TIMELINES   Ø  Validate  ICT  requests  from   APRIL  2012   government   Ø  Align  ICT  industry  ambiSon  with   APRIL  –  MAY  2012   Vision  2030  AND  Kenya  ICT  Board   PROPOSED   Ø  Partner  with  stakeholders  on  ICT   MAY  –  JULY  2012   NEXT  STEPS   industry  vision  &  approach   Ø  Create  detailed  joint  roadmap,   JULY  –  OCTOBER  2012   acSviSes,  roles  &  responsibiliSes   Ø  Act  on  detailed  roadmap  with   OCTOBER  2012  ONWARDS   focus  on  quick  wins   11  
  • 11. ICT INIndustry  RegulaSon  and  way  forward   KENYAWhich  Significant  Trade  Bodies  exist  currently?    KAM  TESPOK  KEPSA  KIF   Way  Forward    •  To  work  with  KITOS  or  create  another   body   •  MarkeSng  Kenya  for  IT  privately  and   through  public  sector   •  Set  Standards  in  the  sector       •  Document  the  industry   12  
  • 12. CURRENT  KENYAN  ICT  LANDSCAPE   ICT IN KENYATHE  KENYAN  ICT  INDUSTRY  LARGELY  DEPENDS  ON  ENTREPRENEURS  AND  FOREIGN  MNC’s  KENYA  ICT  WORKFORCE  ANALYSIS  *  (in  FTE)   ANALYSIS  Industry   !"#""" Employer  Segmenta?on   Segmenta?on   Industry   REMARKS   10.000   •  The  largest  ICT  market  is  …………..   %#"### $#"### •  Most  of  the  foreign  players  are  in  ………   and  they  are  rapidly  growing   •  Outsourcing  is  a  relaSve  ………….  Market   segment,  although  …………….   ATA   $#"### 10.000   !"### •  The  technology  industry  segment  is  by  far    D TIVESME   MMNC  E/ 5.000  UA UG  –   the  ………..  most  revenue  generaSng,  and   FIC  –   I K MB Government    –       the  ……………….  Is  relaSvely  small    DATATechnology   ConsulSng   Outsourcing   Total   Entrepreneurs   IG I TRY –  T Workforce   EJ/NG Employer   IN DUSKES  mio)   NALYSIS   ADD   •  Over  xx%  of  all  ICT  professionals  work  for   KENYA  ICT  REVENUE  ANALYSIS  (in   Y  A !"#$### D IN USTR ……………..,  where  as  only  xx%  in  ………….   ADD   •  With  over  …………  jobs,  the  government  Industry   Employer   provides  a  solid  base  for  the  industry  Segmenta?on   Segmenta?on   30.000   %!#""" 15.000   Workforce/Revenue  comparison   $"#""" •  The  relaSve  large  workforce  of   $"#""" entrepreneurs  in  comparison  to  the   annual  revenue  implies  low  salaries   !"#""" •  The  MNC  revenue  share  is  relaSvely  high   30.000   considering  its  workforce  and  since  many   of  its  players  are  foreign  implies  a  capital  Technology   ConsulSng   Outsourcing   Total   Entrepreneurs   SME   MNC   Government   drain  for  the  Kenya  ICT  industry   Revenue  *  See  appendix  for  more  details   13  
  • 13. POTENTIAL  ICT  INDUSTRY  IMPACT   ICT IN KENYAICT  DEVELOPMENT  IN  COMPARABLE  LEADERS  SHOW  SIGNIFICANT  GROWTH  POTENTIAL   KENYAN  ICT  POTENTIAL  (in  KES  bln)   REMARKS  140   AssumpKons  130   • Kenyan  avg.  annual  GDP  growth  4%   • ICT  spend  growth  with  6%  from  2012  120   • ICT  spend  comparison  (%  of  GDP):  110      -­‐  South  Africa  15%   Total  GDP  Kenya      -­‐  Singapore  20%   ATA  Comparable  peer  –   • Taking  the  peer  comparison  average,  100      -­‐  xxxxxxx  10%   F ICT IVE  D  LILNa?onal  PCT  UL   the      potenSal  Kenyan  ICT  industry   A LIAN/ I spend   Y  – A  – (12%  of  GDP)   AR T IC  DA 10   I/M should  be  ~12%  of  GDP,  increasing  the   M Current  Kenyan  ICT  Spend   IBOCH CONO 2013   A2014  SIS  2015   –  WA 0   market  with  KES  700  mio  annually   2011   E 2012   ADD   LY 2008   2009   2010   IAL  AN PO TENT Impact   ADD   • Disregarding  efficiency  and   effecSveness  effects  and  assuming   INDUSTRY  POTENTIAL   equal  division  of  increased  revenue   over  naSonal  &  internaSonal  players   GDP  INCREASE:   JOB  CREATION:   the  Kenya  GDP  could  grow  with  an   extra  7%   • Assuming  an  average  daily  ICT  income   KES  700  mio   70.000  FTE   of  KES  5.000,  the  ICT  industry  can   provide  for  70.000  extra  jobs   14  
  • 14. KENYAN  ICT  LANDSCAPE   ICT IN KENYATHE  KENYAN  ICT  LANDSCAPE  ANALYSIS  ON  WORKFORCE  AND  REVENUE   INDUSTRY  ANALYSIS  DETAILS   COMPANIES   Entrepren.   SME   MNC   Total     Type   Examples   -­‐  Sos-­‐/hardware  producers   -­‐  SevenSeas   Workforce   -­‐  System  Integrators   -­‐  Microsos   TECHNOLOGY   -­‐  Service  providers   -­‐  IBM   -­‐  Website  development   -­‐  Safaricom   Revenue   -­‐  ……..   S  –   Entrepren.   SME   N/ D  AVI MNC   EPHETotal   Type   Examples   A   –  ST Y  DAT -­‐  Technology  consultant   -­‐  Accenture   Workforce   TR NDUS -­‐  ……   CONSULTING    I AD D -­‐  ……..   Revenue   Entrepren.   SME   MNC   Total     Type   Examples   -­‐  Infrastructure   -­‐  Microsos   Workforce   -­‐  ApplicaSon  maintenance/   -­‐  IBM   OUTSOURCING   development   -­‐  Safaricom   -­‐  Business  Process  Outs.   -­‐  ……   Revenue   -­‐  ……..   Workforce  in  1.000  FTE)   Revenue  in  mio  KES   15  
  • 15. ICT IN KENYATHANK  YOU!  

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