The Future of Business is in IT related Areas

This article appeared in the British Airways High Life Magazine of April 2014. The future of business is in IT related areas. I always joke with my students when we ask them to dream about business and guess what kinds of business they come up with Funeral service, Nursery School, a Take away, primary school among others. I have been encouraging them to look at businesses with IT orientation. Looking at this article, there are two major issues;

    a) A group of young people are getting it right. They have gone into IT business. That is where the money is as we move into the information technology economy

    b) Kenya the biggest economy in the region has done it again, besides their industrial base, they are developing an IT base. this is is to whoever is concerned ICT ministry, government planners, universities, this is where the future is. 

Welcome to Silicon Savannah

Whatever you thought about Nairobi. Think again. Kenya’s capital is fast becoming the San Francisco of Africa. Intel, Samsung and HP have set up shop. IBM is opening an innovation centre and now Google’s Eric Schmidt has tipped it for success. Ben Rawlence meets the entrepreneurs turning the country’s lack of infrastructure to everyone’s advantage.

From the outside, the centre of Africa’s digital revolution looks much like the other second-rate shopping malls in the leafy Kilimani suburb of the Kenyan capital, Nairobi. Traffic goes by on the Ngong road from Karen the town named after the author of Out of Africa, Karen Blixen. But inside, the energy is palpable. On the top floor of this glass-and-steel building is a coffee shop with windows on all sides and rows of young people bent over computers, plugged into headphones, their earnest faces lit by the glow of screens. No one is talking and the hush is all the more intimidating for the patter of fingers on laptops.

 This is iHub, a co-working space where tech entrepreneurs are gathering to rent desks by the square inch to be part of a growing movement that is not only inventing new ways of using the internet in Africa but is creating whole new sectors of the economy. The huge opportunities are attracting talent from all over the world and have even led to a new nickname: ‘Silicon Savannah’.

In the café, I meet Ben Lyon, a 26-year old American with a thin beard and intense eyes behind wire spectacles. A generation ago, someone like Lyon might have come to Africa as a volunteer, but after graduating in economics from the University of Memphis, he came to Nairobi to start his own business. He pays for our coffee using technology he has developed called Kopo Kopo that turns his phone into a debit card. He sends all coffee shops till a text message and out pops the receipt.

Kopo Kopo uses the M-Pesa money platform. “Pesa” means money in Swahili and the ‘M’ stands for mobile. It is a Kenyan innovation that evolved from pay-as-you go mobile phones, in effect turning a phone number into a bank account number. Over 40 percent of Kenyan GDP is now transacted on M-Pesa and 80 percent of the population use it. Kopo Kopo aims to turn phones, Lyon says, ‘into the debit card of the poor’. With debit cards out of reach for most people and mobile phone usage in Sub-Saharan Africa expanding at lightening speed, Lyon’s biggest problem is the pace of the company’s growth. He rushes off to attend a Kopo Kopo staff meeting that is spilling out into the corridor.

From the iHub on the top floor, start-ups have cascaded down through the building and out into the Kilimani neighbourhood. There are, of course, computer game developers, online shops and sports website enterprises, but it is the range of start-ups improving real lives that have captured global attention. Apps such as MFarm which supplies market details on harvests by text message, MedAfrica, an app providing health information and database of doctors, and M-Kopa Solar, which sells pay as-you-go solar-power units connected to phones for areas beyond the national grid.

SILICON SAVANNAH NAIROBI	SILICON SAVANNAH CALIFORNIA
Born
Circa 2008	Circa 1953
Workers
10,000	235,000
Companies in Fortune 1000
0	30
Universities
18	33
Venture Capital Raised
$10million (Approx)	$11.2billion
Government Funding
$14 billion	Unknown (but considerable)
Average Rainfall
925mm	389mm
Sunny Days
211	261
Lingua Franca
Swahili, English	English

The common principle at play is what Lyon calls ‘leapfrogging’. What has up until recently been a source of despair the gap between Africa and the rest of the world –Nairobi’s techies see as an enormous opportunity. Technology offers the very real possibility at that a country may not need to industrialise in order to develop, that there can be a light weight, mobile, high-speed route to economic prosperity for the continent. Banking services have already gone ‘straight to mobile’, the domestic energy market is going ‘straight to solar’, and computer storage will likely go ‘straight to cloud’.

‘The potential is huge’, says Nikolai Barnwell, a blond, boyish Danish investor who came to Kenya for ‘love and adventure’ but ended up becoming a partner in venture capital firm and incubator 88mph. ‘The macro trends: population, growth, information, the cost of data… are like a tsunami’.

This is why, last year, Google chairman Eric Schmidt visited five cities in sub-Saharan Africa, but tipped Nairobi as the ‘serious tech hub’ which ‘may become African leader’. In the past few years, companies including Google, Intel, Samsung and HP have established their Africa headquarters here. IBM has just unveiled a new innovation centre and an elite research unit, one of 12 around the world. Dr. Kamal Bhattacharya is the director, who moved here from Berlin attracted by the desire of the tech community ‘to attack the big problems with technology… there is urgency, certain dramatics at play’. Infront of a bank of screens monitoring Nairobi’s main intersections, he described to me his first project towards making Nairobi an ‘intelligent city’ using algorithms to improve the city’s notoriously gridlocked traffic.

Part of Nairobi’s success, according to Phares Kariuki, a quiet 28 year-old programmer who dropped out of a degree in chemical engineering to build Africa’s first supercomputer and to set up angani.co, a cloud computing company, was, initially, precisely this lack of regulation. ‘The tech community here has always been largely self-organizing’, he says. The government supplied undersea cables and left the programmers to it. But now the expanding industry has attracted government attention. On every street it seems trenches are being dug to lay fibre-optic cable. Nairobi is growing at breakneck speed.

In a grand office in City Hall, Nairobi’s mayor, Evans Kidero, a tall former newspaper man with movies-star looks, explains government’s bold plans to nationalize the fibre-optic network, provide every primary school pupil with a laptop and build a new £8.4bn technology city called Konza on the outskirts of the capital. ‘There is something in the air in Nairobi,’ he says, although none of the start-ups I spoke to will commit to relocating to Konza yet.

It is familiar story. Ever since Silicon Valley took off in the 1960s, governments the world over have spent billions trying to replicate it. Most have failed but Nairobi might just do it. What made Silicon Valley different from anywhere else was the culture of sharing between universities, established technology companies and start-ups and a healthy dose of idealism. California during 1960s was a place where scientists believed in the power of innovation to change the world for the better. Nairobi in 2014 has a similar feel.

It might have something to do with the fact that the current boom has its roots in the social upheaval and political violence that followed the 2007 election, coinciding with the arrival of mobile broadband in the country. As the city burned, a small group of bloggers urgently discussed what they could do to help. They came up with an online ‘catastrophe map’ on which they plotted reports of violence sent in by text message. They called the crowd-sourced software Ushahidi, the Swahili word for ‘testimony’. It has since been used to map crisis situations from oil spills in the Gulf of Mexico to floods in Australia and war in Congo. Indicative of the spirit of Nairobi’s tech scene is a woman who was present in those early Ushahidi meetings. 30 years old Jessica Colaco. Colaco went on to become the iHub’s first general manager and now runs iHub Research, an offshoot that does consulting on the shape of the African tech ‘ecosystem’ and the impact of technology on democracy. She is motivated, she says, not by making money but by solving problems. Her ambition is to become an angel investor to help young people. She wants them to learn the importance of culture, good ethics, good communication, good people… it is people that make you what you are.’

For Ben Lyon, this is a large part of what makes Nairobi an exciting place to make a career and it is what is drawing more and more young people to this unlikely technology Mecca. ‘It’s not like trying to find a better way to share a video on social media,’ he says. The revolution in Silicon Savannah is about changing the world. It just might.

By Ben Rawlence  

The software

The dotcom boom at the turn of the millennium was largely fuelled by the ability of consumers to pay online. All of a sudden, a parallel shopping experience was born. Online payment platforms such as paypal were key. Kenya leads the world in mobile money payments. M-Pesa, launched in 2008, basically turned mobile phone credit into cash. Now 30 percent of Kenya’s GDP is transacted through M-Pesa and £1.5bn is held in M-Pesa accounts. Kopo Kopo has devised a platform that allows a mobile phone to be used like a debit card to pay for goods and services.

The meeting point

Stanford University was where scientists, entrepreneurs and venture capitalists came together in the 1950s and 60s in Silicon Valley. Stanford graduates William Hewlett and David Packard founded their computer company in Packard relocated to the new Stanford Industrial Park in 1953. iHub is Nairobi’s main co-working space founded by bloggers turned entrepreneurs with funding from the e-Bay founder Pierre Omidyar and backing from Google, Intel and others. It includes M-Lab, where programmers can test their software and regular networking events are hosted.

The hardware

The two devices that have defined the technology revolution are the laptop and the mobile phone. Smartphones have some respects incorporated the two and can do almost everything that a regular computer can. Devices designed for California, however, where connectivity and power are ever constant, do not always translate to Africa. Enter BRCK, a battery and modem in a tough shell that will provide power and connectivity for up to 20 computers for up to ten hours, automatically switching from Wi-Fi to mobile networks to find the cheapest, most reliable connection. Add a processor and it becomes a powerful, all-weather computer remotely operable from anywhere.

The social network

Facebook is perhaps Silicon Valley’s most famous export, used in every country in the world and worth just over £60bn. Nairobi’s best known product is also social network, used in 128 countries, but isn’t worth a penny. Ushahidi.com is an open-source platform which is not run for profit. An early example of ‘crowd sourcing’, it has been used in situations as diverse as the Gulf of Mexico oil spill, the earthquake in Haiti and the war in Congo. Ushahidi.com

The Guru

 Many of the Godfathers (and mothers) of the Silicon Valley were members of the US counterculture. They were anti-establishment and believed that computer science was about more than making money. Steve Jobs famously said, ‘Technology is nothing. What’s important is that you have faith in people, that they are basically good and smart, and if you give them tools, they will do wonderful things with them.’ Julian Rotich got involved with Ushahidi because she wanted to raise awareness about the election violence of early 2008. She had been living in Chicago but moved back to her hometown of Nairobi to become Ushahidi’s executive director two years later. At 35, she is a mentor to the younger entrepreneurs. A senior TED Fellow and a World Economic Forum Social Entrepreneur of the Year (2011), she is a frequent speaker around the world about technology in Africa. Rotich believes strongly in the importance of culture in business and feels that sustaining ‘the culture of sharing’ is the key to Nairobi’s future success.