2007 Speeches
Speech at the Official Opening of G7 Systems Kenya Ltd.
Delivered by Deputy Chief of Mission Pamela Slutz
January 19, 2007
Honored guests, ladies and gentlemen, good morning.
First, let me say congratulations to all of the university officials, faculty, staff, and students at the recent re-naming of your institution from the Western University of Communications, Science and Technology to the Masinde Muliro University of Science and Technology. Your new name symbolizes, I hope, a new and ever brighter future for your institution.
Second, I am honored to be here today to participate in the opening of G7 Systems Kenya Ltd. at the University's Science and Technology Park. I am truly excited about the business venture being launched today, and about what it tells us about Kenya's economic future and its place in today's world economy.
G7 Systems Kenya brings together capital and expertise from a company from my own country -- from Tampa, Florida. It has already invested $200,000 and considerable technical expertise in Kakamega, a small town in Kenya, 15,000 kilometers and a world away from the southeast United States. I suspect not one in a thousand Americans would know where to find Kakamega on a world map if asked to do so. Yet, here in Kakamega, on this fine campus, 30 Kenyans are now at work doing Business Process Outsourcing, or BPO. In this case, they are providing computer programming services to G7's clients, who operate in the United States and all over the world. Currently, there are 30 of you working at the company, and within four years, your number may grow to 800. You sit and work in Kakamega, but make no mistake: You are participating in the global economy. Congratulations!
G7 Kenya will not be the largest new investment in Kenya this year. But it is an extraordinary one. It has the potential to generate what I call a "triple win." It's not just a win-win venture, but a win-win-win.
First, G7 Kenya is a win for the firm's employees and the local economy. Thanks to the worldwide web and the information revolution it has ignited over the past decade, companies can now outsource complete portions of their operations to take advantage of lower costs and higher quality services elsewhere. These services can be performed by anyone, anywhere in the world - so long as the talent is available - and also a connection to the internet. Kakamega apparently now has both the talent and now the satellite uplink, enabling G7 to offer services to companies literally a world away. This means that jobs that perhaps were done before in Tampa, Florida, or in Bangalore India, are now being done here, in Kakamega, Kenya.
So, where there were no jobs three months ago, thanks to globalization, there are now 30 jobs in a new contact center in Kakamega, with the prospect of many more to follow. BPO jobs in contact centers are high quality jobs that pay well. They are stepping stones into the middle class for those individuals who have the right mix of talent and drive to secure them. The economics are simple. The income and wealth these jobs generate will boost incomes and reduce poverty in Kakamega and the surrounding area, particularly if the venture succeeds and grows. I hope very much that it does.
The other obvious winners, of course, are G7 Kenya's customers, who are likely to include a number of globally-renowned Fortune 500 companies. Simply put, when a customer can outsource an administrative function in a way that saves money, that customer wins. By saving money, G7's customers will be more profitable, more competitive, and have more money to invest in new businesses and products of their own. This will spur still more business for partner firms like G7 Systems. These cost savings thus take on a virtuous cycle of their own, creating more business and more income for everyone.
But G7 Systems Kenya is special and different from most other new business ventures. Indeed, G7 Systems Kenya is also a win for Kenya more broadly, quite apart from the money it makes for itself and saves for its customers. In this way, I believe G7 Systems is a small but important harbinger of a bright economic future for Kenya.
Agriculture and manufacturing will always be important mainstays of Kenya's economy. But in my view, and in light of Kenya's comparative advantages, neither of these areas will be a dynamic driver of change, propelling Kenya out of poverty and into middle-income prosperity in the 21st century. Instead, economic dynamism will spring from knowledge and services. In other words, Kenya's future lies in the success of companies like yours, G7 Systems Kenya.
The fact that an American firm decided that of all the small towns all over the world, it would choose a town in western Kenya to establish a contact center tells me something. It tells me that the market is starting to recognize that Kenya has the human talent to compete in the global economy. Kenyan knowledge workers, it would appear, can compete on price and quality with those in India and elsewhere.
This is no surprise. Kenyans place a strong value on education, and Kenya's educational system, while not perfect, is one of the best in Africa. Kenyans speak English, the lingua franca of the business world, superbly. These are huge advantages in a new global economy increasingly linked by digital technologies, in which work can be done anywhere, anytime, and by anyone with the talent and drive to do it well and cheaply.
In short, far from fearing globalization, Kenya can and should embrace it. Kenya has already proven it can be globally competitive in areas like tourism and flowers. The success of Safaricom and other telecom ventures tells us Kenya can do the same in the knowledge and services sector by tapping into the vast potential of its educated workforce and by linking that talent to the rest of the world through digital technologies.
Of course it's not enough to have talented, well-educated, hard-working knowledge workers to succeed in today's wide-open, competitive world economy. Kenya also needs to have the right mix of policies, institutions, and infrastructure to allow its talented citizens to play successfully on the world economic stage. This is why the emphasis now being placed by President Kibaki and the Ministry of Information and Communications on reforming and rebuilding Kenya's ICT infrastructure and regulatory regime is so very important. In his recent speech launching Vision 2030, President Kibaki rightly identified ICT a fundamental driver of the county's future economic development. The government is now formulating an ambitious ICT master plan. Its goal, consistent with my views today, is to transform Kenya into a knowledge-based society as a means of eradicating poverty and raising the living standards and quality of life of all Kenyans.
The master plan will strongly emphasize private sector investment and job creation through contact centers and BPO businesses just like yours. This emphasis dovetails perfectly with the Government's Private Sector Development Strategy, which was recently launched under the able leadership of the Ministry of Trade and Industry.
So the plans and strategies are being put in place. They now must be vigorously and urgently implemented if the promise of a prosperous knowledge-based economy is to be realized. Much more needs to be done by the government and the private sector.
I wish to assure you that the U.S. Government recognizes the importance of the ICT sector to Kenya's economic future. We will continue to work closely with the private sector and with our Kenyan Government counterparts to improve the regulatory environment and infrastructure so that companies like yours can flourish. We are working actively, for example, with several U.S. firms that hope to participate in the eventual construction of an undersea fiber optic cable along Africa's East Coast. Such a cable would at long last provide cheap, fast, broadband connectivity between Kenya and the rest of the world, eliminating the current reliance on costly satellite links.
On licensing, in the specific case of G7 Systems Kenya, we hope the Communications Commission of Kenya will move quickly to approve the company's satellite frequencies, together with a waiver of frequency fees. Jobs and income are at stake. Governments should facilitate, and not delay, the forward march of the private sector.
In closing, let me again say congratulations to all of you. I'm honored and proud that the United States is playing an important role in your new venture. The future is bright for G7 Systems, for this university, for Kenya, and for the U.S.-Kenyan partnership. I wish you well. Thank you.