IoT can expand Kenya’s economy by 250% by 2025

What would you do if you were thrown into a pull of notes worth Kshs. 1.3 quadrillion? The same can be written as Kshs 1,300,000,000,000,000 – or US $14.4 trillion. It is an amount that if you were to earn Kshs. 1 billion per day, it will take you 3,561 years to make. That is, if it were some Donar Fund to Kenya, it would run our economy for 812 years! That’s the amount IoT is promising the global economy by 2025.

IoT is a new market that is already spurring growth in the developed world. You, a non-tech savvy person, might not get into this market directly, but your country Kenya, if she proactively plans to be a major player, can help you get a slice, even if that slice is a mere Kshs 250K a month; that is, a 250 percent increase on your per capita income, or from a national perspective, a 250 percent increase on the country’s GDP. For Kenya to realize a total of 250 percent economic growth, she must reap at least one percent the value of IoT in the next ten years.

How can we have a developed IoT in Kenya?

The problem with Kenya is that as at now we stand at a greatly disadvantaged starting point. Countries that will hugely reap from the IoT global market are those that have already connected their human population to the Internet at a penetration rate close to 100%. The top five countries that have achieved something close to that are Falkland Islands, Iceland, Norway, Sweden and Netherlands. By 2013, Kenya stood at position 129 in the list of countries by Internet Penetration with a 32.1% Internet Penetration rate, but the figure has since changed to more than 37% as over 16.4 million out of 44 million Kenyans are currently subscribed to the Internet. By Internet access, Kenya can be thought of has having 59% Internet Penetration.

Even though the number of Internet subscribers has increased significantly over the recent years, the quality of Internet Kenyans are subscribed to does not allow for a remarkable growth of IoT locally. It is not just subscription to the Internet that matters, but cost, reliability, and speed also play a great role in the development and growth of IoT. As the available Internet to 99% of Kenyans is the bundled data meant for mobile phones, an ordinary Kenyan cannot be able to add fridges, TVs, Radios, doors, windows, CCTV cameras, cars, light bulbs, printers, packaged foods, and numerous other household and office equipment to the Internet. As a first step to develop Internet of Things in Kenya, Kenya must work to increase Internet Penetration, decrease the cost, and provide quality high speed unlimited Internet that is reliable 24/7.

As Kenya scratches her head on how to rethink Internet Penetration in the country as a tool for taking advantage of the IoT’s market value, she should also focus energy on routes she can use to access other opportunities offered by IoT. Some of these other opportunities are highlighted below.

Create Data Centres – Are their data centers in Kenya that offer basic services like web hosting? Each and every website that I know of is hosted in US or Europe. A discussion I had with Kachwanya concluded that no one is willing to run data centres in Kenya due to huge operation costs. Data Centres require reliable and quality electricity, friendly tax regime, and low labour cost. For big multinationals or Startups to setup their server warehouses in the country, the cost of bringing in the huge servers and related infrastructure must be friendly (relaxed tax on ICT equipment and infrastructure), they must be assured of continuous supply of affordable power by entities like Kenya Power, and maintenance cost must be reasonably low (access to spares and maintenance labour). The fact that we hardly have data centres in the country means these initial setup conditions are not available.

Despite lack of suitable conditions, now is the time to setup these data centres in Kenya as their global demand is set to sky rocket in the next two years. According to a forecast by IDC released two days ago, “between 2014 and 2017, IoT workloads will increase by approximately 750 percent”. “Equal, or even greater, investments in the IoT platform services residing in the datacenter will be instrumental in delivering the IoT promise of anytime, anywhere, anyhow connectivity and context,” said Rick Villars, vice president of IDC’s Datacenter and Cloud research practice, in a statement, and as Datamation concludes from the report, “IoT will spur the deployment of new server and storage capacity at the edge” and “Hyperscale data centers that can crunch IoT analytics data will emerge”.

If Kenya proactively works to attract big data centre players or encourage existing ISPs like Access Kenya, Safaricom and Zuku to setup reliable and affordable data centres in the country right now, then she shall have put a huge step forward in getting her deserved slice of Internet of Things market.

Start and Accelerate research on IoT related security threats – Internet of Things is coming with huge security risks that hackers will exploit. The exponential growth of increased attack vectors (both in terms of type of data generated and the variety of things that will be connected to the Internet) will give attackers an easy way to penetrate to networked data. The security risks will be compounded by what Scott Harrell of CIO refers to as forgotten assets. These are things that shall be been tagged by technologies like RFID to allow for Internet connectivity, but given that they have “expired” hence are no longer tracked, will act as launch points or gateways for attackers to penetrate private networks and the Internet.

The huge security risks will also create huge demand for security solutions. It is up to Kenya to encourage the tech community to start working on potential security solutions that will be unique in local setups, or even come with solutions that can be exported elsewhere. The enormous amount of risks that IoT offers means every cybersecurity expert or beginner has an opportunity to contribute to the new market.

Plant the seed for generating new Startups centred on IoT – many IoT Startups are already springing up to offer solutions in areas such as data management and filtering (e.g. by Neura), standardizing connectivity between different types of IoT devices and their unique connection requirements (e.g. by Octoblu), real time data monitoring generated by IoT devices (e.g. by TempoIQ), managing access to some IoT devices like how to open doors using facial recognition software (e.g. by Chui) and expansion of what can actually be thought of as part of IoT (e.g. by Scanalytics).

The field of IoT is still green and what the tech minded gurus can do within the field is as wide as imagination can allow. Integration of mobile money and other cashless payment methods with Internet of Things is an example of an area to direct thoughts to. Kenya ought to realize the massive opportunities and provide the young tech gifted developers with an environment where they can develop products and services that will satisfied the unique but huge demand to be generated by IoT.

Most Startups in the country flourish via funding from donor countries. However, according to Kachwanya, our Startups will be established in a firm foundation once local entrepreneurs start funding the Startups. As an opinion, he says that the President can take a lead by funding one or two Startups, and once his buddies see the fruits of such ventures, they too will follow suit.

We need Kenyan billionaires like Atwoli, Kirubi and Mwangi of Equity to seriously venture into Startup funding. If these billionaires can organize programmes similar to Shark Tank in order to identify Startups that are of interest to them, then the creativity of Kenyans can be spiked not only in the usual economic sectors but also around this new but huge market of IoT.

Create a policy framework and master plan where all these fit in – Most projects in Kenya do not pick up beyond news paper announcement and the laying of foundation stones due to lack of policy frameworks and executable master plans. Although as in independent sector ICT has existed for years, it is only recently that Kenya came up with an ICT master plan to spearhead its development. In the ICT master plan, it is not mentioned what the country plans to do about IoT.

IoT being a huge sector on its own right, a serious country must develop a master plan for reaping its benefits. In the UK for instance, “Prime Minister David Cameron announced [in March 2014] an additional £45m funding for the development of internet of things (IoT) ]”. “This [took] the government funding for IoT technology to £73m as part of efforts to make the UK a world leader in digital technology” reported the Computer Weekly.

Around the time UK increased its funding for IoT, the government of South Korea “came up with an IoT development master plan for developing IoT services and products through setting up an open IoT ecosystem consisting of service, platform, network, device and IT security sectors, as well as collaboration among enterprises of varying sizes and in various industries”, reported Digitimes. South Korea’s master plan was set with an ambition to “increase the South Korea market value for the Internet of Things (IoT) from KRW2.3 trillion in 2013 to KRW30 trillion (US$28.9 billion) in 2020, much larger than Machina Research and Stracorp’s projected five-fold growth in global IoT market value from US$200 billion in 2013 to US$1 trillion in 2020”.

As a country therefore, we must think of how to fund IoT based researches, encourage IoT related Startups to spring up, and create an enabling environment for holistic local IoT growth through establishment of proper policies and implementation of ambitious but achievable master plan.

If our target is to get no less than 1% share of the gigantic IoT pie, and we set out to get it, we will and by 2025 the country will be worth well over Kshs 135 trillion; but first, we have to develop a framework for the growth of Internet of Things in Kenya.