Protect local innovations from the giant global tech companies flocking to Kenya

It can no longer be plausible to say that Africa’s tech landscape resembles “magnificent stadiums with no players”, as one commentator once sarcastically described futuristic technological ‘smart cities’ such as Konza in Kenya, Wakanda in Ethiopia and others, that were envisioned for Africa by the McKinsey Global Institute.

Indeed, Africa’s ICT sector is remarkably robust today, and Kenya in particular has rapidly positioned itself as one of the continent’s most important digital business frontiers. As at 2022, Kenya’s tech sector was contributing as much as 9.2 per cent to the country’s GDP.

This is doubtlessly a move in the right direction going by the example set by Israel, an inhospitable conflict-zone, with a seventh of Kenya’s population and a severely limited ‘strategic depth’, but which has nevertheless gone ahead to conjure an economy five times larger than our own.

The success can be traced to the Jewish nation’s cutting-edge information technology sector. In 1998, Newsweek identified Tel Aviv as one of the ten most technologically influential cities in the world. Its electronic integrated circuits (ICs) exports alone rake in billions of dollars.

Already, a large number of highly sophisticated enterprise resource planning (ERP) software seamlessly running huge institutions in Kenya is produced by local software engineers. And of course, the quintessential M-Pesa is mentioned wherever the most cutting-edge mobile money transfer platforms in the world are being discussed. Yet as of now, there is considerable unrealised potential for local innovation, particularly in specialty sectors such as fintech, e-commerce, and aggrotech.

Attracted by Kenya’s vibrant technology market, availability of competent human resource and rising demand for IT solutions, global industry giants such as AWS, Microsoft, and Google have already set food here. AWS is already offering its cloud services in Nairobi to local companies, technology startups and government departments.

Arguably, Konza City, the 5,000-acre innovation hub dubbed the ‘Silicon Savannah’ and situated 60km south of Nairobi represents the biggest evidence of the Kenyan government commitment to development of ICT. Despite its glaring lack a well-focused government support system, the facility has the potential to accommodate world-class research activities.

Equally laudable is President William Ruto’s recent pledge of Sh2 billion in tech funding to support innovation by Kenyan youths. By using these funds to fortify the nation’s innovation systems, Kenya can develop home-grown technology startups that fall nowhere short of international standards.

This brings us to the gist of this article. Depending on where one is standing, the reality of global giants setting their sights on Kenya’s burgeoning digital markets can be a double-edged sword. The absence of concrete local guidelines on how to safeguard investors’ intellectual property, might ultimately benefit foreign firms over local innovators. In other words, we might start seeing a scramble for Kenyan intellectual property by firms that have the financial muscle to gobble up local talent and startups, or even established businesses, for a fraction of their real value.

While a number of players may genuinely seek to bring to us job opportunities and transfer of technology, they nevertheless pose a serious threat to local innovation hubs particularly because of their large pool of financial resources that could be leveraged for local dominance. As such, it is incumbent upon the government to find how it can both open itself up to the world and encourage home-grown talent at the same time.

Luckily, key insights can be gleaned from both India and China, economies that passed through a similar teething phase where they needed to protect their homegrown ideas while creating truly world-class tech firms and a sustainable digital economy. China’s Great Firewall strategy restricted the entrance of foreign conglomerates such as Google, hence letting local Chinese entities such as Alibaba, Tencent, and Huawei to develop. These firms are now dominant in e-commerce, social networking and telecommunications provision. The story of India’s Infosys and Wipro is almost identical.

Kenya could begin by devising policies that cushion local startups, offering legal protection for ideas and innovativeness, and extending tax incentives. The National Innovation Agency could partner with such regional innovation nodes as Konza to ensure that local technology concepts are nurtured, financed, and also taken to market.

Intellectual Property laws should be proactively strengthened to safeguard ideas generated by the Kenyan startups, while government IT contracts should be preferentially offered to local firms rather than, as often happens reflexively, to European, American and Asian entities. Sadly, in our political environment so riddled with corruption, this winning formula is likely to be unpopular for its lack of lucrative returns.

Additionally, foreign firms must be dissuaded form forming ‘dominance’ cartels through energetic enforcement of fair competition policies and public-private partnerships.

We conclude by saying Kenya should aspire to be the owner of the board rather than merely a piece in the international tech game, so to speak. If no efforts are made, the country risks remaining a perennial consumer of other nations’ technological goods.