Abstract
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. For this report, we set 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).1 BPO has been a priority in the national ICT strategies of both countries, so we anticipated this sector to provide a fertile ground for comparing expectations and realities of the role that changing connectivity has played following the deployment of fibre-optic cable infrastructure. The study outlined how policy, popular discourse and media got somewhat carried away by the promise of internet connectivity as the fuel for the growth of Kenya's and Rwanda's BPO sectors. The development of ICT sectors fell short of many original hopes. Internet connectivity proved to only function as a catalyst for economic growth in combination with other enablers, even for the examined sectors of connectivity-based enterprises. Competitive advantage is always relative, and, in the case of Kenya's and Rwanda's BPO sectors, India and other Asian BPO destinations have maintained the edge in international markets. Despite the overall positive evolution of ICT-based subsectors in Kenya and Rwanda, the role of internet connectivity for growth in knowledge economies continues to be a complicated one, including for connectivity-based enterprises. Future opportunities might actually lie in 'close' (local and regional) markets, and policymakers and indeed all economic actors will need to continue to learn and adjust to other unexpected developments brought about by internet connectivity.
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