The Internet and Business Process Outsourcing in East Africa: Value Chains and Networks of Connectivity-Based Enterprises in Kenya and Rwanda

Internet connectivity is widely considered to be a game changer for knowledge economies of developing countries. The arrival of submarine fibre-optic underwater cables in East Africa in 2009 and 2010 is seen by many as a strong case in point. The fast evolution of the information and communication technology (ICT) landscape of Kenya and Rwanda that ensued has attracted the attention of actors from private investors, development agencies, NGOs, policymakers and many other groups.

Kenya became a role model for its widespread adoption of mobile money services and a burgeoning ICT application development sector; Rwanda’s government became known for its explicitly ICT-oriented development agenda as well as large-scale ICT projects in government, health and education that aimed to latch onto fast-growing mobile subscription rates and 3G network roll-outs. This report sets out to examine the role that changing connectivity has played for a particular component of the ICT sector in Kenya and Rwanda: ICT-enabled business process outsourcing (BPO). It outlines the challenges faced by local BPO firms and the limited gains brought by increased connectivity, before suggesting ways for BPO firms to make improvements.