The Silicon Savannah, and How It Will Change Development Forever

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A view of the Nairobi skyline, home to many of the entrepreneurs that work in tech hubs and accelerators in the city. April 23. 2015. (Ninara/Flickr CC).

First, there was the Silicon Valley. A bastion of tech innovation, the Valley inspired a host of domestic and international copycats, including but not limited to: Silicon Alley (New York), Silicon Alee (Berlin), Silicon Fen (Cambridge), Silicon Hills (Austin), Silicon Beach (Los Angeles), Chilicon Valley (Santiago), and Silicon Wadi (Tel Aviv). But the newest region to wear the silicon moniker is different from the rest. It is a place where technological innovation stands for something more visceral, more undeveloped and potentially more crucial—the Silicon Savannah. Based out of Nairobi, Kenya, the growth of the Silicon Savannah has been used to symbolize the “rise the Africa.” In reality, the intersection between international development and technological innovation is much more nuanced than that catchphrase.

The term “Silicon Savannah” was first popularized around 2008. This came off the heels of the incredible success of M-Pesa, a mobile banking service introduced by the Kenyan telecom company Safaricom. Since its launch in 2007, M-Pesa has revolutionized the Kenyan banking sector, with more than 75% of the country’s financial transactions handled over the system. Following M-Pesa was the creation of Ushahidi, an internationally acclaimed app allowing citizens to follow outbreaks of violence after the 2007 Kenyan Presidential election. Since then, it has been used as a crowdsourcing tool to alert people about potential riots and police crackdowns occurring in their area.

With the success of M-Pesa and Ushahidi, the Kenyan tech community started to build community spaces – also known as accelerators – where entrepreneurs could freely work. With the introduction of the TEAMS undersea fiber optic cable to the country in 2010, Kenya has rapidly ramped up its broadband speeds. By 2011, it had all the necessary pieces to create a truly vibrant tech atmosphere. The stage was set for a big reveal: The Konza Technology City, a 14 billion dollar “smart city” tech hub located 37 miles outside Nairobi that would be built by the Kenyan Government with American assistance. Like similar projects in South Korea and India, this was a city to be built from scratch, with elements of a sustainable urban infrastructure and a smart grid ingrained within the city itself.

Fast forward to 2015, with the smart city still four years away from completion, and Kenya’s tech entrepreneurs are skeptical about its potential. Though the features Konza promises – including shared data protocols and a 100% renewable energy operation – are inspiring, they don’t fit the basic needs of African entrepreneurs. Rather than a new city, what’s needed is more venture capital. The tech hubs in Nairobi are thriving, with accelerators such as iHub and Nailab churning out innovative entrepreneurs with enough ideas to cover the whole of Eastern Sub-Saharan Africa. However, there is a funding gap in bringing these ideas from the drawing board into reality, and a half-finished smart city is not going to be the solution in the interim.

Kenya is caught in a dilemma. In order to attract international investment, they believe that they need to build this smart city. However, in the meantime, they have to redirect resources and sacrifice the innovation going on right in front of their eyes.

The issues that the Silicon Savannah faces in trying to get international capital illustrate a more general theme: the tech that is being created in Africa is inherently different than the tech being created in more developed countries. Almost all of the growth in Kenya’s information and communication technology sector (ICT) – which has grown to become almost 12% of GDP in 2014 – is based in mobile technology. A perfect example of an “Africa-Specific” start-up is M-Farm, an agricultural tech start-up. M-Farm allows family farms to sell their crops directly on an online marketplace, cutting out the traditionally costly middleman. This is a solution to a problem that is uniquely African; more developed countries typically have agricultural supply chains that take care of that issue. Thus, it is hard for international venture capitalists to justify investment in problems that are directed solely at the third world.

Yet more start-ups like M-Farm are exactly what the Silicon Savannah needs if it plans not to just survive, but to thrive. Kenyan entrepreneurs cannot simply imitate the game plan of aspiring innovators in more developed nations to succeed. They live in a different world, where the hub of ideas, Nairobi, is also the city with the world’s largest slum (Kibera). In order to create a cohesive ecosystem, African governments need to spur tech innovation as well, through instruments such as incubators and matching grants. One potential idea is to create a dedicated social enterprise venture capital fund, with inputs by institutions such as the African Union, the World Bank and various NGOs, that could make up for the lack of mature venture capital in the IT space in Africa.

Why does the situation in Kenya matter? Because it serves as a microcosm from which other African countries can build their own technology. Kenya by itself is important, but it also has the potential to jumpstart an entire revolution in African tech. For example, take the Silicon Lagoon. Based in Lagos, Nigeria, it may be a few years behind Kenya, but its marketplace has inherent advantages. Not only is Nigeria the largest country in Africa in terms of population and GDP, it is also home to a market with large mobile penetration. Hundreds of start-ups are popping up around Lagos, taking advantage of Nigeria’s massive economy to create e-commerce platforms from entertainment and fashion, to shipping and mobile payments. Nigeria is a market big enough that start-ups do not need to focus on international expansion in order to turn a profit—a problem faced by many start-ups based in countries such as Israel.

Consequently, the viability of tech in the Nigerian marketplace offers something more than just pure economic development. As shown by Ushahidi, innovative African-based technologies can be used as tools for localized aid and growth. By eschewing normal conventions and creating solutions that fit distinct Kenyan or Nigerian problems, tech can bridge the gap between economic and developmental interests. In a state like Nigeria, hampered by the terrorism of Boko Haram, endemic corruption and environmental degradation by oil suppliers, this kind of bridge is crucial.

However, in order to reach this potential, a viable venture capital infrastructure needs to be created. This is not just the job of African entrepreneurs; it also falls upon international institutions to help foster this new type of economic build up. This coincides with changing paradigms in the international development community. Rather than just provide material aid to those in need, global civil society is beginning to focus on self-improvement—one way is to help social entrepreneurs create thriving tech ecosystems. African-focused start-ups have the potential to do more than just mimic their American predecessors.  They are proving they can innovate in new ways, and contribute to African development on a level that is flexible, scalable, relevant and uniquely African.

The views expressed by the author do not necessarily reflect those of the Glimpse from the Globe staff, editors or governors.

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About Author

Jeff Levine is an International Relations and Environmental Studies double major at the University of Southern California. He has spent time in China with History professor Brett Sheehan researching the effect of globalization on the margins of Chinese society. In addition, he has conducted research with International Relations Professor Steven Lamy on the impact of climate change in the Arctic. His interests include East Asian political economy, the intersection of environmental scarcity and international business and international development. To that extent, Jeff has visited the Philippines to meet with business leaders and learn about corporate social responsibility in developing nations. In spring 2016, Jeff will study third world politics and other topics at the University of Capetown.

 

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