ICT Parks

Kenya’s BPO sector cannot succeed without a critical mass of companies at least a handful of which must be of significant size (000s of employees). The Government can fast-track an environment conducive to ICT sector growth by fostering ICT parks - one or more buildings in which there is a full range of services including reliable electrical power, high speed lines, cabling, physical security and so on. GoK has undertaken the creation of one such park in Athi River. Building is expected to commence in July. The park will occupy about 5000 acres of land and is expected to employ over 10,000 people. While a positive undertaking, the park should be considered as part of an overall strategy. Consultant firm Booz Allen Hamilton has reviewed the learning from global experiences and suggests six main levers for the successful development of ICT parks:[1]

• Purpose - This element must be articulated up front as it directly impacts the physical environment, regulatory and legal context, economic focus, level of integration to the national economy, etc. To illustrate, parks can focus on objectives dealing with ICT sector development, attraction of foreign investments and/or retention of domestic investments, and incubation of new business. The purpose of the Athi River Park should be clearly articulated.

• Value Proposition - Central to the success of an ICT park is the definition and enactment of a legal and regulatory framework, provision of adequate infrastructure and facilities, availability of support services, overall quality of life, and location, to name a few. Importantly, the offering of communication-related services such as voice and data telecommunications, managed data services, and media broadcast all play a key role in shaping the value proposition. It would be good to get a blueprint of the park widely circulated showing advantages of businesses being housed there. The government can also make it easy for local or foreign firms to set up operations for example by giving tax incentives to companies, domestic and foreign operating in the park.

• Location - The efficiency, effectiveness, and resulting lifestyle in these parks are important attributes. As a result, ICT parks tend to be located in dedicated areas outside the main city and within a short driving distance. They also tend to be located within a short driving distance from the airport as well as prominent universities. This clearly suits Athi River as a choice location with its distance from Nairobi, Daystar University and Jomo Kenyatta International Airport. Last but not least, Booz Allen suggests the park dedicates 30%-50% of their space to green areas with the objective to create a distinctive and attractive environment.

• Partnership - ICT parks require close links to academic institutions, real estate developers, venture capitals and financial institutions, investment promotion agencies, and national government agencies involved in the ICT sector. To illustrate, and building on the learning of the broader experience of technology parks, nearly 50% of such developments are pursued within university-related premises. It would be prudent for the government to initiate such partnerships in this early stage.

• Funding - ICT parks can be funded primarily through the private sector (e.g., real estate developers, private investors/placement) and government agencies if required. They are self-sustainable financially and can generate attractive returns. In this regard GoK should seek to enter Private Public Partnerships to ensure that there is private sector buy-in.

• Competitive Positioning - ICT parks can define their competitive positioning along three dimensions. Firstly, they need a differentiated positioning vis-à-vis other comparable developments within the same region (e.g., within the Arabian Peninsula, such as the Dubai Media city). Secondly, they need to offer distinctive benefits at a national level, in particular when considering that 50% of the tenants could represent already established institutions. Thirdly, ICT parks can be defined as part of a regional network of parks. Such a 'constellation' of parks aims to create cross-border synergies and complementary products, services, and strengths. The concept of 'constellation' is already into play at a national level with developments such as the Smart Villages in Egypt having planned presences in Giza (Cairo), Mansoura (Cairo), and Alexandria. The Athi River Park should therefore not be seen in isolation but as part of a constellation of parks. Others could be developed in University towns such as Eldoret, Nakuru and Juja.