allAfrica.com: Kenya: State Plans to Build Technology Park (Page 1 of 1)
Kenya: State Plans to Build Technology Park
The Government is planning to build a 5,000 seat technology park at the export promotion zone by 2012, a move that is aimed at increasing the business process outsourcing resources in the country.
This comes as most companies embrace outsourcing, triggered by the need to cut costs and specialise in core businesses.
The initiative which will be a private public partnership, is expected to lure big multinational IT investors into the country, said the ICT board chief executive, Mr Paul Kukubo.
Currently, there is only one outsourcing company, KenCall, doing service export work at the zone. On completion, the park will link and provide infrastructure support to small and medium enterprises, educational and research institutions.
Information technology export oriented businesses are also expected to benefit from the ICT park through tax incentives from the government. In order to attract private participation, the government is likely to offer concession on land to those willing to construct IT offices there and some tax incentives on utility services such as water and electricity.
"The private developers should also be assured long term tenancy guarantee by the government, there should be a plan by the government that incase the private developer doesn't get tenancy for the property, the government will put into use the developed offices," Mr Kukubo said.
Other than creating employment to the locals, the facilities will provide skill exchange to the employees. Some of the IT services that are expected in the proposed technology park are, software development, computer assembly and business processing outsourcing.
Internationally, some of the countries that have managed to attract multinational investors in IT by building the technology parks are India and Mauritius.
At the moment, the companies at the EPZ enjoy exemptions from corporate income tax, withholding tax, stamp duty, import duty and VAT. Other incentives include procedural incentives project approvals done within 30 days, facilitation of work permits and import logistics.
Kenya's outsourcing industry has in the recent years attracted investors due to many skilled labourers in the market who are cheaper compared to other African outsourcing destinations such as South Africa and India.
As the concept gains acceptance worldwide, established outsourcing firms have grown while starts ups have re-engineered themselves to concentrate on providing niche outsourced services. According to leading global outsourcing industry advisor -TPI Inc.- during the first half of 2006 the total contract value of the global industry was estimated at $ 38 billion.
Outsourcing has since grown to a massive global industry driven by investment in ICT connectivity. While the trend in outsourcing was previously to sub-contract to firms located in the same countries as the end user organisations (now called on-shore BPO), globalisation and cost implications in the developed world have made off-shore outsourcing the preferred trend.
Firms and institutions that use these services, being able to outsource provides greater value to their business activities by allowing them to concentrate on their core activities while strategically letting experts handle the rest.
Outsourcing is generally associated with non-core activities in a firm that are ICT-driven, may be labour intensive, too tedious or are expensive to undertake. It may also affect activities that require expertise that is not readily available in your firm or activities that require activity around the clock.
The information communication technology board said it will issue an Expression for Interest for consultancy in the construction within the next two weeks.
Blogged with the Flock Browser