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NTF III Kenya- Enhancing Export Competitiveness of the IT&ITES Sector in Kenya

  • NTF III Kenya_

    Following a decade of rapid urbanization and strong economic growth, Kenya, also nicknamed “Silicon Savannah”, is home to a growing wave of innovation. As a mark of confidence in Kenya’s potential, Google, Microsoft, IBM and SAP, among other international firms, now have fully fledged offices in the country. Government Plans are ambitious: The Kenyan ICT Board foresees that by 2017, the ICT industry will be making an estimated US$2 billion per annum (about 25% of the current GDP), and that it will have created around 500 new ICT companies and over 50,000 jobs (Kenya ICT Board, 2012).

    When considering Kenya’s unique selling points and stand-out features, two major aspects can be emphasized. Firstly, its worldwide lead in the mobile payment sector (M-Pesa), and secondly, its existing and sophisticated IT hub structures (iHub). The NTF III project aims to assist the Kenyan IT&ITES industry to capitalize on these existing competitive advantages and further enhance the export competitiveness of the IT&ITES sector.

    This project was launched in February 2015, and works directly with 33 selected beneficiary SMEs, as well as with one industry association i.e. the Kenya IT and Outsourcing Services association (KITOS), in order to increase export revenues of the IT&ITES sector, and create jobs.

    This project aims to enhance the export competitiveness of the IT&ITES sector by targeting 4 outputs:

    Export strategy for the IT&ITES sector developed and validated

    Currently, there exists no single export related plan which could guide the sector and provide a road map for the development and expansion in foreign markets. The sector is regarded as an important future growth sector, but a detailed strategic approach towards its development has not yet been elaborated. To address this need, information and data will be collected and subsequently used to develop and validate an inclusive sector strategy together with an operational implementation plan. The objective of this strategy is to provide a framework and operational guidelines for export promotion of the sector. Furthermore, a public-private platform at sector level will be established to ensure more dialogue and stronger cooperation between the government and the private sector.

    Increased export capacity of selected exporting SMEs in the IT&ITES sector

    Export capacities of selected SMEs will be improved in two ways: firstly through the enhancement of their business and marketing capacities and through developing export marketing plans. Secondly, access to finance for IT&ITES SMEs in Kenya will be facilitated.

    Improved capacities of the major sector TSI KITOS in providing IT&ITES sector development support services to enterprises

    The main beneficiary TSI of the project is the Kenyan IT & Outsourcing Society (KITOS). KITOS is Kenya’s IT and Outsourcing Services body and the country’s largest IT sector TSI. Its capacities will be reinforced in the fields of business planning, developing business models and market research and analysis. This involves training on RBM as well as setting up a member portfolio database documenting certifications and export experience of member SMEs. Further, KITOS will receive assistance in its role as an IT-skills certifier. This activity will contribute to setting standards and therefore branding Kenya as a recognized outsourcing destination. ITC will provide added value by assisting KITOS with technical know-how and expertise during the set-up of the certification system.

    Business linkages and technical partnerships/collaborations expanded

    Under this output, the project will build contacts with companies that are interested in outsourcing their services to Kenyan IT&ITES SMEs. These companies will be European and possibly emerging economy buyers, whose country of origin is determined by the sector study developed under output 1. To guarantee successful partnerships, relevant export destinations will be researched at first within the framework of elaborating the sector export strategy under output 1. Then, thirty three Kenyan SMEs with the most potential will be selected and connected to potential client companies through B2B matchmaking activities. In combination with participations in trade fairs, this will result in contracts with new clients for Kenyan SMEs.

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