How Kenya can position itself as innovation hub

Covid-19 has undoubtedly transformed the structure of economies across the world. It has accelerated the pace of automation, e-commerce and the dominance of technology companies. On the other hand, it has challenged and disrupted modus operandi.

Resilience requires proactive and agile leadership. Innovation is at the centre of most successful organisations. Technology, on the other hand, has emerged as key driver of change and innovation.

Kenya enjoys one of the best internet coverage and, generally, technology infrastructure across Africa as well as on a global scale.

The country is also a key source of talent as demonstrated by the wide array of technology companies that have set up their regional bases in Kenya to tap into the talent. This provides the country with a great opportunity to galvanise its position and become a key innovation and technology hub.

Konza Technopolis is a key flagship project of Kenya’s Vision 2030 economic development pillar. It was established with a vision of creating a world-class smart city and an area of innovation. It is expected to serve an important role in Science, Technology and Innovation.

It is designated as a Special Economic Zone (SEZ) that is set to provide unparalleled opportunities to technology companies and innovators.

A SEZ provides several tax incentives among them being reduced corporate income tax rate of 10 percent for the first 10 years and 15 percent thereafter; the supply of goods or taxable services to SEZ’s is zero-rated for VAT purposes and importation of goods and services is exempt from excise duty.

Companies that operate within a SEZ also enjoy investment deduction of 100 percent of capital expenditure on building and machinery in the first year of use in addition to goods which are destined to SEZs being exempt from Import Declaration Fees.

The Fourth Industrial Revolution is set to change the way we live, work, and relate to one another. The scale of the technological revolution and its complexity portend opportunities and risks that countries across the globe grapple with as they attempt to understand its impact on the economic realm.

The rapid increase in access to mobile devices and internet access presents the possibility of massive levels of interconnectedness with billions of people connected by mobile devices which have the unprecedented processing power, storage capacity, and access to knowledge.

Emerging technology such as artificial intelligence, robotics, the Internet of Things, 3D printing, among others are likely to magnify the effects of this new phenomenon. The shift from simple digitisation to innovation based on combinations of technologies has driven companies to reassess their business models.

Kenya has also embraced the concept of innovation hubs with several investors providing innovators spaces where they can explore their ideas and test their ideas.

There is a need to review the tax regime on research and development activities that are at the core of innovation. This will ensure ideas incubated and they are also rolled out globally.