Economics of race in Kenya’s tech sector


We must move to comprehensively reform the technical and vocational educational training institutions and universities. FILE PHOTO | NMG

Kenya's tech sector has grown to become one of the most promising in the economy. Its growth can be attributed to three factors.

First, are the policies and investments (infrastructure and education) the government has put in place over time to deliberately leverage technology to create jobs for the burgeoning youth population. Second, is the country's attractiveness to foreign direct investment from venture capitalists investing in startups in the country. Third, is technology transfer from foreign experts who have been part of the ecosystem largely in the more than 50 tech hubs spread across the country.

However, some people are complaining that non-indigenous races dominate the start-up sector. Race, and in particular the economics of race, is a complex topic to deal with in both developed and developing countries. It has, however, been subject of discussion among the tech community over the past few years.

The issue re-emerged again last week in social media circles.

In my view, it was a logical consequence of the global discourse on economic inequalities among black people. I join those pushing for the removal of systemic racism that gives rise to discrimination and economic inequality.

In our context, part of the startup ecosystem is composed of genuine investors. They obviously have a technological and economic advantage but they are not here to discriminate. They also bring the much needed competition, which makes us better prepared to scale indigenous startups.Our context with respect to startup ecosystem is different all together. We woud be making a grave mistake if we mixed global issues with local ones. Our independence meant that we would have the capacity to deal with systemic inequalities.

In his book ‘‘The Economics of Race in the United States, Brendan O’Flaherty established that one injustice is as a result of another injustice. He argues that eliminating discrimination in the workplace will not equalise earnings as long as educational achievement varies by race and educational achievement will vary by race as long as housing and marriage markets vary by race.

In a similar fashion, eliminating foreigners so that we succeed will not equalise the creativity that we need to be innovative and innovation systems will vary as long as education systems vary. O'Flaherty concluded that no single engine of racial equality in one area of social and economic life is strong enough to pull the entire train by itself.

There are lessons we can learn from some of the newly industrialised economies in Asia. They comprehensively dealt with educational systems. Their citizens went to study in the US, mostly sponsored by their enlightened governments, and to study with a purpose – and returned home and change their countries.

The Korean Advanced Institute for Science and Technology, together with young graduates from the US universities, built the technological giant that South Korea is today.

China did not stand up to the US until it had built a critical mass of engineers. They too had many students in the US. Many of these students attended top universities like Cal Tech, MIT and Stanford. But even more significantly, the Anglo-American participation in the Chinese technological miracle cannot be discounted, as Carl E. Walter and Fraser J.T. Howie clearly show in their book, ‘‘Red Capitalism.’’

The takeaway from China that Africa must emulate is a large single market that can support their products to scale. Africa, for example, must aspire to develop a single digital market to enable local innovations to quickly scale. If we need more change, then we ought to start with systems. To its credit, the Kenyan government is slowly changing the education system to one that is competency based. We must move to comprehensively reform the technical and vocational educational training institutions and universities, and create partnerships with the private sector for planned internships.

Venture capital funds do not invest in the colour of the skin, they invest in good ideas. They have done so in many locally owned startups. Let's not waste time looking at the colour of who owns the startups in Kenya, but seek collaborations to grow our nascent tech ecosystem.

Spend more energy on education and entrepreneurship to fire up our startups. Americans have not complained about the number of Indians in Silicon Valley.