I recently told you about the first two legs of our journey to Africa and the critical information we have gleaned about these local markets. Since then we have had a very successful Edge Conference in Las Vegas but I wanted to circle back and tell you about the third and final stop of our trip — Nairobi, Kenya.
Having already seen two very different economies in Western and Southern Africa, we weren’t surprised that Eastern Africa offered yet another completely different view of this vast and rapidly expanding continent – one driven by information and communications technology advances.
We learned for example, that over the last 10 years, information and communications technology has led up to 40 percent of the economic growth in East Africa. In Kenya alone, the IT industry is expected to grow by 11 percent annually. As businesses try to keep up with this growth they are creating an increasing demand for highly skilled professionals and entrepreneurs who can drive the innovation that will help transform the country with Smarter Planet solutions around traffic, power, and water, to name a few.
In Nairobi, the country’s capital, we observed some incredible emerging technologies that are redefining how technology is viewed in developing markets. We also had the chance to meet with more than 15 local clients and 150 Business Partners and sellers. These local participants shared the struggles they are facing to keep up with the demands of today’s IT while meeting the requirements for fast, widespread innovation. Everyone we spoke with was incredibly eager to collaborate to find the solutions that will advance their communities. As we continue our investments in Africa, it will be critical to continue bringing all these players together.
One of the main highlights of our discussions happened when a client at our round table gave a name to a phenomenon we’ve noticed across Africa: ndogo uchimi. In Swahili, this means small economy. Whether it is filling your gas tank with just enough to get to the store, buying a single roll of toilet paper or building the most efficient, cost effective IT system, much of Africa operates on this basic principle of microeconomics. Decisions are made by individuals and small groups based on exactly what they need and exactly what they can afford at any given moment in time.
Understanding these microeconomic realities will be essential if PureSystems is to succeed in Nairobi, or anywhere on the continent. In addition to thinking on a large scale, bringing in insights and expertise from our worldwide organization, we have to be very attentive to understand local and timely business needs so we can better understand their decision making process.
Another observation from our meetings touched on something near and dear to my heart – the start up mentality. Anyone who knows me understands that I like to talk about PureSystems as a start-up because within IBM I truly believe it functions as such. We follow many of the same principles and ride on the same excitement of beginning something new. Many of the clients we met with are also operating as a start-up, bringing a lot of energy and possibility. What I found truly amazing was because of this start up mentality, there are a large number of new projects hoping to leverage technology in ways we’re not yet able to in more developed countries. For example, Kenya has launched M-Pesa, an extremely popular mobile banking system. Reports show that M-Pesa now processes more domestic transactions in Kenya than Western Union does globally, providing mobile banking facilities to more than 70 percent of the country’s adult population.
New technologies like M-Pesa are able to be quickly adopted because there are no other legacy systems or resources that fit the needs of the community. This is a great example of how many countries in Africa are able to skip over the technologies we in developed countries view as necessary and critical and which in many ways keep us from moving forward.
As we continue to engage in Africa, we need to continue to properly identify the needs of the local communities and connect the right players to find the solution. As I discussed in my blog on our visit to Nigeria, we were able to identify the importance of addressing power fluctuations. Nigeria is not alone, 35 of the 54 countries in Africa experience some power issues – no power, poor power, poor maintenance, and brownouts/blackouts.
To try and solve this problem, Roger R. Schmidt, IBM Fellow and Chief Engineer for Data Center Energy Efficiency, came to Nairobi to collaborate with our local IBM team and to install a test solar array in the InnovationCenter that would be able to power a small PureFlex system. This team has already received design proposals from a partner company and once completed, the solution will be available to small businesses and schools throughout Central Africa. Since PureSystems has the ability to withstand the high heat found in many regions of Africa, the additional solution should be able to provide proper cooling year around.
Nairobi is a hub of technology innovation and also a hub for IBM and our many partners. In addition to the recently opened Research Center, during our stay we launched a new IBM Innovation Center (IIC).
The Nairobi IIC joins a worldwide network of 40 others in 33 countries, including Morocco and South Africa. The Center will bring together all the key players for innovation: clients, partners, entrepreneurs, venture capitalists, IT leaders, and community leaders. These groups will team together to form the ideas and solutions that will shape the IT landscape in the future, and play a key role in progress towards the East African community development goals. Roger Schmidt’s collaborative project is one example of what is happening at the Nairobi IIC.
IBM is deeply aligned with Kenya and its communities as we work to build a bridge to the Smarter Planet solutions that can help the country realize its vision of the future. While Nairobi was the final city visit during this quarter, you can expect to hear much more about what PureSystems is doing to build capacity of clients, partners, and IBMers across Africa. Using all that we learned, we are expanding our roadmap to ensure IBM’s African investments are deep and meaningful. The entire team is excited about the opportunities we see in this vibrant and growing economy and we have some great plans, so stay tuned.