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8/2/2019 Brian Longwe Sector Policy Paper - Big Picture
1/16
ICT INKENYA#140Friday
Sector Policy Paper
ICT INDUSTRY DEVELOPMENT & GOVERNMENT
INCLUSION
Nairobi 3rd April 2012
8/2/2019 Brian Longwe Sector Policy Paper - Big Picture
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ICT INKENYA
2
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ICT INKENYACONTEXTCREATING A SUSTAINABLE ICT INDUSTRY WITHIN KENYA
COMPLICATION
The scattered ICT landscape lacks sufficient structure and organization to attend the market
Kenyan ICT education lacks focus to attend to specific needs for all types of industry players
ICT development lacks vision and support to attract investors
International players see ample opportunity, endangering the local competitive position
SITUATION
The Kenyan ICT industry is immature and suffers from significant international competition
Vision 2030 for Kenya provides a high-level vision for economic development
The Kenyan governmental legislation lacks a clear ICT vision to support development
Planned ICT developments within the Kenyan government offers a large internal market
CHALLENGE
How do we develop a strong ICT industry in Kenya making optimal re-use of existing means?
How do we ensure sustainable development fitting within Vision 2030 for Kenya
How can we align all local/international stakeholders creating a win-win situation for all
INTENTION WE PROPOSE THE FOLLOWING PLAN FOR SYNERGY WITH GOVERNMENT
4
8/2/2019 Brian Longwe Sector Policy Paper - Big Picture
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ICT INKENYAINDUSTRY ANALYSISTHE KENYAN INDUSTRY ASSESSMENT SHOWS CLEAR AREAS FOR ATTENTION
S W
O T5
Strengths Private sector recognises need for better
engagement with Government
Large internal Kenyan market
ICT inclusion in Vision 2030
Recent technological advancement (Fiber)
Ambitious Workforce
Acknowledged innovations/technologies (MPESA)
Threats Growing Kenyan market attracts international ICT
players threatening local ICT companies
Globalization of the ICT industry simplifies
international service delivery to Kenyan
companies
African economic development creates
significant near-shore competition
Established human capital flows to MNCs
Weaknesses Sub-optimal procurement process for local players
Lack of tailored (tax) legislation
Technical education and industry needs misaligned
Limited availability of investments
Lack of governmental ICT representation
Lack of Public Private Partnerships in ICT (PPPs)
Diplomatic services lack focus on ICT opportunities
Opportunities Significant government Investment in ICT
Labor costs provides labor arbitrage potential
Growth of average size of Kenyan companies
Recognized ICT hub developments (incubators)
Intended creation of Konza as ICT ecosystem
Entry of international ICT players (Nokia, IBM)
Creation of EAC provides larger market
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ICT INKENYAINDUSTRY DEVELOPMENT NEEDSA PROVEN ICT INDUSTRY DEVELOPMENT STRUCTURE
6Source: Australian Business Foundation
8/2/2019 Brian Longwe Sector Policy Paper - Big Picture
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ICT INKENYAINDUSTRY COOPERATIONINDUSTRY DEVELOPMENT MUST BRING TOGETHER ALL INDUSTRY STAKEHOLDERS
7
FINANCIAL
MARKETS
GOVERNMENT
PRIVATE
MARKETPLACE
ICT INDUSTRY
PLAYERS
- Projects
- Expertise- Marketplace
- Products & Services
- Skilled workforce
- Experience
- Industry standards
- Representation
- Funding
- Expertise
- Infrastructure
- Confidence
- Projects
- Legislation
- Education
- Tax regulation
Banks
VCs
Investment
funds
Unions
KICTB
Producers
Industry
representatives
Incubators
Universities
End Users Companies
Insurance
E-G-ovt
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ICT INKENYA
GOVERNMENT
ICT INDUSTRY
PLAYERS
PRIVATE
MARKETPLACE
FINANCIAL
MARKETS
RESPONSIBILITY KEY SUCCESS FACTORS
KEY SUCCESS FACTORS
ENSURING COOPERATION FROM ALL STAKEHOLDERS REQUIRES BENEFITS FOR ALL
DELIVER HIGH QUALITY
PRODUCTS AND SERVICE
CREATE A SOLID STREAM
OF ICT WORK
PROVIDE SUSTAINABLE
AND PREDICTABLE
FUNDING
Predictable quality
Solid service delivery methodology
Focused educational curriculum
Strong coach/mentor network
Strong business services support
Public Private Partnerships (PPP)
Governmental incentive structure
Stable entrepreneurial environment
Virtual marketplace environment
Protection of IP Rights
Shared financial risk profile
Aligned exit strategies
Strong partnerships
Public/private investment funding
Governmental taxation stimulus
THROUGHOUT THE
ENTIRE LIFE CYCLE
SUPPORT FROM
INFANCYTO MATURITY
8
SUPPORT AND FACILITATE Long term sustainable vision
Sufficient budget and focus
8/2/2019 Brian Longwe Sector Policy Paper - Big Picture
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ICT INKENYA
GOVERNMENT
ICT INDUSTRY
PLAYERS
PRIVATE
MARKETPLACE
FINANCIAL
MARKETS
ENTREPRENEURS SME MNC
KENYA ICT DEVELOPMENT
FRAMEWORK TO SUPPORT THE KENYAN ICT INDUSTRY PLAYERS ACROsS THE LIFECYCLE
MATURITY LIFE CYCLE
9
Incubation
Supporton product, skill and
business development
Facilities providing workplace,
internet and meeting place
Education on business processes,
-methodologies and -behavior
Business Support
Supporton business advisory and
development
Certification of technical skills and
delivery maturity (Prince II)
Education on industry standards &
methodologies (Lean/SixSigma)
Continuous improvement
Supportby providing a (virtual)
networking environment, an ICT
market place, and
Diplomaticsupport to create
international demand for Kenyan
ICT products, services and skills
VC A Bank B & CBank A Govt
- Banks
- Seed Capital
- Private Companies
- Government
Kenya ICT Investment Fund
- National
- International
- Private
- Public
Market Funding
Kenyan MarketplaceNairobi..
- SME
- MNC
- Govt
+ rest of Kenya
Virtual Marketplace Africa
- Kenya
- Rest of Africa
- Incidental offshore
Global Marketplace
- Konza City
- Kenya
- Continent
- Global
Targeted Funding
Entrepreneurial funding and
educational support
Tax and procurement
incentives and legislation
IP rights and diplomatic
commercial exposure
http://www.google.nl/imgres?imgurl=http://www.scientificamerican.com/media/inline/rethink-the-global-money-supply_1.jpg&imgrefurl=http://www.scientificamerican.com/article.cfm?id=rethink-the-global-money-supply&usg=__rf7rrvwb6FrM2e6BMnFQkywYdVo=&h=320&w=320&sz=48&hl=nl&start=2&zoom=1&tbnid=NhPzITml4KgdPM:&tbnh=118&tbnw=118&ei=k7FdT6vZMYOJ4gSf97zODw&prev=/search?q=financial+world&hl=nl&sa=N&biw=1280&bih=588&gbv=2&tbm=isch&itbs=1http://www.google.nl/imgres?imgurl=http://www.picturesofmoney.org/money-bag.jpg&imgrefurl=http://www.picturesofmoney.org/Money-bag.html&usg=__zypu0XPQRFoyYiXYG-G-NxhpORU=&h=900&w=900&sz=530&hl=nl&start=1&zoom=1&tbnid=SuR0ItzydoKVtM:&tbnh=146&tbnw=146&ei=R6BdT56mC87vsgamneGRDA&prev=/search?q=moneybag&hl=nl&sa=N&biw=1280&bih=588&gbv=2&tbm=isch&itbs=1http://www.google.nl/imgres?imgurl=http://www.picturesofmoney.org/money-bag.jpg&imgrefurl=http://www.picturesofmoney.org/Money-bag.html&usg=__zypu0XPQRFoyYiXYG-G-NxhpORU=&h=900&w=900&sz=530&hl=nl&start=1&zoom=1&tbnid=SuR0ItzydoKVtM:&tbnh=146&tbnw=146&ei=R6BdT56mC87vsgamneGRDA&prev=/search?q=moneybag&hl=nl&sa=N&biw=1280&bih=588&gbv=2&tbm=isch&itbs=1http://www.google.nl/imgres?imgurl=http://www.picturesofmoney.org/money-bag.jpg&imgrefurl=http://www.picturesofmoney.org/Money-bag.html&usg=__zypu0XPQRFoyYiXYG-G-NxhpORU=&h=900&w=900&sz=530&hl=nl&start=1&zoom=1&tbnid=SuR0ItzydoKVtM:&tbnh=146&tbnw=146&ei=R6BdT56mC87vsgamneGRDA&prev=/search?q=moneybag&hl=nl&sa=N&biw=1280&bih=588&gbv=2&tbm=isch&itbs=1http://www.google.nl/imgres?imgurl=http://www.picturesofmoney.org/money-bag.jpg&imgrefurl=http://www.picturesofmoney.org/Money-bag.html&usg=__zypu0XPQRFoyYiXYG-G-NxhpORU=&h=900&w=900&sz=530&hl=nl&start=1&zoom=1&tbnid=SuR0ItzydoKVtM:&tbnh=146&tbnw=146&ei=R6BdT56mC87vsgamneGRDA&prev=/search?q=moneybag&hl=nl&sa=N&biw=1280&bih=588&gbv=2&tbm=isch&itbs=1http://www.google.nl/imgres?imgurl=http://www.picturesofmoney.org/money-bag.jpg&imgrefurl=http://www.picturesofmoney.org/Money-bag.html&usg=__zypu0XPQRFoyYiXYG-G-NxhpORU=&h=900&w=900&sz=530&hl=nl&start=1&zoom=1&tbnid=SuR0ItzydoKVtM:&tbnh=146&tbnw=146&ei=R6BdT56mC87vsgamneGRDA&prev=/search?q=moneybag&hl=nl&sa=N&biw=1280&bih=588&gbv=2&tbm=isch&itbs=18/2/2019 Brian Longwe Sector Policy Paper - Big Picture
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ICT INKENYA
FUNDING
REQUEST FOR HELP
THE KENYAN ICT REPRESENTATION ASKS ITS GOVERNMENT FOR HELP
EDUCATION
LEGISLATION
COOPERATION
SHORT-TERM MEDIUM-TERM LONG-TERM
Favorable government
procurement procedures
Double Taxation Treaties
Substantive government
subsidies for HR capability
building
Acknowledgement of
incubator institutes
Support in media exposure
Alignment ICT development
with Vision 2030
Acknowledgement of ICT
industry representative body
ICT focused tax incentives
IP legislation development
Development of Kenyan ICT
standards and certification
Development of ICT focused
education at all levels
Joint Public/Private
economic missions for ICT
R&D legislation development
Contract legislation
development
Development of technology
clusters that link Academia
and Industry for R&D
Development of technology
clusters that link Security &
Industry
Acknowledgement of ICT
industry Advisory Board
ICT sector representation in
government
10
ICT industry investment fund
Government projects Public Private Partnerships
Individual/CorporateTax
incentives for investments
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ICT INKENYANEXT STEPS AND TIMELINESCONTINOUSLY MOVING FORWARD WITH PRECISION AND CARE
PROPOSED
NEXT STEPS
11
ACTION TIMELINES
APRIL 2012
APRILMAY 2012
MAYJULY 2012
JULYOCTOBER 2012
OCTOBER 2012 ONWARDS
Validate ICT requests from
government
Align ICT industry ambition withVision 2030 AND Kenya ICT Board
Partner with stakeholders on ICT
industry vision & approach
Create detailed joint roadmap,
activities, roles & responsibilities
Act on detailed roadmap with
focus on quick wins
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ICT INKENYAWhich Significant Trade Bodies exist currently?
KAM
TESPOK
KEPSA
KIF
12
Industry Regulation and way forward
Way Forward
To work with KITOS or create another
body Marketing Kenya for IT privately and
through public sector
Set Standards in the sector
Document the industry
8/2/2019 Brian Longwe Sector Policy Paper - Big Picture
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ICT INKENYACURRENT KENYAN ICT LANDSCAPETHE KENYAN ICT INDUSTRY LARGELY DEPENDS ON ENTREPRENEURS AND FOREIGN MNCs
13
5,000
30,000
30,00010,000
50,000
ConsultingTechnology Government
5.000
MNCSME
10.000
EntrepreneursTotal
Workforce
Outsourcing
10.000
REMARKSIndustry The largest ICT market is ..
Most of the foreign players are in
and they are rapidly growing
Outsourcing is a relative . Market
segment, although .
The technology industry segment is by farthe .. most revenue generating, and
the . Is relatively small
Employer
Over xx% of all ICT professionals work for
.., where as only xx% in .
With over jobs, the government
provides a solid base for the industry
Workforce/Revenue comparison
The relative large workforce of
entrepreneurs in comparison to the
annual revenue implies low salaries
The MNC revenue share is relatively high
considering its workforce and since many
of its players are foreign implies a capital
drain for the Kenya ICT industry
KENYA ICT WORKFORCE ANALYSIS * (in FTE)
Industry
Segmentation
Employer
Segmentation
50,000
40,000
35,000
40,000
120,000
Total
Revenue
Outsourcing
30.000
ConsultingTechnology
30.000
GovernmentMNCSMEEntrepreneurs
15.000
KENYA ICT REVENUE ANALYSIS (in KES mio)
Industry
Segmentation
Employer
Segmentation
* See appendix for more details
ANALYSIS
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ICT INKENYAPOTENTIAL ICT INDUSTRY IMPACTICT DEVELOPMENT IN COMPARABLE LEADERS SHOW SIGNIFICANT GROWTH POTENTIAL
14
REMARKS
Assumptions
Kenyan avg. annual GDP growth 4%
ICT spend growth with 6% from 2012
ICT spend comparison (% of GDP):
- South Africa 15%
- Singapore 20%
- xxxxxxx 10% Taking the peer comparison average,
the potential Kenyan ICT industry
should be ~12% of GDP, increasing the
market with KES 700 mio annually
Impact
Disregarding efficiency and
effectiveness effects and assumingequal division of increased revenue
over national & international players
the Kenya GDP could grow with an
extra 7%
Assuming an average daily ICT income
of KES 5.000, the ICT industry can
provide for 70.000 extra jobs
KENYAN ICT POTENTIAL (in KES bln)
2010 201120092008
130
10
110
2012
0
2014 2015
120
2013
100
140
Total GDP Kenya
Current Kenyan ICT Spend
Comparable peerNational ICT spend(12% of GDP)
GDP INCREASE:
INDUSTRY POTENTIAL
JOB CREATION:
KES 700 mio 70.000 FTE
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ICT INKENYAKENYAN ICT LANDSCAPETHE KENYAN ICT LANDSCAPE ANALYSIS ON WORKFORCE AND REVENUE
CONSULTING
TECHNOLOGY
OUTSOURCING
INDUSTRY ANALYSIS DETAILS COMPANIES
Entrepren. SME MNC Total
Workforce
Revenue
Workforce in1.000 FTE) Revenue inmio KES 15
Type Examples
- Soft-/hardware producers
- System Integrators
- Service providers
- Website development
- SevenSeas
- Microsoft
- IBM
- Safaricom
- ..
Entrepren. SME MNC Total
Workforce
Revenue
Type Examples
- Technology consultant - Accenture
-
- ..
Entrepren. SME MNC Total
Workforce
Revenue
Type Examples
- Infrastructure
- Application maintenance/
development
- Business Process Outs.
- Microsoft
- IBM
- Safaricom
-
- ..
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ICT INKENYA
THANK YOU!