Last year, Jeremy Gordon noticed two things about the city of Nairobi: there were almost no affordable advertising options for small businesses, and people spent hours every day trapped in buses on the city's traffic-choked streets. These hours were a waste of time, he thought. Gordon wanted to give commuters something interesting to look at while also providing local businesses with better visibility.
Gordon and a partner founded FlashCast, a small startup company that combines location-aware technology and SMS-based interactivity to feed content to the LED displays on Nairobi's buses. Using even the most basic of phones, commuters can use SMS to participate in chats, discussions and games, sharing their comments with other passengers. But nearby businesses can also craft their own messages to send to passing buses, giving them an easy way to get noticed.
By interacting with bus passengers, FlashCast was doing something else as well: it was amassing data on commuters, their preferences and their habits, which no one had done before. Gordon knew this data was commercially valuable, but he had no way to analyse it. That's when he turned to one of the newest players on Kenya's tech scene: IBM.
In some ways, IBM's presence in Africa is anything but new. According to Nick Redshaw, IBM's general manager for Central and North Africa, the tech giant has been working on the continent since the 1930s, and now partners with companies and organisations in over 20 African countries. But November saw the official inauguration of IBM's first research lab in Africa, at the Catholic University in Nairobi. The high-computing facility employs 20 PhDs from around the world, many from Africa or the African diaspora.
For IBM, the lab is a giant step into the African market. "IBM is making a long-term strategic investment in Africa as we see a significant business opportunity on the continent and demand for key services in the banking, telecommunications, government and oil and gas sectors," Redshaw says. "Over the next few years we plan to continue strengthening our network with new facilities, offerings, services and partnerships."
For Kamal Bhattacharya, director of IBM Research Africa, the new lab offers the opportunity to work on what he calls "Africa's grand challenges", applying technological solutions to issues like health care delivery, financial inclusion and access to energy.
Commercial viability, he says, would be an important criteria for projects IBM takes on. "They have to have a life of their own either through products or service offerings that IBM would sell, or through a goal to market with the partner organisations or with small startups."
If IBM is setting up shop in Kenya, it is because it believes not only in the commercial prospects in Africa but in the types of innovation happening there, according to Bhattacharya. "I think that people actually underestimate the amount of innovation that exists and the dynamic nature of many countries in Africa," he says. "Many of the traditional industries here are extremely innovative, and are extremely fast in transforming themselves, are extremely willing to take tremendous risks. Everyone always talks about the lack of infrastructure, but there's just a lot of stuff happening."
The Nairobi lab is meant to be a research hub not just for Kenya, but for the entire continent. Bhattacharya says that there are plans to expand into West and Southern Africa, although no commitments have yet been made to establish labs in other countries.
IBM chose Kenya at least partly because the Kenyan government has invested $10m over a five year period through a public-private partnership with the company, Bhattacharya says. In exchange, IBM has committed to working on issues of national priority, which, alongside a raft of social issues, includes attracting skilled Kenyans from the diaspora back into the country.
But, Bhattacharya says, reversing the brain drain out of Africa will take a lot more than one lab. In India, for example, "there are so many options" for PhD graduates from the West, he says. "And here in Kenya, for the same calibre of people, there's essentially us. That can't reverse the brain drain — you have to have the right density of opportunities so that coming back to Africa will really become an option outside of wanting to be an entrepreneur."
This would require other tech companies to open up research and development or engineering-based facilities on the continent as well, he points out. "It means more competition for me but that's a good thing, because it will also broaden the range of people."
To date, few international IT companies have done that, observes FlashCast's Gordon. This lack of research investment has meant that data and large-scale data analysis have been scarce, which is problematic for small companies like his who cannot afford to hire private consultants to crunch numbers, he says – which is where IBM can come in.
"The thing that makes me optimistic is the fact that IBM has chosen to invest in this particular way on the continent, understanding that there's not enough information and there's not enough good analysis coming out," Gordon says. "There's a high potential to add a lot of value by putting really smart people on the ground."