Saturday, 2 June 2012

Making sense of BPO in East Africa

Fieldwork in Nairobi and Kigali has been a challenging delight. Talking to strangers is a hobby that I unfortunately picked up from my sociologist mother, who routinely starts conversations with people in supermarkets about the history of the aubergine (eggplant). Talking to strangers about their everyday experiences of the economy is my own individualized sociological syndrome, so fieldwork is a pleasure.

So far, I have been focusing on training and piloting our interview guides and questionnaires with our colleagues from the NUR and the University of Nairobi in the tea and tourism fields. I have also had a few meetings with the Kenyan ICT chambers, the BPO society in Kenya, the Rwandan Development Board (RDB) and the ICT Chambers in the Rwandan Private Sector Federation (PSF) that have helped me get to grips with the BPO/ICT field.

What I want to reflect upon in this blog is the importance of conceptual understandings in developing economies, and in particular, on how people “make sense” of a new field like Business Processing Outsourcing (BPO).

Mark and I have been writing a paper for a special edition of Environment and Planning A about the growth of the BPO and software sector in Kenya. In particular, our paper examines how imagination and representation play a strong, intermediating role in how investors approach Africa and how high speed internet may be offering Kenyan firms and entrepreneurs the opportunity for new forms of place representations- to change the way foreign actors perceive Kenya and Africa. This paper fits into a wider economic sociology literature that argues that cognition and decision-making are distributed between our own minds and the environments in which we think and operate. Technologies, institutions, ideas and perceptions all intermediate our decision-making. Some scholars have referred to these intermediating influences as ‘socio-cognitive prostheses’ in that they allow individuals to understand and interpret information through the use of extra cognitive ‘limbs’ (Williamson, 1985; North, 1990).

Kenya and Rwanda are both trying to market themselves as growing ICT hubs, and in particular, as BPO destinations.

BPO, in case you have no idea what I am talking about (my apologies!), is any kind of business activity that can be outsourced to actors outside a firm. If such processes can be outsourced through a “wire” then they can potentially be carried out in another country, on the other side of the planet. Aka- they can be offshored. The roll-out of a global fibre optic internet infrastructure could therefore, theoretically transform the international division of production and labour, by allowing those in low and middle income countries to compete with workers and firms in high income countries. This is what makes our project so interesting: will the internet allow African countries to re-define their position in the global economy?

Kenya and Rwanda have very different approaches to make this happen, reflecting their different state structures and histories. The Kenyan approach is much more private sector driven, with companies leading the way and the government, to a certain extent, catching up. Rwanda, on the other hand, has a strong developmental state led by a very active, well-educated diasporic community. When you visit the Rwandan Development Board, you realize how organized and determined the Rwandan government is in its intention to lead the private sector to the market.

One thing that has been drummed into me in both my doctoral research on unemployment and recruitment in Sudan, and in my current research on BPO in Kenya and Rwanda, is the fact that in addition to competition, markets require cooperation, and to a certain extent, volunteerism. There are plenty of things that do not automatically arise from the “rational self-interest” of capitalism. Many of these things are taken for granted by those in well established markets: high levels of reliable education, political stability, anti-corruption policies, infrastructure! These conditions have been brought about through long negotiations between governments, individuals, unions, guilds, professional associations and others over time.

Materially speaking, our economies involve intricate arrangement of technology and institutions: treasuries, banks, ATMs, security systems, smart cards, etc. - all mobilised to prevent fraud and counterfeit and to secure the trustworthiness of transactions. On a more conceptual level, the economy involves common understandings that allow us to make sense of one another in our day to day activities. In other words, economies are not just material places, but representational and cultural spaces too: spaces that have been constructed through social, cultural and political processes that create common understandings and shared interests.

In the case of a new field, like BPO, how does this common understanding come about?

As I know myself, BPO is not the easiest thing to get your head around. Usually, when I tell people that I am working on a research project focusing on BPO, the first reaction is “huh?” in much the same fashion as people react to the history of the aubergine in aisle three. Those working in the field are not even certain what they mean by “BPO”. And Mark is always warning me to be open-minded in our definition of BPO.

This is something that came out very explicitly with my discussions with Rwandan players. When I first visited the ICT Chambers in the PSF, I was told that Rwanda doesn’t really have a BPO industry yet. Feeling a bit discouraged but not disheartened, I visited someone else at the PSF, who clarified that Rwanda has a few BPO firms, but not enough to warrant their own association in the federation. Wondering if our project’s focus on BPO was ill-conceived, I visited the head of ICT in the RDB, who further clarified that Rwanda only has a few firms who self-identify as BPO, but that there are many many more who don’t know that they are potential BPO firms.

In other words, the export of services requires countries to first conceptualise BPO, identify relevant companies and in a sense, sensitize themselves to their own potential and to get to grips with the potential of the internet to re-shape business relations. Despite the fact that Kenya is currently way ahead of Rwanda in terms of its infrastructure and expertise, I think the Rwandan government might be “conceptually ahead”.

The former BPO society in Kenya was dissolved partly because it depended on a few dedicated individuals who sacrificed a lot of time and energy and felt that it was up to others to carry on their work. There is a new society in the works, the BPO and ICT society, but at the moment, the industry seems to lack an organizational framework. In Rwanda, it is the government providing the associational framework, the common understanding that will allow the country to restructure itself as an exporter of services. The RDB is carrying out a survey of the economy to identify firms that might be BPO, so that they can develop policies to better promote the export of services.

‘Making sense’ is as important as building infrastructure. Kenya and Rwanda have fibre optic, but that is just the first hurdle. The two countries have to build conceptual infrastructure as well. I look forward to the interesting comparison: private sector vs. development state, both attempting to make sense of the new economy.

Tuesday, 31 January 2012

Digital Borderlands

So I have not been good about following up on my last blog post (a post about the business side of the internet in East Africa will hopefully come shortly). In the meantime, I wanted to reflect on an OCAF talk I went to last week by Wolfgang Zeller, about the borderlands of 'sugango' (Sudan-Uganda-Congo) and how thinking about borders might help us think about other kinds of borders, digital or otherwise.

Wolfgang was sharing his work on the Sudanese-Ugandan-Conoglese border. My friend Lotje also does reserch in this area and it was great seeing some snapshots of a part of the world that seems peripheral to most people in Khartoum and Kampala, let alone Edinburgh and Oxford.

Wolfgang's main point was that borderlands should not be understood as peripheral or lawless- as spaces where no governance exists or where state power needs to eventually return- but rather they should be understood as centres in their own right, as places where new forms of governance take shape and where many different kinds of people converge precisely because a border exists there.

The activities that take place in borderlands, in other words, are directly related to the presence of boundaries and red lines. I think this perspective is helpful to those who speak of digital 'divides'.

Divides are not just barriers or lines that keep people apart- but they are lines that are useful for escaping the jurisdiction of powerful groups, insecurity and lines that allow people to make profits and livelihoods.

  1. Borders create safe havens from insecurity.
  2. Borders bring many different kinds of people together.
  3. Borders create inequalities that entrepreneurs can capitalize upon.

So how does this relate to digital divides...

Firstly, digital divides are not all bad to everyone...

In the case of the Sugango border, when insecurity breaks out on one side of the border, people move across to escape.

From my own research, I am aware that the limited penetration of the internet in Sudan is useful to HR managers. They can share information with the right 'caliber' of people and thereby filter the applicant pool in a way that they wouldn't be able to do if they used more traditional forms of communication like newspaper or noticeboards. The internet "divide" allows them to make out particular kinds of graduates from an otherwise large and undifferentiated mass of unemployed people whose qualifications have fallen into disrepute (due to the expansion and degradation of the tertiary education system). You could interpret the situation as one of information insecurity; by crossing borders, certain groups can protect themselves and make themselves visible to employers.

Information about jobs is a very particular kind of information that is valuable to individuals and is unlikely to be shared widely during periods of chronic unemployment, but I think this principle might be true in many situations. Divides create havens, as well as barriers.

I am not saying that the people 'protecting themselves' are necessarily the people who are deemed worthy by aid agencies or those who judge the 'digital divide' a bad thing. The people using the digital divide of Sudan are managers and more experienced/transnational job applicants. Nevertheless, we need to be mindful of how all people view these boundaries of technology. For instance, if we want to make information about jobs more 'democratic' or meritocratic, then we have to recognize their viewpoints. If internet penetration increases, will HR managers not find new divides, retreating into more private spaces of the internet? Digital divides cannot be eliminated without recognizing that they provide security and stability to some. These people may very well erect new digital divides in the future.

Secondly, borders and divides attract large groups of people. They are hubs of activity.

In the case of Sugango, they bring...

- the many truck drivers and traders that cross the borders bearing goods and oil.
- the 'opec boys' who organize the informal petrol trade, by siphoning oil from the tankers.
- the aid agencies and UN agencies that organize the movement of refugees across borders
-the customs officials whose relationship to the capital cities allow them to capitalise on insecurity when people begin to flee from insecurity in one country into another country (one wonders about the differences between the aid agencies and the officials in this case).
and then of course,
- the many workers of the 'boom towns' who provide food, drink, accommodation (and dentistry) to those who pass through.

All this activity in a place that would otherwise be peripheral!

When it comes to the 'digital divide', we can make out similar kinds of groups:

-the big IT companies who construct fibre optic cables, microwave and Imax towers, etc.- "transferring 'connectivity' across the digital divide"
-the smaller ISP providers and mobile phone entrepreneurs.
-the smaller entrepreneurs who set up mobile phone credit stalls
-the aid agencies who push ICT4D initiatives, who themselves try to manage the movement of people across digital 'divides'.
-the many who provide food, drink, accommodation to those who flock around the digital divide.

This comparison is not exact, for we are not talking about different jurisdictions here or different sovereign powers, but then again, we might think of pre-digital communication and post-digital communication as perhaps producing different kinds of power configurations, with varying degrees and conditions of state power.

Lastly, borders create entrepreneurial opportunities.

Along the borders of Sugango, Wolfgang described two kinds of entrepreneurs: entrepreneurs of information and entrepreneurs of security, describing the high premium of information about roads, currencies, prices, relationships and generally, the importance of knowing what's coming and going. Meanwhile, security men abound in different costumes- some recognizable, others emerging only when trouble begins.

Inequalities of price and abundance create money making opportunities...

This is something that has been strongly written into the Internet in East Africa project at Oii. Instead of seeing ICT penetration as producing 'disintermediation', we might think of it in terms of 're-intermediation' (This is also described by French and Leyshon in their analysis of ICTs in financial markets). In other words, we should not think about eliminating digital divides as removing gatekeepers or intermediaries, but as creating opportunities for new intermediaries to come to form.

How does the internet, the mobile phone, the mobile paying system, the crowd-sourcing infrastructure create new kinds of intermediaries and entrepreneurs who manage the digital divides out there?