Creating an Enabling Environment for ICT Growth
By Matunda Nyanchama
Toronto, Ontario, Canada
May 19, 2006
Information Communication Technology (ICT) is both an enabler and an industry by itself. As an enabler, ICTs help create
efficiency, speed and effectiveness to business processes. As an industry, it includes a range of both software and hardware
products, and services that design, build and operate theses products. In the process, the industry employs millions of people
worldwide.
The worldwide ICT market is estimated to be in the range of trillions of dollars with an estimated annual growth of up to 30%. This
market is dominated by North America, Western Europe and Japan with 36%, 28% and 17% market share, respectively. China and
India are fast catching up as are many countries in Asia and South America. Sub-Saharan Africa, except for South Africa, hardly
features in the world map of ICT markets. In fact Africa and the Middle East are estimated to hold a measly 2% of this market.
Elements of the ICT market include telecommunications, Information Technology (IT) services, hardware, software and other
spending related to the use of ICTs. Governments worldwide are among the largest ICT spenders across the world in an effort to
bring efficiencies in delivery of services.
The size of the worldwide ICT market offers significant opportunity for ICT growth in African countries. Tapping into this market
would be a major contributor to economic growth. It is estimated that ICTs constitute up to 10% of the GDP of some established
economies.
ICT growth in developing countries, including sub-Saharan Africa, is fuelled mainly through increased use of mobile telephones.
However, advanced ICT use such as e-commerce and e-government, has yet to take root.
E-commerce allows for online business-to-business and business-to-consumer transactions. E-government allows for efficient
delivery of government services. In fact, most government services (licensing, registration, tax filing, etc.) are key candidates for
online delivery.
There are positive indications of growth in the African ICT market. Telecommunications are leading the way but also there is
substantial awareness and preparedness that has taken place. All African countries have developed and published national ICT
policies. Others are some way into implementation of these policies.
Kenya has recently launched a high-powered initiative for ICT implementation. The country’s ICT leadership envisions creating
hundreds of thousands of ICT-related jobs. It is an ambitious plan, which specifically (though not exclusively) focuses on tapping
the outsourcing market.
In order to be successful, the government and private sector must work to create a suitable environment for ICTs to flourish.
A successful strategy must encompass the creation of a favourable business climate, a sound infrastructure, supportive regulatory
regime, ease of access to capital, matching skills capacity, and a reliable work ethic. On top of these are others like security and
safety. Taken together, these factors would contribute a positive branding of the country as a viable place for ICT business.
The average time required to start a business is an indicator of the national business climate. In Canada it takes an average of 3
days to set up a business. In Kenya, Uganda and Tanzania the figures are 54, 36 and 35 respectively. Clearly there is work for these
governments to do here to speed up the turnaround for business registration. A good approach is to have a one-stop shop for
business registration with all necessary components needed to start a business.
Various skills and skill levels are required to maintain sustainable ICT vitality. Simple use of ICTs requires ICT literacy. Design,
installation and maintenance of ICT infrastructure require advanced technical skills. ICTs require infrastructure that can support the
demands for the creation, transmission and storage of information. This requires skills that can design, install, maintain and
revamp the infrastructure.
The Kenyan education system must develop capacity for production of ICT-literate population that can make use of ICTs. Both
academic and tertiary institutions must invest heavily in advanced ICT skills development. This skilled labour would be a magnet
for companies with outsourcing opportunities.
India’s success outsourcing business is not by accident; its large network of Indian Institutes of Technology (IITs) has produced
some of the most skilled workforce in the world. A few years ago, every third company started in America’s Silicon Valley had
behind it a graduate from one of the IITs.
ICTs advance are rapid, which means that technologies that are at the “bleeding edge” today would be near obsolete in the next
few years. For example, the famous Moore’s law holds that computer processing power doubles every 18 months. Powerful
computers allow for the creation of complex and advanced applications. To utilize and maintain such applications required constant
skills upgrade. In this respect, employer supported continuing education is essential in order to cope with these rapid advances.
The school system must go beyond imparting technical skills to incorporate entrepreneurship, which is essential for turning ideas
into commercial products and services. Management skills are also critical for the successful execution of any venture.
Entrepreneurship and management are necessary, although not a sufficient conditions for commercialization of ideas and
products. Without access to capital, ideas will remain just that: ideas with potential of not ever seeing the light of day.
African countries should learn from the American technology revolution of the 1990s, which would not have happened without
venture capital. This is money from individuals that saw opportunity and potential in technology products and services. They also
understood the risk inherent in backing ideas that had not been tried before but they were willing to take chances.
The dotcom era created a number of millionaires but also caused substantial grief when the bubble burst. Although some
companies failed with the burst, their products and services remain and continue to be part of the ICT milieu.
There is more. A successful ICT strategy needs a legal and regulatory regime that allows for ICTs to flourish.
The government has powers to make the business of ICT attractive. Examples include tax incentives for companies that undertake
to do business of this nature in the country for an agreed period of time. Such agreements would incorporate requirements for
(technical, managerial, entrepreneurial, etc.) skills transfer to local people. Tax incentives can also facilitate access to (say) computers
and infrastructure on which they run.
Legal regimes that allow for speedy dispute resolution contribute to a supportive business climate. Many African (including
Kenyan) judicial systems require substantial amount of work to enable them provide an enabling environment for business to
thrive, specifically on matters of handling dispute resolution. Note that judicial systems, by the nature, are slow. Countries that
have recognized this offer alternative resolution mechanisms such as mediation.
Finally a country must market to the world its competitive advantage to win business. Kenya has been very successful in branding
itself as a tourist destination. The Kenyan game parks and many cultural artefacts have etched the country’s image into many a
tourists’ mind. A similar ICT branding strategy needs to take place. For example, the country has a large English-speaking, skilled
labour pool available at low labour rates. Needed aggressive marketing is necessary and would almost go counter the saying that
chema chachiuza; kibaya chachitembeza.
The world-wide trend in ICT markets is not by accident. Countries that have excelled in tapping ICTs for economic growth lead in
ICT markets have found a way to create such suitable environments. In the process, they have reaped the benefits that come with
ICT enablement.
African countries, including Kenya, need not reinvent the wheel. There are examples world over from which we can learn.
© May 19, 2006 Matunda Nyanchama
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Matunda Nyanchama works as a Delivery Project Executive (Information Security, Identity and Privacy Services) in Global
Technology Services Division at IBM Canada. He is a past President of the Kenyan Community Abroad (KCA) and can be reached
at mnyanchama@aganoconsulting.com or matunda@hotmail.com.
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