Kenya needs to tap its human capital to generate wealth and reduce poverty

In recent weeks, there has been debate about the mega projects that form an important part of our development goals. The question is not whether Kenya should invest in human capital or build mega projects; Kenya needs both the people and viable projects.

However, we should be wary of projects that are mired in corruption claims and whose benefits are suspect. The idea of spurring economic growth by building a brand-new city is a high risk strategy, especially if it plans to rely on foreign high-tech firms.

The much-cited Silicon Valley emerged organically as a marriage between academia and industry.

Hong Kong blundered in 1999 by trying to create a technology hub to kick-start its economy after the 1997 economic crisis.

From the word go, the project was mired in controversy and accusations of nepotism and cronyism.

Foreign high-tech firms either failed to show up or simply set up customer service offices, which did little to spur innovation.

What does Kenya have to offer to attract such firms? What exactly is Kenya’s competitive advantage to woo companies such as Microsoft, Google, Alibaba, and Facebook to set up innovation centres where highly educated Kenyans can develop new products and create technology firms instead of merely manning customer service hotlines?

The expertise certainly exists. Kenya has invested heavily in human capital formation, where human capital refers to the stock of knowledge, skills, and competencies.

DRAMATIC GULF

Human capital remains latent when people acquire certificates and degrees. It only acquires relevance when applied to productive activities in employment, self-employment, and entrepreneurial activities.

This is where Kenya has failed its population. We churn out graduates, but what are they supposed to do to earn a living? Where are the business parks?

Much has been made of the dramatic gulf between Africa and Asia in the past 50 years. In 1963, Kenya had a GDP per capita of $104, South Korea $142, Sierra Leone $154, Ghana $211, Singapore $472.

Fast forward to 2014. While South Koreans enjoy incomes of $26,000 and Singaporeans $55,000, Kenya made a big song and dance in adjusting its figures from $943 to $1,136, as though a little creative accounting made any difference to the millions living on less than a dollar a day.

We may not have been exactly at par 50 years ago since Asia always enjoyed comparatively high literacy and educational levels, but while South Korea was in the grip of a military dictatorship, Kenya was forging a democracy based on Western-style capitalist ideals. We were free of the yoke of colonialism and the sky was the limit.

So, whichever way you split hairs in computing economic statistics, Kenyans should be very concerned about avoiding past blunders.

CLEAR STRATEGIES

Asian countries did not get to where they are merely by building mega projects. They began with very clear strategies on how to create jobs and alleviate poverty.

They pursued an export-led campaign, extensive employment-creation through a sound manufacturing base, and a commitment to quality products.

Fifty years ago, no one would have imagined that Toyota, Casio, and Samsung would be dominant global brands.

Kenya needs a better mechanism to distribute wealth-creation opportunities across the country through employment and by facilitating a well-educated population to build its own start-ups, be they jua kali or high-tech firms.

Instead of building a city from scratch, it would make more sense to establish industrial corridors in the major towns and to develop partnerships with universities.

Such clusters of excellence would tap into the resources available regionally, based on such fields as agriculture, mining, tourism, and film-making, some mega, some more modest, to start with.

The key feature is their fit with an existing or potential pool of resources, their ability to attract domestic and foreign investment, and their commitment to put human capital to work wherever it is created in the country.

Without visionary leadership and a viable infrastructure that includes good public transport, low energy costs, and security, we will just keep talking.

The writer is a professor of Human Resource Management at Nottingham University and director of the Africa Research Group.