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.

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