Dr Ndii on Kenya bellycrats pervasive incompetence

[MOON Ki]

Knowledge economy is not computer economy.

I did not suggest otherwise, but, once again, thanks for enlightening me. 

M-pesa ecosystem is an example of knowledge economy. Current banking revolution is mostly thanks to computers making many things possible. You know how much a hassle banking was before computers were born.There are new jobs that you can see if you've never been to kenya in last 5-10yrs. One is ubiquitious boda boda - transport sector of the economy- that now employs millions of youths - who otherwise would be idling or under employed in farms.

M-Pesa ecosystem is part of the knowledge economy.    Good.   Current banking revolution is mostly thanks to computers making many things possible.   Also good.   And so on, and so forth.   All good.    And the millions of youths supposedly employed in the boda-boda industry: how do they fit into all that?  Their knowledge of bike routes?

As for m-pesa & banking agent jobs - all you need to find out is how many safaricom and airtel agents are out there - last I checked there were 150,000 in Safcom alone - and way bigger number than that ... That 200K is understatement considering banks have way more agents than that.All those are example of new jobs.

One more time: what are the sources for the numbers you give?

The constant is the level of education..so I mean std 8 drop out working formally as security guard in some company - is doing less than std 8 drop out working in transport sector as a boda boda.

Perhaps so.   One question I had is whether they---watchmen, boda-boda types, etc.---are making enough to get out of poverty.   The other question was in relation to your statement that:

all these jobs have been shown to pay as equally well as formal jobs...such a teacher or doctor...for the same level of education.

and here is what I asked:

What does "for the same level of education" mean when comparing a doctor with supermarket attendants and cyber attendants? 

[RV Pundit]

Quit asking elementary question.Wages for boda boda and security guard will rise as the economy grows..now doing around six percent...so eventually our security guard will earn as well as us security guard.

[MOON Ki]

Quit asking elementary question.Wages for boda boda and security guard will rise as the economy grows..now doing around six percent...so eventually our security guard will earn as well as us security guard.

OK.   That being so,  let's celebrate them as pillars of the Knowledge Economy, Vision 3020 2030, and leap into the First World.   

[Kim Jong-Un's Pajama Pants]

http://www.nation.co.ke/oped/Opinion/Lessons-from-Asian-tigers-/440808-3342850-8gt4ou/index.html

Confession.  I hadn't looked at this story at all.  David Ndii as usual is thought provoking with his economic analogies.  That helps me understand some economic concepts I otherwise would not.  The one that catches my attention in this story is

A worker with a wheelbarrow can offload 100 boxes per hour. One worker with a forklift offloads 10 times as much, that is, 1,000 boxes an hour. Should an economy without capital invest in wheelbarrows or forklifts?

A wheelbarrow costs Sh5,000 (except in Bungoma). A forklift costs a million. One forklift buys 200 wheelbarrows. Two hundred wheelbarrows will move 10,000 boxes an hour.

The forklift raises the productivity of one worker to 1,000 boxes per hour, but the other 199 workers who would have used wheelbarrows to raise their productivity remain at the maximum manual productivity of 20 boxes per hour, for a total output of 4,980 boxes, translating to productivity of 24.9 boxes per worker, a quarter of the labour productivity of the wheelbarrow economy.

This illustration hopefully clarifies that what I have argued for many years is about allocation of capital, not redistribution of income, about inequitable distribution of tools, not of food.

The way I understand him.  He is not literally suggesting replacing forklifts with wheelbarrows.  It's an analogy.  But rather the point he is making is that what drives economic growth actually matters a lot.  He is suggesting that the inequality in benefits from Kenya's economic growth result from an inequitable distribution of the tools.

He also suggests that it is better to locate an industrial park at the coast than in Naivasha.  Now if one considers the costs of transportation over short distances in that part of the world, the fact that the coast also has readily available cheap labor, what is a good argument against this point?

[Kim Jong-Un's Pajama Pants]

Knowledge economy is not computer economy. M-pesa ecosystem is an example of knowledge economy. Current banking revolution is mostly thanks to computers making many things possible. You know how much a hassle banking was before computers were born.There are new jobs that you can see if you've never been to kenya in last 5-10yrs. One is ubiquitious boda boda - transport sector of the economy- that now employs millions of youths - who otherwise would be idling or under employed in farms. Their earning is certainly more than what guys make in industrial area...and way better than those in Ethiopia slave factories.As for m-pesa & banking agent jobs - all you need to find out is how many safaricom and airtel agents are out there - last I checked there were 150,000 in Safcom alone - and way bigger number than that - I have seen survey of their earning (from transactions fee) -coming down to 12-30k per agent on average. That 200K is understatement considering banks have way more agents than that.All those are example of new jobs. The traditional jobs of industrial area, farming and construction work is being suplimented by new jobs - more example Uber taxis jobs - that is knowledge economy job - thanks to a simple mapping application.

You don't have to manufacture chips to take advantage of knolwedge economy. All you need are the kind of educated, innovative, and receptive people like kenyans.

As for earning - in informal sector -catching up with formal sector - you need to look for labour survey that was done I think in 2010 or about. The constant is the level of education..so I mean std 8 drop out working formally as security guard in some company - is doing less than std 8 drop out working in transport sector as a boda boda.

With the knowledge economy - we need to rethink this manufacturing is the only way out for us.

I get the knowledge economy bit.  It is not IT.

About the silicon chips, I think this is precisely the kind of high-tech industry that an educated, innovative and receptive people like Kenyans would benefit from.  It requires huge investments in terms of infrastructure obviously. 

There is a lot that goes into it, so it can spur the growth of related industries and services.  From chemical processing industries, to real estate, to restaurants, and other things that follow such developments.

And in the process Kenya gets to master the production of something whose demand worldwide is virtually unlimited.  I am saying we need a visionary that says by 2022, Kenya should be host to a factory assembling silicon chips and then gets down working on making it happening. 

I don't get the impression that such a drive would take away or slow down the knowledge economy...if anything, it would just add to it.  To be fair, I have no idea how or what the government should do to make that happen.  Maybe attract one of the big players like intel or a rival to set up shop.

[MOON Ki]

About the silicon chips, I think this is precisely the kind of high-tech industry that an educated, innovative and receptive people like Kenyans would benefit from.  It requires huge investments in terms of infrastructure obviously. 

There is a lot that goes into it, so it can spur the growth of related industries and services.  From chemical processing industries, to real estate, to restaurants, and other things that follow such developments.

And in the process Kenya gets to master the production of something whose demand worldwide is virtually unlimited.  I am saying we need a visionary that says by 2022, Kenya should be host to a factory assembling silicon chips and then gets down working on making it happening. 

I don't get the impression that such a drive would take away or slow down the knowledge economy...if anything, it would just add to it.  To be fair, I have no idea how or what the government should do to make that happen.  Maybe attract one of the big players like intel or a rival to set up shop.

A very good example of what you have in mind would be Malaysia.   Take a look at its development in the electronics industry.

Red: Going by what's in all sorts of media, Kenyans have 2022 very much in mind.  I just don't know about visionaries and chips  ... unless it's the numerous "prophets" and potato chips done in transformer oil.

By the way, Pundit seems to have a fairly broad view of the "knowledge economy".    For example:

more example Uber taxis jobs - that is knowledge economy job - thanks to a simple mapping application.

To my mind, the essence of such a job is still actually physically driving a taxi, regardless of the secondary activities and "apps" and whatever.   

But to amuse myself .... My local pizza-delivery place has recently gone from taking phone orders to online-only, thus joining the "knowledge economy".  The place I use for dog-walking has also taken a similar path; woof woof in the "knowledge economy".   And looking at the back pages of some local rag, I see that even the local brothel too has not been left behind: online-only bookings ... f**king in the "knowledge economy" is probably sweeter than the "regular kind" ...    And so on, and so forth.

[RVtitem]

South Korean model?

www.nation.co.ke/business/South-Korea-challenges-Kenya-on-new-model/996-3369928-d5cn2g/

[RV Pundit]

My last on this. It pretty pointless arguing with some folks here. Kenya core competence right now is in the service sectors - such as financial, retail, wholesaling & trade,tourism,education,ICT -pretty much the leader in sub-sahara (outside rsa) - and manufacturing just doesn't seem to work. There are many examples of countries that have moved to developed world through focusing solely on services. Close home you have Dubai...where Oil contribution to their economy moved from 50% to 3% now. Kenya is also doing well in real estate/construction sector. Those are the sectors it need to focus on...rather than hoping everyone can replicate Asian Tigers model. Ethiopia seem to have the ingredients needed there...really low slavish wages, free land, cheap electricity, dictatorship and etc. We don't have any of those advantages.

[hk]

My last on this. It pretty pointless arguing with some folks here. Kenya core competence right now is in the service sectors - such as financial, retail, wholesaling & trade,tourism,education,ICT -pretty much the leader in sub-sahara (outside rsa) - and manufacturing just doesn't seem to work. There are many examples of countries that have moved to developed world through focusing solely on services. Close home you have Dubai...where Oil contribution to their economy moved from 50% to 3% now. Kenya is also doing well in real estate/construction sector. Those are the sectors it need to focus on...rather than hoping everyone can replicate Asian Tigers model. Ethiopia seem to have the ingredients needed there...really low slavish wages, free land, cheap electricity, dictatorship and etc. We don't have any of those advantages.

If we looked at the areas that kenya excel and its a world beater its in horticulture. The sector employs about 150k employees directly. With improved packaging technology which will allow flowers, vegetables and fruits to be shipped via ships instead of planes the sector will only expand. Maybe we need to ask ourselves what's it that the sector is doing right? The sector is no different from meat slaughtering and packing in midwest america. One thing for sure is that the industry has grown not because there was a grandiose plan by government but from pure initiatives of private sector. In kenya the fastest growing manufacturing sector is in agrimanufacturing which to me looks more like Thailand in late 80s http://www.investopedia.com/articles/investing/081815/emerging-markets-analyzing-thailands-gdp.asp .

[gout]

Thousands of young Kenyans are doing quite well in online writing -academic, articles. Have met Form Four guys doing well even for masters academic assignments after some basic writing training. Quite an indicator of education quality in Kenya. With a page going for at least Ksh. 150 up to as much as Kshs. 1,000, these are some of the quiet low hanging fruits which can be tapped if issues such as better cheaper internet connection as doing 5-10 pages is walk in the park.  Most students complain that internet in universities is switched off at night when they are working!! Intervention by Equity to collaborate with Paypal was quite a timely intervention.

[Kim Jong-Un's Pajama Pants]

About the silicon chips, I think this is precisely the kind of high-tech industry that an educated, innovative and receptive people like Kenyans would benefit from.  It requires huge investments in terms of infrastructure obviously. 

There is a lot that goes into it, so it can spur the growth of related industries and services.  From chemical processing industries, to real estate, to restaurants, and other things that follow such developments.

And in the process Kenya gets to master the production of something whose demand worldwide is virtually unlimited.  I am saying we need a visionary that says by 2022, Kenya should be host to a factory assembling silicon chips and then gets down working on making it happening. 

I don't get the impression that such a drive would take away or slow down the knowledge economy...if anything, it would just add to it.  To be fair, I have no idea how or what the government should do to make that happen.  Maybe attract one of the big players like intel or a rival to set up shop.

A very good example of what you have in mind would be Malaysia.   Take a look at its development in the electronics industry.

Red: Going by what's in all sorts of media, Kenyans have 2022 very much in mind.  I just don't know about visionaries and chips  ... unless it's the numerous "prophets" and potato chips done in transformer oil.

By the way, Pundit seems to have a fairly broad view of the "knowledge economy".    For example:

more example Uber taxis jobs - that is knowledge economy job - thanks to a simple mapping application.

To my mind, the essence of such a job is still actually physically driving a taxi, regardless of the secondary activities and "apps" and whatever.   

But to amuse myself .... My local pizza-delivery place has recently gone from taking phone orders to online-only, thus joining the "knowledge economy".  The place I use for dog-walking has also taken a similar path; woof woof in the "knowledge economy".   And looking at the back pages of some local rag, I see that even the local brothel too has not been left behind: online-only bookings ... f**king in the "knowledge economy" is probably sweeter than the "regular kind" ...    And so on, and so forth.

Yes.  Malaysia.  I think Vietnam is also on the same track. 

The actual plans for 2022 are centered on the tried and tested competency of tribal arithmetic.  Eating.  Vicariously or the real thing. 

"Knowledge economy" is jargon that apparently is very flexible.  At its heart it seems to describe nothing concrete outside of putting value on information.

[Kim Jong-Un's Pajama Pants]

South Korean model?

www.nation.co.ke/business/South-Korea-challenges-Kenya-on-new-model/996-3369928-d5cn2g/

I like the self help idea.  I thought devolution would lead to that kind of thing.  Use local meager resources to improve conditions.  Governments to facilitate or keep off.  There is nothing preventing devolved governments from pursuing that approach.

[RV Pundit]

Here is an article 10 days ago on Nation about Knowledge economy by somebody who understands what we are talking about.
http://www.nation.co.ke/oped/Opinion/Africa-future-is-knowledge-economy/440808-3363258-w7shj3/
For those too lazy to read - the 21st century is knowledge economy - so folks need to quit being obsessed with industrial or agragrian revolution - and start thinking about leapfroging straight to the next revolution.

The four pillars:

• An economic and institutional regime to provide incentives for the efficient use of existing and new knowledge and the flourishing of entrepreneurship;
  An educated and skilled population to create, share, and use knowledge well;
  An efficient innovation system of firms, research centers, universities, consultants and other organizations to tap into the growing stock of global knowledge, assimilate and adapt it to local needs, and create new technology;
  Information and communication technology to facilitate the effective creation, dissemination, and processing of information

Few countries in Africa as ready as Kenya...and this great opportunity that we need to seize..and stop obsessing about manufacturing.

[hk]

Thousands of young Kenyans are doing quite well in online writing -academic, articles. Have met Form Four guys doing well even for masters academic assignments after some basic writing training. Quite an indicator of education quality in Kenya. With a page going for at least Ksh. 150 up to as much as Kshs. 1,000, these are some of the quiet low hanging fruits which can be tapped if issues such as better cheaper internet connection as doing 5-10 pages is walk in the park.  Most students complain that internet in universities is switched off at night when they are working!! Intervention by Equity to collaborate with Paypal was quite a timely intervention.

I totally agree. In areas like Roysambu, wendani there are many of this self employed entrepreneurs who work as a group or individually in outsourcing industry. Most of them that I know are graduates who stopped looking for work in the "formal" sector and now they're self employed. All one needs to get started is a laptop and internet connection. Their payments is termed as diaspora remittance but its actually payment of export of services.

[RV Pundit]

I also know several. Most kids in campus are now doing these small time outsourcing. Now imagine if we could invest in really cheap broadband..and we can export several services. This to me is the future...for kenya..english speaking well educated savy workforce who've used computers since class one..who would beat that in 20yrs from now...when knowledge economy would be the mainstay economy.

I totally agree. In areas like Roysambu, wendani there are many of this self employed entrepreneurs who work as a group or individually in outsourcing industry. Most of them that I know are graduates who stopped looking for work in the "formal" sector and now they're self employed. All one needs to get started is a laptop and internet connection. Their payments is termed as diaspora remittance but its actually payment of export of services.

[veritas]

Absolutely. The thing is however and I haven't seen this done yet, is regional specific decentralized workforce. Right now the culture of entrepreneurs and crowd sourcing are dominated by Silicon Valley culture. This makes it unsustainable for local economies and for collecting tax. I just think there needs to be more structures put in place to make these things systematic and sustainable for communities and to empower a nation state.

For instance India has a huge influx of knowledge based telco, IT workforce but still fall short. When I undertook my cablers exam they were all male and Indian. I noticed what they lack is an awareness of global consumer demands- global culture, media etc. I'd say 5% is producing the product or sharing knowledge and 95% is marketing and just selling it.

I don't think Kenya has the resources to market as well as big guns who well and truly spend a nation's annual GDP for marketing a product.

I think the way forward should be Kenya centric. So setting up an infrastructure that allows entrepreneurs to flourish under certain umbrellas in society. For instance allocating tender opportunities with sufficient leeway for entrepreneur development. Crowd sourcing through mpesa gateways. Make use of more structural or microfinancing type frameworks working alongside NGOs/CBOs etc.

[Empedocles]

I also know several. Most kids in campus are now doing these small time outsourcing. Now imagine if we could invest in really cheap broadband..and we can export several services. This to me is the future...for kenya..english speaking well educated savy workforce who've used computers since class one..who would beat that in 20yrs from now...when knowledge economy would be the mainstay economy.

I totally agree. In areas like Roysambu, wendani there are many of this self employed entrepreneurs who work as a group or individually in outsourcing industry. Most of them that I know are graduates who stopped looking for work in the "formal" sector and now they're self employed. All one needs to get started is a laptop and internet connection. Their payments is termed as diaspora remittance but its actually payment of export of services.

We're tool-users (consumers) and planning on remaining so (even expanding) will not really get us anywhere.

Growth and advancement always goes to the tool-makers (manufacturers) and their point of origin (country).

[MOON Ki]

There are many examples of countries that have moved to developed world through focusing solely on services.

Tell us some---say, 10---of these  "many examples of countries".    We can then discuss them and see if they are suitable examples for Kenya.

Close home you have Dubai...where Oil contribution to their economy moved from 50% to 3% now.

First, Dubai started with oil and used that to finance its development and diversification into other sectors.  What is Kenya starting with?

Second, oil production would be classified as "extraction" (primary sector), not services.   That makes your example doubly hopeless.

(Incidentally, while oil as gone down, manufacturing has gone up to around 14% and is the 4th largest sector of that economy.)   

[MOON Ki]

We're tool-users (consumers) and planning on remaining so (even expanding) will not really get us anywhere.

Growth and advancement always goes to the tool-makers (manufacturers) and their point of origin (country).

The single largest driver of Kenya's economic growth is still what we produce directly: according to KNBS data, agriculture contributed to 30% of growth in 2015.    ICT on the other hand contributed 0.9%, only slighty better than "water, sewerage, and waste treatment" at 0.8%. 

[MOON Ki]

The four pillars:
...
An efficient innovation system of firms, research centers, universities, consultants and other organizations to tap into the growing stock of global knowledge, assimilate and adapt it to local needs, and create new technology.

I see.  So, how is Kenya doing in creating new technology?

Few countries in Africa as ready as Kenya...and this great opportunity that we need to seize..and stop obsessing about manufacturing.

Considering the general state of Africa, that's a bit like proudly announcing that the D- student is the best among those at the bottom of the class.   "Best in Africa" will continue to mean little when the whole of Africa still contributes only 2-3% of world GDP.