Two years ago, the Geneva-based International Trade Centre (ITC) said the Covid-19 pandemic has highlighted the importance of distributing risk geographically to cope with future crises.
The ITC, which is a joint cooperation agency of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO), said the pandemic has accelerated a trend towards using digital products and services, opening new opportunities as well as making outsourcing more essential today than ever before.
According to the agency, this gives African countries a chance to get a bigger share of the global information technology and business process management markets.
ITC’s Executive Director Pamela Coke-Hamilton said, “These trends represent an opportunity for digital service providers in Africa.
Emerging firms across the continent are bringing ingenious business models and innovation to the digital technology sector, adapting their business models to new requirements and revamping their competitive offerings.”
Representatives of the five innovative ventures that were invited along with Uganda’s ICT ministerial team to the Dubai Expo 2020, speak to this emergence of an African dash for international recognition and market share.
The government is committed to fostering a trusted and vibrant business environment, where businesses and workers are empowered to innovate and evolve into making the country ‘Africa’s Innovation Powerhouse’.
Speaking recently, Chris Baryomunsi, the Minister of ICT and National Guidance said, “I believe that we all have the shared aspiration of seeing Uganda become a hub of technology, innovation and enterprise.
We are already the most entrepreneurial nation in the world; what we need to do is fix the area of innovation.”
Providing the guiding hand is the Business Processing Outsourcing (BPO) and Innovation Council that was set up towards the end of 2021.
It is chaired by Professor William Bazeyo and assisted by Dr. Rebecca Isabella Kiconco as the Vice-Chairperson.
For starters, BPO companies in Uganda are now required to register themselves with the Council to build an up to date database.
The Council is working with the Ministry to formulate strategies for creating jobs for the youth through ICT outsourcing and Innovation and prescribes regulatory frameworks/reforms and projects relevant to the growth of the BPO and Innovation industry.
In addition, the Council will also identify, support, and scale-up breakthrough technologies and disruptive innovations.
When you look at the big picture as portrayed by BCG, a leading international consulting firm based in Boston, it may require a leap of faith.
The region lags in the most important measures of innovation capacity. Although Africa has 18% of the world’s population, it accounts for only 0.3% of global R&D spending and 0.5% of patent applications.
Trade statistics paint a picture of a relatively low-tech, low value-add region: Africa produces 0.4% of global high-technology exports and 0.8% of middle-technology exports, such as industrial machinery, autos, and chemicals.
However, the Ministry of ICT and National Guidance has a game plan based on what is already on the ground and working hard toward gathering the building blocks necessary to get things moving and sustain momentum.
First is the fact that Uganda has one of the youngest populations in Africa, with 69% of the population under the age of 24.
In addition, Ugandan software developers are fluent in English which makes communication easier. The country has been ranked in the top percentile among African countries linked to and soaring in digital potential in line with BPO.
In terms of internet connectivity, coverage is predominantly provided through wireless networks – especially mobile platforms.
Internet subscriptions in Uganda have crossed the 29 million mark, suggesting that nearly one in every two Ugandans has internet access. There is significant coverage of 4G and 3G across the nation.
During the past decade, the Ministry has heavily invested in establishing secure infrastructure and information systems through the National Backbone Infrastructure (NBI) fibre cable. The result is a secure high-speed network that connects most of Uganda is in place.
To reduce what would be considered impediments to setting up BPO or innovation, the Ministry has lowered the cost of the internet.
In the next financial year 2022/2023, the rate will be $25 for every 1Mbps of dedicated internet. The Government’s target for BPO/Innovation is to buy data at $5 for every 1Mbps of dedicated internet.
For innovation purposes, the regulatory environment should be catalytic, but frequently it can be a hindrance. The Ministry has strived to ensure that the relevant regulation being implemented is catalytic so that all the laws and regulations are agile, iterative, and collaborative.
Recently, the United Nations Capital Development Fund ranked Uganda 12th in Africa, with a score above the regional average in technology and governance.
UNCDF indicated that the performance of Uganda’s policy and regulatory environment as assessed by the Inclusive Digital Economy Scorecard (IDES) is consistent with other global comparative sources.
As an added incentive, the government is developing Technology Parks in all the regions of the country using Public-Private Partnerships (PPPs). These parks will have all the utilities needed to inspire individuals and start-ups to innovate.
Once the required infrastructure is laid out, the next biggest challenge for Ugandan BPO firms to enter the value chain is pricing.
Saving money remains the leading reason for companies to outsource activities to providers abroad. Staff costs per hour are less in developing countries than in say, Europe and North America.
Consequently, outsourcing can offer huge savings, especially for activities that are labour intensive. To attract BPO contracts, Uganda’s pricing needs to be competitive and transparent.
The other factor that will attract interest from potential customers abroad is specialization.
Being the best at what you choose to do. According to one industry view, the more you invest in specializing and finding your comfortable niche market, the better your chances of finding clients and partners. As far as the ICT ministry is concerned, all is possible!