Cities in focus - Nairobi

By 2050, the number of people living in cities will increase by 2.5 billion. Almost 90% of those people will live in either Africa or Asia.

Today, Cairo, Lagos and Kinshasa already have populations well over 10 million, making them mega-cities. Other cities like Johannesburg and Nairobi are following suit. 

Most of Africa’s urbanisation, however, will happen in medium-sized cities. 

The rapid rate of urbanisation presents a unique moment for African cities. If managed well, these cities could be cradles of innovation and opportunities; however, if not, they may face long term development challenges. 

Growing robust tech ecosystems in African cities is essential to driving sustainable, inclusive economic prosperity. Technological innovation is key to enhancing the quality of life and supporting citizens.

New tech hubs are rapidly emerging across Africa, bearing the promise of accelerating and incubating innovation worldwide. There are currently 643 tech hubs in Africa, according to a joint report by Briter Bridges and AfriLabs. Challenge-led innovation is being embraced to create impactful solutions to improve city life. 

Currently, larger cities have more developed, maturing tech ecosystems; however, innovation is dynamically spreading to more cities and regions. Typically as larger city tech ecosystems saturate, we begin to see opportunities span to other areas. This, however, does not have to be the case in Africa. 

According to a report by the International Finance Corporation, we are already seeing local health, agriculture, and energy companies providing solutions that had never existed before, allowing countries to “skip steps in the development ladder” and progress quicker. Moreover, factors such as environmental concerns, entrepreneur-driven innovation and technological spillovers also foster technological diffusion. 

Welcome to our Cities in focus series, where we explore exciting, developing city tech ecosystems.

Today’s city – Nairobi.

 

Nairobi

 

Nairobi, also known as “Silicon Savannah”, is one of the most established tech cities in the East African tech ecosystem. It is also one of the fastest-growing regions on the continent. 

In the last 8 years, Nairobi’s friendly expat and startup policies have attracted young talent from across all Africa, and more recently, from India and China. 

The Kenyan government has played a very active role in supporting ICT growth. As part of Kenya’s Vision 2030 development goals and objectives for wealth and job creation, the government aims to provide citizens and companies with tools and knowledge to transition to innovative digitally-enabled forms of work and to embrace the shared economy. 

In the past decade, many incubators, accelerators and funders have opened offices or been founded in Nairobi, helping entrepreneurs fund their businesses and acquire mentorship. 

Today, Nairobi is home to more than 200 tech startups. Tech conglomerates like Google, IBM and Microsoft have also recognised the city’s potential and established a presence. 

Many entrepreneurs have benefited from local competitions such as Disrupt Africa’s Live Pitch Competition and international ones like Chivas Regal Venture Competition and Hult Prize Challenge. Startups and Scaleups have received funding from the likes of Yamaha, DOEN Foundation, Toyota Tsusho Corporation and DEG Upscaling. 

Local Innovation centres have played an active role in catalysing the growth of Nairobi’s tech communities and bringing ideas to impact. iHub, one of the city’s most prominent tech hubs, was launched in 2013 as the first of its kind. The hub embraced the concept of open innovation by bringing together the tech community, industry, academia, investors and venture capitalists to collaborate and turn ideas into action with the help of an in-house support unit. 

International collaboration between tech ecosystems is essential in knowledge transfer and paves the way for co-creation opportunities. This year, Kenya and Iran formed a new business relationship with the launch of The Iran House of Innovation and Technology (IHIT) in Nairobi. The innovation centre will foster relationships with Iranian companies to secure partnerships and joint ventures and transfer the technology acquired over the years. 

As Nairobi’s tech ecosystem has matured in recent years, the conversation has changed to solving urban infrastructure challenges and working on sustainable solutions to improve city life.

For instance, Nairobi is one of the most congested cities in the world. This is because the city does not have a reliable public transport service, meaning that more people use cars and heavy personal vehicles. An unsustainable number of new cars appear on the roads each year. The local tech company – Data Integrated, funded by Toyota Tsusho, has stepped in to help solve this issue by providing solutions ranging from route optimisation through to digital payment platforms to public services. 

Connected Places Catapult has launched Urban Links Africa, digitally-enabled by us, in African cities, including Nairobi, to bring together African and UK innovators to solve pressing city challenges. The solutions developed will then be piloted in the selected cities to test their efficiency and scale. 

Other cities and regions in Kenya currently struggle to bring local innovations to an international stage. The digital divide between the countryside and rural areas is a barrier to promoting digital entrepreneurship across the country. “We tend to look too much in the urban areas for success stories, and we tend to forget that the majority of us are in the rural areas,” said Catherine Gicheru, Director of the African Women Journalism Project at the International Center for Journalists. However, as increased affordability, internet penetration grows, more and more tech hubs are opening up outside Nairobi. 

Tech hubs in cities and towns like Mombasa, Eldoret and Machakos are emerging across the country. Many young people find Nairobi expensive to live in and seek opportunities in emerging hubs. While some are independent, others operate within the framework of academic institutions. 

As part of Kenya Vision 2030, the government is building a large tech hub, Konza Technopolis. The hub will be located 64km south of Nairobi on the way to the port city of Mombasa. Konza Technopolis will have reliable infrastructure, business-friendly governance systems and will be powered by thriving information, communications and technology. It will have on-site training locals providing IT and call centre services remotely. The goal is for the hub to become a top business process outsourcing hub by 2030. 

It will be exciting to see how relationships between Nairobi, Konza Technopolis and other developing cities evolve. There is a lot of scope for these cities to collaborate to spread prosperity and inclusivity across Kenya’s tech ecosystem. Each city has the opportunity to create unique tech hubs, which can grow at a faster rate than ever before and provide sustainable solutions to solve pressing city challenges.