The Trouble with Konza

By Conrad Akunga
iHub
  Published 28th September 2012
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By Conrad Akunga (cakunga@innova.co.ke)

The Konza Tech City Project is undoubtedly an ambitious project driven by a desire to catapult Kenya to the forefront of a technology renaissance. The idea of a city designed and built with the ethos of fostering a collaborative atmosphere of information technology that serves as a basis for business, research and development and education is truly an idea whose time has come.

However, as a student of history with a keen interest in ancient and modern warfare, I have become cognizant of the fact that most wars are not won by a single epic battle, but a series of small skirmishes. I say this because as an entrepreneur in the ICT sector running a software development company, much as I laud the Konza initiative as a whole, I find that for a small business such as myself with pressing challenges for me here and now, Konza has nothing to offer me.

Perhaps, first, some context.
I co-run a software company specializing in development of financial software and tools for the finance and investment sectors. My clients are banks, fund managers and private equity firms. This is a highly specialized industry requiring a lot of domain knowledge in financial instruments.

My chief competition, I find, is foreign firms, chiefly in Europe and South Africa. These firms tend to be larger firms in terms of staff and capacity. In other words, even before we get out of the gate, I am an underdog.

For local companies, when sourcing software from abroad, support and maintenance becomes a key issue because getting issues resolved requires flying in personal and accommodating them, which means an additional factoring in of costs and delays due to issues such as accommodation, logistics, visas and travel. This is over and above the costs and delays due to feature requests and bug fixes.

So enter Konza.
Konza is about 60km from Nairobi. I am being encouraged to take up space in Konza and move my company operations there.

My first problem is getting to Konza. Currently, my office is a 5 minute drive from my house. Similarly, my staff is at most 30 minutes away from the office. Having us to commute to Konza, in that Mombasa Road traffic, makes no logistical sense.

Konza Now

It is argued that there will be high speed trains to mitigate this. But there is the issue of getting to the terminals. Where will they be? People will still have to commute to them.

There is also the issue of quality of life. Commuting is a long and draining process. I would like to minimize this for myself and for my staff.

My second problem, assuming I have moved my company to Konza, is that my customers are still here. My customers and unlikely to move, and even if they were it would not be to Konza. Physical location is crucial for banks and investment firms. If we were to move, support and maintenance and business development would necessarily take a hit because my support and business development teams have to commute right back to the CBD they left in the morning en route to Konza.

One of the benefits I have over my competition is support is but minutes away. Moving to Konza directly jeopardizes that.

My third problem is that the Konza initiative does not clearly address some soft issues: employee or employer; we are all ultimately human beings with differing levels of actualization

  • One of my team members is doing ACCAs on a part time basis. How will he continue to do this from Konza?
  • For a youngish demographic, there are social considerations that come into play. Young men and women would like to have coffee with their boyfriends and girlfriends at Java. These boyfriends and girlfriends usually are in completely different industries. They would then like to watch an IMAX movie, after which they would like to proceed to a KFC for some chicken. How does Konza address this?Of course the other option is I could always physically move residence to Konza or its immediate environs. This introduces a new set of problems
  • How will I convince my wife to move with me, and be commuting to her job in town? What about her hairdresser? Her shoe shopping? Her girls’ nights out? Her membership in various initiatives like Rotary, etc.
  • What do I do about my children and their school? I want them to go to specific schools with a proven track record and opening a school in Konza will not resolve my concerns.
  • What social price will I pay, given my friends (many of whom are not in IT) will necessarily remain behind? How will I participate in other initiatives I am involved in such as mentoring, iHub, etc.?
In other words Konza as a concept, laudable as it is, depends on the success of many other small initiatives, many of which may not be apparent at first glance and will therefore take a while to properly actualize.

However, as with many things, the world will not wait for you to get your ducks in a row.

We Lack the Luxury of Time
I have no doubt the Government is sincere about Vision 2030, and that Konza will probably eventually work, given enough time.

However what I lack is the luxury of time. This is a dynamic and potentially vicious sector and I cannot be still awaiting developments.

This is why I feel in addition to Konza there are other avenues that the Government can explore with regards to fostering and growing a vibrant ICT sector that can yield results today.

All the poster children for growth like HSBC, Equity, Seven Seas, etc. were at some point small businesses that grew organically.

Personally I feel that a strategy that helps businesses grow right now, that can yield potential results today is a surer bet towards growing all sectors, not just ICT, and will yield development of all cities today - Nairobi, Mombasa, Machakos, Bungoma, Eldoret, etc. and not just Konza in 5+ years.

There are many things that can be done today
  1. The government has embassies and staff in most countries worldwide. By virtue of their being on the ground, the staff is in touch with the political, business and social climates of their assignments. Therefore they are perfect agents to assist me when I decide to do some business development in a foreign country.
  2. There is much talk about the effectiveness, or lack thereof, of tax rebates to stimulate industries. This is indeed debatable. What is not debatable however is that If government told me that it would waive my corporate tax If I demonstrated that I would not pull it out as profits or dividends but ploughed it back into R&D or growth and expansion- I would jump on that opportunity in a heartbeat.
  3. Government could also help me meeting some recurrent costs. Rent for instance. If there was a mechanism where if I could demonstrate product development, business development, implementations and support government would pay, or subsidize my rent, that would help operations.
  4. There has been talk of government giving preferential treatment to local firms when it comes to tendering for government projects. Let it be on records that i am deeply against this, as it unwittingly opens the floodgates for mediocre work to become the norm, sullying the water for all. However, in many tenders there are some conditions with nothing to do to the work being sought like capitalization. These could be relaxed or eliminated so that the playing field becomes narrowed to competition on delivery.
  5. Government could also partner with universities to build software and projects around needs they currently have. I see a lot of wasted potential in 2nd and 4th year university projects. Instead of doing abstract projects, why not have real projects that can be rolled out to serve a purpose? Over and above creating potential businesses and solving problems, students acquire real skills in the development, support and maintenance of systems.
  6. The Government should also lead by example. It is disingenuous to talk of eGovernment, cloud computing, and Kenya being an innovator and that same government has police stations and marriage registries using exercise books for record keeping. We need to walk the talk. Such projects could be done under the auspices of the point above.
  7. Government is talking up a lot of prime real estate in the CBD. Why? That space could be better used by businesses engaged in production. Granted there are ministries and government departments that need to be there for reasons of service delivery but how many are these?

Please note that at no time is government directly disbursing money to the SME. Money tends to corrupt good intentions. In this way abuse of the measures is mitigated against.

There are a host of other measures that I am sure like minded can provide that will lead to robust and sustainable growth across sectors across the country.

Conrad Akunga has worked in the software industry for over 10 years. He is a co founder of Innova Limited, a software company specializing in the development of software and tools for the finance and investments industry.He is also the co-founder of Mzalendo.com, a civic education and governance watchdog portal.He also sits on the Board Of Advisors of the Nairobi iHub.He is also a philosopher, writer and all round good guy

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