The other ICT ‘hub’ in Nairobi

December 25, 2012 Editor 0

Editor’s Note: Everybody has a pre-conceived notion of what an ICT Hub should be. Chris Foster examines the lesser known ‘hubs’ around Nairobi’s busy CBD – which, for many , serve as the first point of contact with technology.  

By Chris Foster

If you heard such a description you’d I think I was talking about the area around the iHub and its’ neighbours, or one of the suburban business parks where multinationals locate – but no, I’m talking about another vibrant ‘hub’ of ICT activity which is often ignored, even maligned.“A growing ecosystem of interacting businesses; hundreds of ICT entrepreneurs pushing to reach lower income groups; a vibrant centre of regional interaction in ICTs”

I want to talk about the growing ICT and electronics cluster located in central Nairobi – a network of ICT sellers, mobile repairers, low cost PC constructors, internet cafes, ICT business services, media producers and pirate DVD sellers – located in a square mile of downtown streets with it heart on Luthuli Street. When myself and a colleague crudely counted the number of ICT businesses in this area around a year ago there were just under 4000 small ICT businesses, including an estimated 2200 businesses involved in mobile phones and around another 1800 in computer and ICT media-based activities.

Stepping into the labyrinthine backstreets, corridors and exhibitions of this ICT quarter, it is clear that these are not like the ICT businesses that are often discussed, with firms often less well ordered and clearly defined. But don’t let the surface chaos fool you, this is a heart of ICT innovation with an active set of entrepreneurs involved in driving ICT into the hands of low income users in Kenya and the wider region.

Take the mobile phone activities in this area as an example (which I have been researching). On one level is a complex network of informal wholesalers, mobile sellers and repairers who are the first call for millions of customers in Nairobi and beyond, such channels were reported by one large handset firm to supply over 50% of all consumer mobiles in Kenya. The entrepreneurs here are the ones who genuinely understand the lower income user, themselves often coming from such groups, with knowledge of ICT needs, and the products, adaptations and configurations that fits with the daily lives of such ICT users.

Along with this comes significant mobile phone employment, providing ICT-savvy youth with the ability to become involved in the knowledge economy. Sure, some of the low-end jobs are poorly paid, but they can provide potential to grow.

Take Charles*, who is the owner of a mobile repair kiosk in a back street corridor in this area. Whilst he was educated to secondary level, he had no formal electronics education, and began by paying to become an apprentice in another informal repair store in the area. However, over time he has grown, first he became a repair assistant before finally starting his own mobile repair kiosk. His kiosk is popular as he is now renowned for his expertise in fixing the undocumented and unreliable generic mobile phones that other repairers struggle with.

Almost every week he needs to update his expertise, studying schematics online and interacting with other repairs around the world on mobile repair forums in a local internet cafe. Watching the speed and skill that he diagnoses and fixes problem phones is astonishing; he has built an extensive understanding of electronics and the details of mobile phone operation just through this local training and internet discussions.

A Second Dubai

Behind this trading for low income groups, this quarter is also central to another set of interactions related to a regional trade in mobile phone goods. This has grown to a level that some executives I spoke to described Nairobi as on the verge of “becoming a second Dubai”. Firms in this area are the source of huge growth of mobile supply into neighbouring countries in the region, such as Malawi and Somalia, and sellers from Tanzania and Uganda travel into this quarter each day to supply phones for their own markets. Meanwhile such growth as a regional trading hub has meant that Nairobi is one of the first choice locations in Africa for mobile phone firms (both multinational and Chinese-based) to locate, with a growing amount of local research and development emerging.

So what?

So we can say that this network of entrepreneurs serves at least three interesting roles – driving inclusive ICTs, building ICT entrepreneurship and serving as a regional trading hub. For these reasons, it is of value to Kenya and the ICT industry, and should be maintained and nurtured. Yet with its messiness and ‘grey market’ activities such networks are often unfairly characterised by the less savoury and illegal elements, whilst the positive activities of the majority of entrepreneurs are ignored.

Policy and firm strategy decisions made with little consideration can have unexpected effects on such delicate networks of actors, threatening their potential existence. Take the recent mobile phone blocking regulations in Kenya as an example, whilst not the direct intention, in the short-term they are likely to result in a loss of confidence of customers in some of these informal low cost mobile sellers, and this will lead to reductions in the number employed in this quarter.

Such networks also present an opportunity for firms. For large firms focussed on bringing ICTs and services to low income groups, interacting with these entrepreneurs is not an optional component of strategy – just look at how M-Pesa has worked with small agents and Nokia with informal handset sellers – entrepreneurs have been crucial to success of ICTs amongst low income users. Such quarters offer a potential network of distribution of ICTs into low income users – whether you are buying a mobile in a rural area, or a generic PC for your business in Naivasha, likely your product will have been supplied from here.

In addition, the ICT practices and adaptations occurring in such networks are the innovations of the future, waiting to be spotted. Buy the right person a Coke, and you’ll get better insight about innovations for low income users than you will from spending many thousands of dollars on expensive industry research insights!

So, for businesses, policy makers, entrepreneurs, even researchers like myself, I hope that we will more focus on interacting with such alternative ‘hubs’ of ICT activity in the future. This is a network that has so far grown without much attention or support, but it is a fragile one. With more active nurturing and understanding it could grow to become a significant national resource.

*name changed

Chris is a PhD researcher at the University of Manchester, UK. His research work has been looking at Kenya’s ICT sector, particularly focussing on the role of entrepreneurs and innovation in driving ICTs to less affluent users.

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Categories: mLab

Tags: entrepreneurs, hub, ict, Mobile phone, nairobi