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Thursday, 24 February 2011 13:40

Opportunities Galore for Investors in the ICT Sector

By Kui Kinyanjui

NAIROBI, Kenya, February 24, 2011 (Business Daily) - A question that is bubbling in the ICT sector at the moment is how to extend the gains made in the sector over the last five years, especially in respect to the growing profile of the ICT start-ups.


For investors in the field, challenges have included finding the right business niche, getting the right talent, and sourcing a suitable funding mix to achieve their goals.


Over the last 18 months, a number of individuals in the sector have come together to find a collaborative means of resolving those issues through groupings like the iHub.


For those who have been enviously eying the gains made in the industry however, the most pressing question has been how do I get in?


A handy new study by the Excelsior Firm in partnership with DFiD, InfoDev, and Hivos has indentified five key areas where opportunities abound for small and medium enterprises in the ICT sector.


First on the list of opportunities for Kenyan ICT start-ups is to get into content development. As more people in the region access applications on computers and smart phones, well designed websites with intuitive, user-friendly interfaces will become increasingly important, particularly as it relates to driving traffic and encouraging the use of e-commerce.


Examples of companies already offering these services include Pamoja Media and Digital Squad in Kenya; and Design Kingdom in Uganda. Businesses can also look at getting into remote delivery of services in the education and healthcare fields.


The report says there is a growing shift from building simpler applications aimed at social networking to those that address technology need in development sectors such as education and healthcare -- so called ICT4D applications.


The third area that ICT investors should look at is the mobile payments chain, where linking mobile payment solutions to commerce will meet increased demand for e-commerce use in the country.


Linking mobile payment systems like M-Pesa with online based e-commerce and trading platforms such as Amazon, iTunes, Facebook (Facebook Credits), and Google Checkout will create enhanced opportunities for e-commerce and commercial application development locally.


The report points to the successes made by Liko Agosta's and his team at Verviant in developing PesaPal in Kenya as one successful attempt to bridge this divide.

In addition, as use of the Internet matures in East Africa, content generation will gain increasing importance.


A personal example of how online content can drive business; recently when I was looking for a venue to host a special occasion I turned to the internet, expecting to find outdated tourist updates.


But after viewing the options on Eatout.co.ke, a simple phone call had a representative source the best deal for my budget -- cutting out hours of walking around and making phone calls.


Using the portal, I was able to use a single source to book my event. The last area that the report tips for success is software development -- where it says Kenyan SMEs can produce cheaper products and products that specifically address local needs, such as applications in local languages.


A few companies have taken the lead in this area -- such as Craft Silicon, Alliance Technologies, and Virtual City. The results of the study also show that several key interventions are required in order to enable SMEs overcome the challenges they face.


Skills Gap


These interventions include the development of a fully connected SME network, filling the skills gap in advanced business and technical knowledge, providing early stage funding to companies, enabling job creation for knowledge workers and upgrading the business environment.


Together these interventions form the components of a potential East African ICT business engine that, if diligently implemented, could boost performance within the ICT sector and support the economic development of the region.


The report says, while focused on East Africa, the lessons elicited are applicable to other developing regions globally.


This is where the importance of the informal networks that are working so well in Kenya like the iHub, come to the fore. More needs to be done to create networked communities, built on trust, that advise, mentor, finance, build skills, and provide community representation. (END/2011)



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