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Corporate

State support key to a vibrant local technology sector

President Uhuru Kenyatta during a past tour of iHub in Nairobi. Government backing crucial in IT sector growth. FILE PHOTO | NMG
President Uhuru Kenyatta during a past tour of iHub in Nairobi. Government backing crucial in IT sector growth. FILE PHOTO | NMG 

I have been reading up on the stories of technology companies that have become household names, keen to understand their path to the global marketplace. In this pursuit, I recently stumbled on the story of Boris Nuraliev, who sits at the helm of accounting software and services firm 1C that has quite literally moved the cheese for big-ticket foreign companies in his home country Russia.

It has become the second largest purveyor of enterprise software in the country with annual revenue topping $600 million.

The story of 1C and others is a testament to deliberate government efforts towards driving the uptake of relevant locally built technologies by way of policy and legislation that quite literally has given the firms wings to fly.

A juxtaposition with the Kenyan landscape, even extended into Africa, I realise that there are essentially two barriers to the growth of technology-based companies and it is certainly not a dearth of talent.

Deliberate government support by way of creating a conducive and enabling operating environment coupled with legislation to entrench consumption of locally built services remains to be felt, even with campaigns such as “Buy Kenya, Build Kenya”.

We are still fixated on imports which lead to obvious capital flight and do not contribute to our intellectual property pool in any way.

The second is a lack of consolidated marketplaces.

In the stories that I have followed, it is very clear that it helps to have a large enough market to play in and cut your teeth.

In the case of 1C in Russia, you are looking at a population of 146.5 million, the United States with about 321 million while others like China and India with more than 1.3 billion.

In Africa and at least for tech, we are yet to collapse our markets to gain the benefits of consolidation and single customer views.

The 20-member Common Market for Eastern and Southern Africa formed in 1994 with a mission to “ to achieve sustainable socio-economic progress in all member states through increased co-operation and integration in all fields of development ” and the 15-member Economic Community of West African States established in 1975 to “promote economic integration in all fields of activity of the constituting countries and create a single, large trading bloc through economic co-operation” are yet to deliver on the possibilities of the digital age.

How to overcome both is not clear in my mind, at least not just yet.

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