Kenya and S. Africa’s common ground: Tech and innovation, and why multinationals want a piece of the pie

In the last of our series on how the two regional powerhouses can work together, we highlight how there is big-money interest in technology.

ONE of the sectors in which Kenya and South Africa enjoy some degree of parity — or at least passion — is in information and communication technology. Kenya easily leads the pack in East Africa as a nation supporting tech startups, while South Africa has established and advanced technology providers. 

In pure innovation terms, it could also be argued that Kenya trumps South Africa given its comparative lack of access to capital and the pace at which truly ground-breaking services have thrived. The reasons are probably far less about funding or a nation starved of technology-based services than it is about government policy and an environment that supports technological innovation. 

This view was supported by Safaricom chief executive Bob Collymore at the recent Kenya Trade and Investment Summit during a panel discussion on ICT Innovations in Finance, Retail and Government Sectors. Having worked in both countries, he said Kenya’s business-friendly environment certainly made it an easier market to operate in. 

This, he added, had sparked active interest from global companies and his interactions with leaders of companies like Microsoft showed that they were willing to pump in money to help tech entrepreneurs realise their vision. 

That aside, however, he said that companies in South Africa and Kenya would benefit from greater co-operation. Safaricom, east and central Africa’s largest telco, specifically, was looking at the growing e-commerce opportunity which is an area in which South African firms have already built up considerable expertise. Collymore said he would welcome partnerships with these companies to explore the potential to tap into this growing trend. 

Quite young
Speaking on the opportunity in the enterprise IT sector, founder and chief executive of Business Connexion Kenya Patrick Muthui said that Kenya was now at the place that South Africa was 15 to 20 years ago. This was characterised by the deployment of enterprise systems in government to improve service delivery and key functions such as revenue collection. 

“The other area is enabling local and central government as well as private enterprise by developing home-grown solutions,” he said. “Our economies are quite young in comparison with the Western world, but I think the important message here is the role the technology has played in leap-frogging the way we do business and interact.” 

He added that the bright young minds developing some of these innovative solutions provided larger players such as Business Connexion with a pool of talent that it could tap into to further advance new technologies and ideas. 

Supporting this view was summit delegate Miku Shah, chief executive of Nairobi-based startup, who also sounded a warning to South African investors that Kenya was firmly on the radar of international funders. “A lot of foreigners are looking at entrepreneurs there, and it is an exciting time for foreign investment into Kenya,” he said. 

Pointing out the opportunity for collaboration between Kenya and South Africa, Collymore said that it was not only funding that was required and that partnerships required mentorship as much as they do money. 

Muthui said the same applied in the enterprise space where collaboration and partnership was key to building a better understanding of Kenyan dynamics.  

“If you go back to the first investors into East Africa, there was a huge fallout despite all the fundamentals being [in] place … because of their very aggressive way of doing business. I think one of the significant investments that Safaricom has made is winning the hearts of Kenyans. 

“There is no one formula, but I believe if you understand the country you are going into from a cultural perspective, understand what is important to the people of Kenya and partner with them, it gives you a far better chance of success.”

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