Growing the IT and outsourcing market in East Africa: The role of hubs and incubators

April 15, 2014

Trellis’ Katie Gove has been working on projects in Uganda and Kenya recently which are focused on raising the profiles and the delivery capabilities of the IT and outsourcing markets. There have been substantial infrastructure investments in the region which makes executing and delivery of work a possibility. A particularly interesting element of the developing IT and outsourcing markets is the role that hubs and incubators are playing in developing software, apps, and websites while also building commercialization capacity of the participating start-ups.

Last week in Uganda, Katie met with Hive Colab, Outbox, Mara Foundation and KIBO Foundation, all of which are part of the spectrum of technical capacity development to tech hub to incubator/accelerator. Due to the high mobile penetration and the low PC ownership rates, much of the platform development taking place is on mobile platforms. Typical applications include an app aimed at pregnant women that helps them to track the pregnancy while communicating with a pharmacy; an agriculture sector app managing logistics and supplies that provides a brokerage function helping to harmonize prices among farmers; and an app to order and pay for Kampala’s ubiquitous bodaboda motorcycles subscribed to its service.

Kenya has an even more robust hub/incubator ecosystem including Growth Africa Ltd (GrowthHub), iHub, mLab, NaiLab, 88mph and more. There is notable focus on training and capacity building via these hubs. For example, GrowthHub has an eight-week training program which requires the participating start-up to test business assumptions along with product ideas and vulnerability. 88mph offers several 48 hour bootcamps each with a specific focus, e.g. business models, product design or IPOs. A much looser structure based on four walls and a high-speed connection forms the basis of iHub’s tech hub which serves as a robust meeting place for technologists developing ideas and serving clients.

While average growth rates in East Africa are an encouraging 7-9% annually, the ICT sectors in both Kenya and Uganda are growing at rates of 20-25% annually. With the solid focus on infrastructure and capacity building, the East African region is developing into a strong development and sourcing destination