Business model innovation is becoming increasingly important as we look at addressing real world needs using technology. We have in the recent past seen discussions both online and offline about how government can play a better role in creating a conducive atmosphere for local technology companies to prosper. This call for government rethink how it conducts its business when seeking solutions is not without its counter arguments; the strongest being that the local tech sector cannot cry for protection while wanting to compete on the global market place. The technology ecosystem consists of different players but my desire is that we become net producers of exportable value. This is the only way that information technology will match and even surpass agriculture and tourism as the highest revenue earner for the Kenyan economy.
To drive this different opinion home, it may be best to use an example. The concept of co-government investing will look like one of those very obvious things, once its broken down.
Kenya has very real challenges that can be addressed using technology. Africa has those same needs amplified by many factors. This reads as an opportunity for us to build Kenya as the hub of innovation in Africa. Pick a problem with a government component; say the Horticulture Crops Development Authority wants to deploy a system to better manage the farm to fork ecosystem to ensure alignment with new rules and regulations in export market. In the current frame of mind, they would put out a tender and possibly make it international. A foreign firm may get the deal, sit for months developing the platform deliver on time, on budget and then leave.
Well apart from obvious capital flight, here is how it would work out differently. The HCDA would do a local tender and engage the winning bid within a commercial entity set up to develop the platform. They would pay for the development but the intellectual property remains with the commercial entity. With the needs of the HCDA met, the commercial entity would now look to export the solution to other markets that would be facing the same challenges thereby making them net exporters of technology with the attendant revenue generation. What this does for the local tech firm, is that it grows their portfolio and makes them even more attractive for venture capital investment whose caretakers are a rather picky lot. The tech firm could eventually buy out HCDA in the entity that it had created and leave in its wake a local technology firm with an African footprint, revenues to support continued research and development and a war chest to spearhead entry to other world markets where opportunities exist, all the while retaining the IP on the platform built.
Public Private Partnerships are a great way to kick off the co-investing concept. Here’s to hoping that those charged with the responsibility of acquiring solutions in the public sector are willing to undergo a mind shift. Private sector has been ready and waiting for a long time.