Earlier this year when I started researching the African ICT sector I came across an item that caught my attention. Carnegie Mellon University, one of the top ranked schools in the United States and the world, was opening a campus in Rwanda. Like many others the only thing I knew about Rwanda prior to this were the horrible events that took place in 1994.
This news made me want to dig deeper, and on further research I found out that Rwanda has undergone an incredible transformation over the past 18 years. Today, Kigali is one of the cleanest safest cities in Africa, if not the world, and has been ranked the #3 best economy to do business in Sub-Saharan Africa (behind Mauritius and South Africa) in 2012 and again in 2013.
I got an opportunity to come and visit the school to see for myself this week while I was in Kigali and have a chat with Michel Bezy, CMU-R’s Associate Director. Bezy gave me an overview of the university, its mission and some context and insights on the current state of the East African ICT sector. (Bezy, by the way, also maintains a blog at http://brel54.blogspot.com/ which I highly recommend making the time for).
In recent years, the Rwandan government led by President Paul Kagame has taken a strategy of investing heavily in education, especially in sciences and technology. CMU-R was specifically courted by the Rwandan government as part of a 10 year project intended to develop world class science and technology skills in the region. Rwanda also plans to open an ICT park in Kigali by 2015 as part of the country’s long term strategy. Currently CMU-R has 3 permanent local faculty (and 1 remote) and 24 students enrolled in the graduate program. It plans to increase this to 15 and 300 respectively and expand its curriculum to include new fields of study such as Electrical and Computer Engineering within the next 3 years.
CMU is, of course, not the first university from the developed world to open a campus in Africa. But, points out Bezy, while many universities simply transfer the same curricula taught in their home campuses and have it delivered by local or short term visiting professors, CMU expects its faculty to live in Rwanda during their tenure and will relocate them to do so. Hiring as well as student admission criteria are identical to that of its home campus in Pittsburgh, Pennsylvania (as well as the tuition fees) and a degree from CMU-R is equivalent to a degree from CMU in the USA. Although anyone can apply for admission from anywhere in the world, the curriculum is developed in Africa specifically for the African ICT context
CMU-R also offers executive education and works closely with kLab, a Bezy co-founded tech start-up incubator residing on the top floor of the same building. Plans are also in place to establish a dedicated Mobile Technology Research Center as well.
So, why Rwanda?
It seems I was not the first one to ask this question. Bezy explained that it is sometimes difficult at first to convince a top student from Kenya looking for a graduate program to choose Kigali over, say, the UK. “It can be like trying to convince someone to move to Des Moines, Iowa instead of Manhattan.”
But, he points out, the developed world’s ICT market is saturated whereas Rwanda’s (and Africa’s) is essentially virgin territory. Unemployment in the sector is much higher in the developed world than in Rwanda and Rwanda’s economy is growing significantly faster as well (8.8% real GDP growth in 2011 compared to 1%). Combined with the ambitious plans detailed in the Rwandan Government’s Vision 2020 strategy document, Bezy’s is bullish on Rwanda and his case for Kigali is indeed compelling.
A tale of two cities
Nairobi is also competing to become the main regional hub in East Africa, but unlike Kenya, which is investing billions into building a shiny new ICT park in hopes of luring big players in the ICT industry such as Google and Microsoft to Nairobi, Rwanda is taking a more organic approach to its development. “The Silicon Valley came to be through a partnership and close cooperation between a top school (Stanford University), entrepreneurs, and established business. The money came later, and then only after the money was there did the shiny buildings appear.” Likewise, CMU-R is partnering closely with the kLab incubator and the companies operating Rwanda’s current ICT infrastructure, all of which reside in Telecom House, an unassuming 6 story building nestled among the embassies and government ministries near central Kigali.
“Marriott is building a 250 room hotel in Kigali right now and Carnegie Mellon researched the move to Rwanda for 5 years before making the decision to come”, Bezy adds. “Neither of these companies would make such an investment if they did not believe in the future of Rwanda and Kigali.” Sure, there are some downsides, Kigali doesn’t exactly have the most active nightlife and some have labeled the current government as an authoritarian regime. But, Bezy says, these problems are not unique to Rwanda and they are not impediments to the development of its ICT sector.
A tale of two worlds
So what is the difference between the ICT market in Africa and that of the rest of the world? For starters, many established tech companies from the developed world are under pressure by their shareholders to maintain high profits achieved either by charging fat margins for their wares or reducing their costs with massive scale.
This approach has worked well in developed markets where so far there has been enough demand for this and ICT budgets have largely been able to support it, but this is simply not the case in Africa. Google, he recounts, had once considered Rwanda as a site for one of its mega data centers but quickly found that the region could provide neither the power nor the demand needed to utilize that kind of capacity effectively (a topic Bezy recently wrote about in his own blog)
In the developed world, for example, cloud providers compete against the cost of a customer’s legacy ICT infrastructure. Africa is about SMB (Small and Medium Business), however and SMBs in Africa have zero legacy infrastructure – they are starting from scratch. “Here you are competing with pen and paper, and in fact anything which can simply eliminate those manual activities is extremely valuable here. An African SMB might be willing to pay $5 per hour instead of 5 cents in order to avoid the $40-50,000 USD investment needed to procure its own equipment. The economy of scale is simply not needed.”
Mobile technology is also a fundamental difference. In developed markets, mobile is seen as a luxury, but in Africa it is absolutely core. Mobile must be central in everything that is developed if it stands a chance to succeed here. Plus what you make here had better be cheap, making open source software an essential component. This will be a real challenge for the Microsofts and Apples of the world.
So, what needs to be done now?
The infrastructure is already here, Bezy says, now it’s SaaS that needs to be developed. Interfaces must be easy and simple to use in order to bring users aboard who have never used IT or in some cases may even be semi-literate. The scale of big data centers is simply not needed yet as there are simply not enough customers demanding it – and those who are demanding it don’t yet have any data to migrate. The use of mobile money technologies such as M-PESA and MTN Mobile Money must be integrated and absolutely central to any offering as credit cards and corporate accounts are simply not widely in use here. Lot’s of solutions already exist but even existing offerings need to a lot of refinement yet and have a long way to go.
“This is a new paradigm,” Bezy adds, “The legacy infrastructure in the developed world is based on the need to be physically close to your customers. This is no longer necessary, services can be anywhere in the world.” He compares the situation in Africa in 2012 to that of the U.S. in 1982 – a couple of years before Windows and the Macintosh were first introduced to the world. Might we soon be witnessing the same in Africa?