Kenya’s digital economy needs more than just infrastructure investment. It also needs a well-educated and -trained workforce, as well as policies and regulations that create an environment that is conducive to innovation and Entrepreneurship.
Digital technologies are revolutionising the way businesses operate and interact with customers. They are also changing the very nature of work, and creating new opportunities for businesses to grow and prosper.
However, for Kenya to fully reap the benefits of the digital economy, it must address the challenge of developing a workforce that is equipped with the right skills and knowledge. In addition, policies and regulations must be in place that encourage innovation and support the growth of digital businesses.
Covid-19 has had a dramatic impact on the way businesses operate. In response to the pandemic, many companies have been forced to accelerate their digitisation efforts in order to remain operational. This has meant that companies have had to move their customer and supply-chain interactions online, as well as their internal operations.
According to a McKinsey Global Survey of Executives in October 2020, the pandemic has resulted in a three to four year acceleration in the digitisation of business operations. This has been a challenge for many companies, but it has also presented a number of opportunities. For companies that have been able to successfully adapt to the new digital landscape, there is the potential for increased efficiency and growth.
As a result of the pandemic, the share of digital or digitally enabled products in business portfolios has accelerated by about seven years. This acceleration of digital transformation, often referred to as tech-celeration, is driven by businesses in pursuit of resilience and customers demanding more digital capabilities.
The pandemic has forced businesses to rapidly digitise in order to survive, and customers have become more accustomed to digital channels and expecting more from businesses in terms of digital capabilities. This has created a perfect storm for businesses to invest in digital transformation in order to remain competitive and future-proof.
The challenges for today’s businesses are unprecedented. They are being required to meet new demands much more quickly than before the pandemic hit. This means that technology service providers have to work overtime to ensure that infrastructure capacity is increased, connection speeds are upped, and service performance is optimal. All of this takes a lot of time and effort, and it can be tough to keep up with the changes. However, it is essential to do so in order to stay competitive in today’s market.
As we settle into our “post-pandemic” realities, we can certainly be proud of the digital transformation gains we have made. Businesses have adapted and adopted digital tools and technologies at an unprecedented pace, and this has ushered in a new era of work, study and play that is largely technology-enabled.
Kenya has long been at the forefront of digital transformation in Africa. Its stable infrastructure and security, as well as its excellent performance, have earned it recognition as a leading digital economy in the region.
In recent years, Kenya has made significant strides in expanding its digital footprint, with mobile penetration reaching nearly 90% and internet penetration reaching nearly 60%.
The country has also been a leader in adopting new technologies, such as mobile money and digital ID, which has helped to drive inclusion and economic growth.
The most recent Digital 2022 Global Overview Report from We Are Social and Hootsuite reveals that 42% of Kenya’s population is now connected to the Internet. This important statistic is the result of increased investment in delivering this vital resource to Kenyan households and businesses.
The report goes on to say that the average Kenyan user spends 9 hours and 32 minutes online every day – the second highest figure in Africa behind South Africa. This is an impressive figure, and it highlights the importance that Kenyans place on being connected.
Internet access is becoming increasingly commonplace in Kenyan society, and it is clear that it is playing an increasingly important role. With the government committed to increasing investment in this area, the potential for the Internet to facilitate economic and social development is significant.
However, there are also potential risks associated with increased Internet use, such as cybercrime and the spread of misinformation. It is therefore important to strike a balance between promoting the benefits of the Internet while also mitigating the risks.
This positive development notwithstanding, it is time to shift focus on what has been systemic oversight – driven largely by an almost siloed approach to Internet provision and connectivity – that could easily erode our industry gains and widen the digital gap. The fact is, the current infrastructure is not adequate to meet the needs of a growing population and the ever-increasing demand for bandwidth. What is required is a strategic and coordinated approach to expand and upgrade the network.
There are a number of factors that have contributed to the current state of the Internet in the developed world. One is the lack of a central body responsible for its development and maintenance. Another is the fact that the technology has been allowed to develop largely without regulation.
The digital divide has long been a defining factor of “far-reaching areas” where there is a need for telecommunications and internet providers to invest in infrastructure in order to bring the internet’s advantages to everyone. Recently, in partnership with the PEACE Cable Company, Telkom landed Kenya’s sixth submarine cable into Mombasa. This development has the potential to close the digital divide in Kenya, and bring many more people online.
Innovation in communication infrastructure is critical to achieving digital development. This new cable, PEACE: Pakistan and East Africa Connecting Europe, is 15,000 km long and will provide the most direct connectivity route from Asia and East Africa to Europe and reduce existing communication delays between the continents. The investment in such delivery infrastructure is of strategic importance to Telkom, where we view access to the Internet as a fundamental human right.
It is now a decade since the arrival of the first submarine cable in the country. This critical infrastructure has continued to grow and expand, bringing ever-improving connectivity to Kenyan citizens. However, while this growth is certainly commendable, there is still a long way to go in terms of achieving digital development. In order for the country to truly reap the benefits of this infrastructure, policies and programmes need to be put in place that will ensure its effective utilisation.
The rollout of digital infrastructure is critical to enabling widespread digital adoption, but it is not the only factor. Connectivity and devices are also key components of the puzzle. While Internet infrastructure is an essential element to close the gap, its availability alone does not necessarily translate into the adoption and beneficial use of the resource.
It is therefore time that we looked at the adoption versus availability gap, to disprove that a “zero gap digital divide” is not just an access issue, but an aggregate of many smaller divides, that hinder the delivery of affordable and accessible broadband connectivity for all.
There are a number of factors which often get overlooked when it comes to the global digital landscape. Affordable devices, the digital proficiency of users, the investment environment, as well as the policy and regulatory space are all critical pieces of the puzzle. Without taking all of these factors into account, it is difficult to get a clear picture of the value chain. Each of these nodes plays an important role and needs to be considered in order to get a complete understanding of the digital landscape.
Interestingly, even as we speak of connecting the unconnected, additional data from the GSMA: Mobile Internet Connectivity 2021; sub-Saharan Africa Key Trends, further show that over half a billion people living in areas with a mobile broadband network, are not using mobile Internet, despite substantial increase in mobile broadband coverage since 2014. Which begs the question, who is failing whom?
There could be a number of reasons for this disconnect between mobile broadband coverage and actual usage. For one, many people in rural and/or impoverished areas may not have access to a smartphone or other device that can connect to the Internet. Even if they do have a device, they may not be able to afford a data plan. Additionally, in some areas there may be a lack of infrastructure to support mobile broadband coverage. Even if coverage is available, it may be spotty or slow, making it unusable for many purposes. Finally, some people may simply be unaware of the availability of mobile broadband or how to use it.
It’s no secret that data is becoming increasingly expensive in developed countries. In the United States, for example, the average price of smartphone data has nearly doubled in the last five years. This raises a number of questions: are service providers offering the most affordable data? Are device manufacturers incentivised enough to match this with more affordable entry-level smart devices to enable consumers to enjoy this resource? Or do we look to our policy and legislative framework to help bring further relief to the sector thereby attracting the needed investment and intervention in certain areas? Is there sufficient and engaging content to keep consumers online? Or is there a challenge with respect to the digital literacy of the intended users?
As we reflect on all these scenarios, I look forward to a digital-ready, future-fit economy where simultaneous construction of broadband infrastructure is done alongside key projects to save on costs and distribution. This would allow for increased internet speeds and access, as well as more reliable connectivity overall. Furthermore, by integrating broadband infrastructure into existing infrastructure projects, we can ensure that more people have access to the internet and can take advantage of the many benefits it provides.
The growth of digital literacy programmes should also go beyond formal education and into the job market to enable Kenyans become better digital consumers. According to the Communication Authority of Kenya, only 9.2% of Kenyans have basic digital skills. This number needs to increase in order for the country to remain competitive in the global market. In addition to digital literacy programmes, the introduction of tech legislation that will inspire investor confidence and offer incentives for the introduction of newer technologies to keep pace with market and industrial dynamics, is also needed.