Kenya now a premier centre of global tech-innovation

Mr Haiyun Tang does not have the demeanour of a man about to venture into the unknown. However, he is doing just that with his business.

He is calm as he explains why his Silicon Valley-developed technology, virtually untried anywhere else in the world, will take off in the Kenyan market.

His company, Adaptrum, has partnered with Microsoft and British firm Indigo Telecom to roll out high speed Internet in Kenya’s remotest regions by taking advantage of unused segments of television spectrum — referred to as white spaces.

“We will deliver broadband without interfering with existing users. Kenya is the perfect market to commercialise the use of white spaces,” he told Smart Company last week during his third visit to Nairobi. Using white spaces to deliver connectivity is not new. In fact, it has been piloted in the United Kingdom while South Africa has been planning to invest in the technology. However, progress in these developed economies remains mired in industry intrigue and regulatory procedures.

“The rest of the world is still talking and thinking about it. Kenya is actually doing it. We are forging ahead of the globe,” said Indigo Telecom chairman, Mr Peter Henderson.

The near-reckless confidence Mr Tang and Mr Henderson exhibit in the success of this technological innovation in Kenya has become commonplace.

California-based start-ups, New York grown multinationals, and non-governmental bodies are all heading to Kenya, armed with an optimistic outlook and innovations which they want to sell or new ideas that they need to actualise. Kenya appears set to become the launch pad for the region, the continent, and even the globe.

Kenyans have not taken a back seat to the growth of innovations, either. Local technology developers and scientists have come up with products and services that have taken the world by storm. At its fourth anniversary, the Ushahidi platform developed in Kenya has been used in 159 countries.

So why has Kenya become a fertile ground for growing innovations? Most industry players point to the inherent needs that these innovations fill. M-Pesa, for instance, was borne out of the necessity to provide financial services to the unbanked.

“We thank God for giving us many problems so that we can find solutions,” joked Information and Communication permanent secretary Bitange Ndemo during an IBM forum last week.

Government support, especially the patronage of Dr Ndemo, who has been credited with arm-twisting the State to provide greater support for local innovators, also played a key role. The State has rapidly deployed the technological infrastructure, such as the under-sea fibre-optic cables needed to boost innovation.

“A very important element has been the provision of a better telecommunication infrastructure and access to the Internet as well as the elimination of some restrictive policies that we had in the past. This has been coupled with a supportive and even pro-active attitude of the government, thus leading to the creation of a favourable environment for innovation,” said Dr Joseph Sevilla, the director of Strathmore University’s iLab.

However, the need is not unique to Kenya. It could be argued, for instance, that a country like Burundi would have greater need than Kenya. Further, even with government support, a population unwilling to adopt new products would make a poor market.

Kenyans are, however, apparently quick to pick up technology and this is one of the driving forces behind the trend.

“I would attribute the trends we have seen to one word; people. There is an intangible cultural attribute that Kenyans have that drives the creation and adoption of new innovations,” said Safaricom chief executive Bob Collymore.

Cultural acceptance of innovations has been the subject of a large body of research. Sociologists, through the diffusion of innovation theory, argue that the risks, rewards, and consequences associated with a new product, service, or policy could derail or boost its adoption.

Therefore, the rewards of M-Pesa in an unbanked society and Ushahidi during political upheaval outweighed the associated risks and consequences. Some of Kenya’s firsts have not been nearly as fortunate.

Barely two years after the Open Data initiative was launched, Dr Ndemo declared that it had stalled as government agencies remained tight-fisted with their data.

Here, the risks of possibly revealing information that is meant to be classified, the costs of revealing that data, and the consequences, which include greater public scrutiny and perhaps censure, may have outweighed any potential rewards.

What Kenya has piloted

White Space use for Connectivity

The government has partnered with Indigo Telecom, Microsoft, and Silicon Valley startup Adaptrum to roll out high speed Internet to rural areas, leveraging on unused segments of broadcast frequencies — referred to as white spaces.

The project is currently being piloted in Nanyuki and Kalema at local schools and health centres. Indigo Telecom has installed solar-powered masts in both regions and is using them to transmit broadband to surrounding communities through unused broadcast frequencies.

According to Adaptrum chief executive, Mr Haiyun Tang, it is 10 times cheaper to roll out broadband using white spaces than the cellular network. Currently, the services are offered for free as Indigo Telecom develops a viable commercial model. Indigo’s chairman, Mr Peter Henderson, told Smart Company that the Internet service should ideally be provided for no more than Sh100 a week.

This project is essentially bridging the digital divide to the last mile, something that is supposed to be carried out by telecom firms in partnership with the government through the Universal Service Fund (USF).

“USF will never be enough. We need technologies like this to get to the last mile. It is cheaper than using fibre,” said Information and Communication PS Bitange Ndemo.

The use of white spaces for connectivity is set to become increasingly relevant as digital migration frees up more frequency, thereby creating more white spaces.

Using white space for Internet connectivity is not new or unique to Kenya. It has been tried out in the United States and the United Kingdom, although regulations have held it back.

Mobile Money

Kenya’s largest mobile money product by subscription, M-Pesa, was piloted in Afghanistan by Safaricom’s shareholder, Vodacom, in 2007. M-Pesa was developed with a view to improving financial access to people in East Africa.

Since then, mobile money services in Kenya have gathered ground with each operator providing the service. The innovation has also spread beyond Kenya’s borders, with African mobile operators offering similar services.

Mobile money services have also given rise to mobile banking and mobile lending. Both Safaricom and Airtel have launched mobile borrowing platforms.

Last year, Barclays Bank launched its Ping’it money transfer service in Kenya first which allows Barclays customers in the United Kingdom to send money directly to their relatives in Kenya through their mobile phones.

Ecobank will become the latest financial institution to foray into the segment.

M:LAB

In 2011, a consortium that included the University of Nairobi and local technology centre iHub set up M:Lab East Africa. It was established with a view to boosting innovations in low-cost, high value mobile applications. The lab was the first of its kind and was funded with the World Bank InfoDev grant. InfoDev has since gone on to establish similar facilities in Southern Africa and East Asia.

M:Lab has become a birthplace for a number of local mobile applications that hope to take M-Pesa’s success to the next level. These include MedAfrica, an award-winning mHealth application and bookkeeping apps Kopo Kopo and M-Payer.

Climate Innovation Centre (CIC)

This green tech centre at Strathmore University is another InfoDev project that was set up last year. The CIC invests in entrepreneurs developing innovative solutions to climate change.

The CIC is also the first of its kind, with seven more planned across the world.

“We picked Nairobi because the ecosystem was right. The human capital was present. The academic community was supportive, as were the private sector and the government,” said the centre’s director, Ms Mary Njoroge.

Although InfoDev coordinates the CIC’s activities, it was funded with grants from UK aid and the government of Denmark. The centre as of last year had a Sh1.3 billion capital base that will be invested in more than 70 companies developing technological solutions to climate change.

Open Data

In 2011, Kenya became one of 25 countries to globally to pioneer the Open Data Initiative. It became one of the first Third World countries to make government information freely available on one online-based portal.

The Open Data Initiative was supposed to spark off a frenzy in technological innovation that would drive public education and economic development. However, the initiative has failed to meet expectations. Government agencies are still holding on to their data. As of November last year, only 50 applications had been developed using data from the portal.

The Ministry of Information and Communication is currently developing a policy document to oblige government agencies to give up all non-classified information collected using taxpayers’ money.

IBM Research Lab

Nairobi is set to become home to one of only 12 IBM research labs as the American multinational looks to increase its footprint in the African region.

The facility currently being constructed at the Catholic University of East Africa will leverage on IBM’s technology and data analytics to develop products and services that are expected to solve some of the region’s problems while remaining commercially viable. IBM has said it will recruit qualified scientists regionally.

Ushahidi

The seed for this platform was planted during the post-election violence in Kenya. A group of local developers and bloggers in 2008 created the Ushahidi to collect eye-witness accounts of the crisis and to map incidents of violence. Ushahidi maps crises using a combination of Google’s mapping tools and crowd-sourced information.

Currently, Ushahidi has been used in 159 countries, been deployed 40,000 times, and has been translated into 39 languages. Ushahidi set the ball rolling for the revolution in Kenya’s mobile app development. The Ushahidi team was instrumental in setting up the iHub in Nairobi using part of a grant it received from an NGO.

Microsoft’s Huawei Phone

When Microsoft decided to break with tradition, it did so in seven African countries, including Kenya. After years of loyalty to mobile maker Nokia, the software colossus partnered with Huawei to develop a phone designed exclusively for the African market. If successful in Kenya and the other pilot markets, the phone will be rolled out to the rest of the continent.

The Huawei 4Afrika uses the Windows 8 operating system and will provide users access to localised mobile apps stores.