Nairobi — Although most of Africa still lacks access to high-speed Internet, Kenya's once-neglected technology sector is booming, thanks in part to a growing group of some of the region's most talented software developers.
Mobile phone penetration in East Africa is relatively high but few investors have been willing to put money into local software, and the kind of real-time exchange of information that could make global tech companies successful has been impossible until now.
But all of that is set to change.
The first of three undersea fibre optic cables linking East Africa to the world is expected to be landed by June 2009, and Kenyan entrepreneurs are working hard to build businesses to meet expected demand for inventive products with African users in mind and an eye on global competition.
Investors see potential.
"We're looking for Africa's next Google," said Richard Bell, the chief executive officer of East Africa Capital Partners, a Nairobi-based venture capital group.
The group has created a U.S. $100 million fund with private investors and the United States Overseas Private Investment Corporation (OPIC). "The region itself has real global comparative advantage in ICT (information and communications technology)… We have bet the farm on the fact that East Africa is going to see tremendous growth," said Bell.
Innovative Startups
A number of tech startups have emerged in Kenya's capital, Nairobi, in venues ranging from sparsely-furnished flats in residential neighborhoods to mod fishbowl-style glass and steel office units in some of the city's skyscrapers.
Moses Kemibaro is the business development director at DotSavvy Africa, an established tech firm of the glass and steel variety. DotSavvy has designed web sites for some of Kenya's most prominent banking and financial institutions.
It also created a CD-ROM training course for HIV/Aids health care providers.
"It's groundbreaking because it cuts costs and delivers educational materials to a much larger, life-saving community. They used to fly people out to a conference center or to the coast; it was very costly," Kemibaro said. Now health workers can take the course anywhere in the country, even without an Internet connection, and print out a serialized certificate of completion upon passing.
Timothy Mbugua, chief executive officer at Symbiotic Media, shares a bare flat with a small team of programmers. He is focusing on developing web and mobile products for regional and international markets. His first project, Zunguka, integrates SMS (short message service) and web services, allowing users to connect and send messages for little or no cost, download information, or advertise goods and services via text message.
Most of his company's mobile products are text-based, but Mbugua aims to design sophisticated mobile applications to take advantage of the fast data services anticipated in Kenya next year.
"In Africa, there's still a whole market to cover in terms of voice and SMS," he said. "But for me, 150,000 people with high-end phones provide sufficient reason to develop sophisticated applications."
Steve Mutinda, a recent University of Nairobi graduate, is also focusing on mobile applications. He has created products to help local corporations distribute their products more effectively and developed text-based stock market information services for individual subscribers. He is keen to expand his business regionally.
"Some mass market products, like stock market information services, are valuable outside of Kenya," Mutinda said. "But obviously we're starting with a local target."
International attention
With highly skilled tech professionals and improved infrastructure, outsourcing may soon become big business for Kenya. "In places like India and Eastern Europe… they're getting to a point where there aren't enough skills around to satisfy the increased demand," said Bell. "And East Africa is becoming very attractive to them." At least one outsourcing center, KenCall, has been operating since 2004 and business is growing; KenCall plans to employ 600 Kenyans by October.
In addition to becoming a possible outsourcing hub, Nairobi has begun to attract international attention as a regional innovation center. Google opened an office in the city in September 2007 and recently announced its buyout of Mobile Planet, a Kenyan mobile services company.
As capital pours into the Kenyan ICT sector, Kenyan developers might see more buyouts. Kenyan blogger and chief executive officer at ViRN Instruments, Kahenya Kamunyu, fears such moves will discourage local ownership and creativity.
"I am not anti-Google, but it's destroying our ability to build our own platforms, our own technologies – our own world," he told AllAfrica.
The Kenyan government has expressed a degree of confidence in Kenya's tech sector by creating the official Kenya ICT Board to liaise with the private sector and offer support. Wesley Kiriinya, a Kenyan video game developer, says more government support is necessary. "We need to encourage a culture of innovation," he said. "With every new product there's a period of uncertainty. The sector shouldn't be taxed until it matures, and then it should be taxed responsibly."
Support networks
For now, many Kenyan developers depend on each other for support. Several hundred software developers have banded together through Skunkworks, a technology group that hosts an online discussion forum with occasional real-life meetings.
Eric Osiakwan, executive secretary of the African Internet Service Providers Association (Afrispa), wants to help young software entrepreneurs make their products profitable. "I think one of the big problems in technology… in Africa is how to commercialize products or to commercialize innovation," he said. "I'm involved in an investment company with two other Kenyans. Our main thing is to invest in new ideas and young entrepreneurs and to help them start a business or help them commercialize their product and services."
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The International Telecommunications Union (ITU) has held youth forums. "We encourage young people to come and join us and meet with the decision makers in the public and private sectors and learn more about the new technologies and how it can improve their lives and their communities and their countries," said Sami Al-Basheer, director of the ITU's development bureau.
Another event, BarCamp Africa, will be held at Google's Silicon Valley campus this year. The one-day event, according to its web site, aims to bring people together to "exchange ideas, build connections, re-frame perceptions and catalyze action that leads to positive involvement and mutual benefit between Silicon Valley and the continent of Africa."
But behind all of the excitement and new interest surrounding local entrepreneurship many challenges remain. "It's all very well and fine to know how to develop software and how to drive a computer, but you also need to understand about business and about finance if you expect the venture capitalists to come along and finance you," Bell said. "But at least we now have the capital set aside."
