[4th Gen #8] Conclusion: Modeling Innovation for GESCI in the Kenyan context

Conclusion: Modeling innovation for GESCI in the Kenyan context

By: Hanna Kannelmae

The goal that our group set out with was to suggest a model for a multi-stakeholder HUB  in supporting and promoting digital creative industries in East Africa. Spoiler alert, after conducting our research process, which included an inquiry of “The Sound of the City” project, identifying SWOT analysis points and issues identification on the current situation of Kenya’s innovation ecosystem, and conducting case studies on three African hubs and an impact sourcing center, we certainly achieved an applicable result of numerous  suggestions for the GESCI-AKE team, but did not reach our ambitious goal of producing a consistent and wholesome model.

In this final blog post I will summarise the suggestions that our research group made that in our mind could help when aiming to develop an education and business model with an aim to empower creative media entrepreneurs and liven and diversify the cultural industries in Nairobi, Kenya.

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Keeping in mind the strengths of the Kenya’s innovation ecosystem – a quickly growing economy, regional leadership in incubating innovation, catching the interest of international funders and partners and being a potential market for technology – we are convinced that a digital hub and ventures that grow out of it would have great potential for success in Kenya and/or internationally.

Taking into account the opportunities, weakness and challenges of the Kenya’s innovation ecosystem, we came up with following suggestions which are, in larg part, based on the best practices of already functioning Hubs in the African region, that our team researched.

  • Keeping a very open mind when targeting a broad scope of potential stakeholders to participate in the Hub processes, in order to avoid exclusively targeting and attracting highly educated participants, and only focusing on ICT and mobile innovations while neglecting culture. It would also facilitate creating opportunities for applicants without specific work qualifications.
  • Including end-users in the developing process, in  order to gain insight into consumer behaviour and necessary means for changing it or adapting to it.
  • Providing an “obstruction-conscious learning opportunity”, meaning that although the education in the Hub may be provided for free (if that is the case), for financially challenged participants living in remote or rural areas, there are other factors that might hold them back from engaging in the activities. Among those factors may be transport, housing, food, hygienical and social obstructions.
  • Concentrating on the networking of different stakeholders by creating specific spaces for it, introducing collaborative processes and getting people to organise around purposeful actions. This would facilitate knowledge and experience sharing and the visibility of different stakeholders, which would benefit the overall development of the local ecosystem.
  • A strong cooperation between the Hub and mobile payment platforms and other mobile industry in order to gain knowledge of the local digital market and consumer behavior, increasing investments and offering services which may lead to increased financial sustainability of the Hub.
  • Increasing sustainability with incubation programs, which, by increasing visibility for the projects that are in development, might facilitate finding opportunities for funding and angel investors.
  • Empowering the underpowered, whether it’s the youth, the elderly, the unemployed or handicapped, whether it’s women, gays, lesbians, transgender people, racial, ethnic or religious minorities, a digital hub with focus on culture is a perfect space for silenced voices to regain their dignity and identity. A diverse cultural content will increase the value of the Hub’s products and services, thereby improving its sustainability.

Finally, as we learned when searching for subjects for case studies, iHub has already seized an opportunity to thrive in the Kenyan fertile digital soil. Although some of the recommendations that we assembled, might not apply for iHub, they appear to be a vital platform with potential for growth and success in supporting the development of many local areas of interest, culture among them. Hence a member of our group, Irene, devised a different kind of a concept for GESCI, described as follows:

Even though the Kenyan government is eager to be a part of the new innovation process, it lacks the existing in-house capacity and expertise to enable the development of new technologies. Having provided technical assistance to the Kenyan government on several projects, such as Kenya MoHEST, Kenya NEMA, Kenya MOYAS, GESCI certainly has the expertise and experience in helping the Kenyan government to fulfill its role and potential in the innovation ecosystem. GESCI can become an ultimate umbrella organization brokering among different actors and stakeholders to maximize the public-private-civil society engagement of the innovation ecosystem. This corresponds very well to GESCI’s belief in adopting the whole-system approach in order to achieve maximum impact and maximize the benefits.


[4th Gen #5] Case study: iHub

Case study: iHub

By: Irene Hau

This blog post features a review on a Kenyan innovation hub named iHub, based on the materials collected from iHub’s website and Marchant’s (2015) case study on Kenya’s ICT innovation. The review is concluded with how GESCI can learn from the strengths of iHub and improve on its weaknesses.


Photo by iHub

The genesis of iHub in Kenya was born from the eagerness for a physical innovation space for the growing community of programmers and developers, who felt disjointed in the existing innovation ecosystem. iHub’s mission is to catalyze and grow the Kenyan tech community by connecting different stakeholders, supporting startups, and surfacing valuable information to the community. iHub is now a co-working space for technologists, investors, young entrepreneurs, designers, researchers, and programmers, where companies spring up, products are funded, people get connected, and where innovation thrives.

iHub has an affiliated research center working on knowledge production, which is called iHub Research. In addition to iHub Research, iHub has a number of sustainable initiatives designed to build a Kenyan innovation ecosystem: iHub Consulting, iHub Supercomputing Cluster, and the iHub User Experience (UX) Lab. iHub itself is an incubator operating as a nonprofit organization, but these initiatives are profit-oriented, and their profits are invested back into the development of the co-working space. The partners of iHub include multinational corporations, such as, intel, Microsoft, Nokia, Samsung, and also local companies, for example, Safaricom, Ushahidi, and Zuku. iHub receives financial support from investors and multinational stakeholderes, such as Google, Omidyar Network, Hivos, and the World Bank’s InfoDev program.

Even though iHub does not provide any formal accelerator programs or direct funding for start-ups that use its space, iHub has helped the birth and growth of 50+ companies over the past 3 years. At the beginning, it attracted young computer science students, aspiring entrepreneurs, as well as prospective funders and representatives from some of the multinationals, these actors would cross paths in the halls, or at the many organized networking or training events. iHub attempts to achieve open innovation through the process of combining internal and external ideas as well as internal and external paths to market, in order to advance the development of innovation. The strength of iHub lies in facilitating these kinds of casual encounters, specifically in increasing the geographic proximity between different actors and stakeholders. Therefore, iHub has at times been described as “the unofficial headquarters of Kenya’s tech movement”.


Photo by iHub

The establishment of iHub is seen as a small turning point for the Kenyan tech innovation by multiple stakeholders in the Kenyan innovation ecosystem. The private sector and the civil society did not really work together before the birth of iHub. The ability of iHub to bring people together, to increase the geographic proximity of individual actors, can be a key component that can help increase social proximity among many different actors from very different cognitive positions.

iHub is a role model to those who want to develop sustainable innovation ecosystems. The success of iHub has inspired many African countries to open up offices using the iHub incubation model of co-working spaces. More formal incubators also opened in Kenya afterwards, including the iHub offshoot, m:lab East Africa, and Nailab. GESCI should and could learn from the strengths of iHub in accelerating actors collaborations and proximity, designing and practicing sustainable initiatives, funding methods, to build a multi-stakeholder innovation ecosystem.

In spite of iHub being a successful innovation ecosystem model, it appears to disregard the cultural aspect of investing in education, youth, and gender quality. While iHub mostly focuses on facilitating the development of innovation in a practical way, it neglects to pay attention to a key stakeholder in the ecosystem, which is the development of institutional policy-making. Therefore, GESCI can work on this to create the most suitable innovation ecosystem model for Kenya.

[4th Gen #2] Summarizing the Kenyan Context

The Kenyan Context

by Paivi Lakka

The Republic of Kenya is a country in Eastern Africa, with a total population of 45,941,977 in year 2014. This means that in terms of population, Kenya was the 30th largest country in the entire world. There is an average of 79.2 people for every square kilometer of land, which makes Kenya also rather sparsely populated. The capital city is Nairobi.

Kenya is a presidential representative democratic republic. The President Uhuru Kenyatta is the head of state, the government and a multi-party system. Executive power is exercised by the government.

From the Millennium Development Goals, Kenya has accomplished to reduce child mortality, narrow gender gaps, bring up the level of primary school enrollment and decrease HIV/AIDs. Poverty has decreased from 47 per cent in year 2005 to 34-42 per cent. Nevertheless, problems concerning inequality, poverty, governance and low levels of investment still exist. Al Shabaab, a jihadist militant group based in Somalia pose a security problem around the country and the government is trying to tackle problems concerning especially the insecurity within areas of high poverty levels.

According to the World Bank, Kenya is seen to be one of the fastest growing economies in the Sub-Saharan Africa and the country’s economic growth is estimated to rise from 5,4 per cent to 6-7 per cent in the next couple of years. According to the Kenya overview by the World Bank, the economy of Kenya is one quarter larger than what was estimated a couple of years ago, making it the ninth largest country in Africa by the Gross Domestic Product. The estimate of year 2014 of the Gross Domestic Product (GDP) in Kenya was $54.2 billion and $1,137 per capita.

The reasons behind this trend are the falling oil prices and public investment in infrastructure in energy and railways. According to the World Bank, in order to sustain its competitiveness and economic growth, Kenya has to maintain the country’s business environment.

According to Forbes, the Kenyan economy is still strongly relying on agriculture, but for instance, Information and Communication Technology (ICT) sectors are starting to be considered as more and more important. According to the Freedom House, Freedom on the net 2014 Kenya report, the country had the second highest Internet Gross Domestic Product (IGDPs) in Africa. IGDP measures the Internet’s contribution to a country’s economy.

According to The policy brief of GESCI-AKE collaborative project on living labs, digital evolution is also strongly developing the job market in Kenya. Through the use of ICT, many African economies have become more knowledge-based and the Kenyan capital Nairobi, for instance, is seen as the startup capital of Africa, where several innovation hubs and incubators have been developed in the past couple of years. According to the report on Kenya’s digital entrepreneurship ecosystem (2014), Nairobi has a huge potential to evolve into the predominant hub for digital entrepreneurship in Africa. Several hubs including iHub, Nailab, m:lab East Africa, Savannah Fund, GSMA and many startups already base in the Bishop Magua building, seen as the digital entrepreneurship ecosystem in central Nairobi.

The policy brief of GESCI-AKE project on living labs state that although the innovation environment in Kenya is becoming world known and there is a growing interest for local content among both Kenyan and global audiences, it is still lacking institutional support. Even though ICT is one of the fastest growing sectors and developing markets in the country, it is facing challenges concerning the implementation of actions developing the ICT infrastructure and services.

The government claims to be highly committed to better the ICT infrastructure, so as to improve the country’s economy. According to the policy guidelines of the Ministry of Information, Communication and Technology, the access to ICT services is still deficient in Kenya. The Internet penetration of Kenya has been on the rise, and the rates from 2015 indicate that there are estimated 26 million Internet users in the country, which means over half of the population. According to the online news site CNBC Arfica, the Communications Authority of Kenya (CAK) claims that Internet penetration in Kenya is 52.3 per cent. According to the Freedom house report on Freedom on the net 2014 in Kenya, the actual number of people having access to the Internet are probably lower, due to the evidence that many locals have several subscriptions offered by various providers, in order to exploit offers or to broaden their geographic coverage.

The telecommunication sector has developed successfully in Kenya during the last ten years. According to the policy guidelines of the ICT sector of the Kenyan Ministry of Information, Communication and Technology, there was an estimated 27 million mobile phones accessible for nearly the whole adult population of the country in 2013. The policy brief of GESCI-AKE collaborative project on living labs claims that the mobile phone penetration is around seventy per cent of the population. There is a significant rise of Internet access via phones, and mobile is the primary tool people access digital services and the Internet with. According to the report on Kenya’s digital entrepreneurship ecosystem, 16 million people, around 99 per cent of internet subscribers, accessed the internet with mobile devices in year 2013.

An article by AfricaRenewal explains, how the broadband market has developed in recent years after remarkable investments in network upgrades and installation of four fibre-optic undersea cables, which have augmented the transmission capacity of data, made the connections faster and lowered the prices. Through this cable connection, Kenya became independent from expensive satellite services, and the broadband prices have gone down enabling Internet connection for a bigger part of the population.

The Kenyan mobile money service M-Pesa is the world’s leading electronic cash transfer system operating on mobile platforms. Kenya has an exceptionally advanced mobile payments penetration of around three out of four adults, around 23 people as registered users, claims the report on Kenya’s digital entrepreneurship ecosystem. M-PESA, is now spread across Africa by mobile telecommunications carrier Safaricom, which has helped entrepreneurs in Kenya in the field of tech startups by serving as a technology platform. According to the iHub Community, the implication is that mobile money is helping entrepreneurial activities in the field of technological innovations and startup activities all across the continent.
he report on Kenya’s digital entrepreneurship ecosystem claims that one opportunity to help the tech startups includes the co-operation with mobile operators in order to ease monetary transactions, as well as assistance in finding these startups and using them. So far, only a couple of startups in Kenya have discovered this opportunity, although mobile payments platforms have helped digital entrepreneurs tremendously elsewhere in the world, because they facilitate the acceptance of payments for businesses. The report also notes that Kenya has a need for investors working on early stages of startups, as a remarkable number of startups in the country are self-funded. As these early stages call for taking risk, there seems to be a lack of funding and business angels at the prototype stage of new startups. Only under nine per cent of Kenyan startups were funded by risk capital angels. The study made a comparison with the Silicon valley, where 64 per cent of startups were funded with risk capital. One opportunity would be offering education for potential business angel investors on how to invest in startups as well as to network with each other.

According to the iHub Community, one of the problems is that in sub-Saharan Africa, the universities and colleges train and educate the students for ready jobs in companies that already existed for a while, instead of supporting entrepreneurship and innovations.