OWALO: Unlocking Kenya’s potential in the BPO sector

In Summary
  • To fully exploit global BPO opportunities, Kenya must devise new incentives and policies.
  • This entails implementing BPO/ITES strategies for talent development, marketing and digital job mapping.

The Business Process Outsourcing and Offshoring sector represents a pivotal facet of the digital economy, poised to, among other factors, mitigate youth unemployment.

This sector epitomises the entrepreneurial spirit of the digital elite, capitalising on online opportunities. Its significance, propelled by global technological shifts and Kenya’s unique geopolitical position, forecasts exponential growth.

This growth owes much to the Kenya Kwanza government's proactive efforts to bolster the nation's digital economy. These initiatives encompass a spectrum of endeavours, from bolstering Information Communication and Digital Economy infrastructure to fostering digital literacy and entrepreneurship among citizens, professionals and public servants.

Moreover, specific policies tailored to support BPOs and IT Enabled Services further fortify this trajectory. All these initiatives align seamlessly with the Strategic Plan 2023-2027 and are reinforced by updated national ICDE sector reforms, driven by a multi-stakeholder consultation consortium known as the Sectoral Working Group.

Yet, to fully harness the economic potential of BPOs, Kenya must address key impediments to sectoral growth. These include deficiencies in basic infrastructure, talent pool, local supplier base, incentive structures, and adherence to labour laws.

Overcoming the infrastructure challenge mandates an expansion of dedicated BPO facilities to enhance Kenya's appeal as a premier BPO destination, despite cost and stability concerns relative to industry giants like India and the Philippines.

Equally pressing is the imperative to cultivate a talent pool that aligns with global standards. The demands of the ITES sector necessitate proficiency not only in technical competencies but also in customer service, language proficiency, and cultural awareness.

Kenya's talent pool, particularly in critical technical areas like Artificial Intelligence, Machine Learning, Analytics and software development, pales in comparison to global leaders, with an annual output of only 66,000 graduates compared to 461,000 in the Philippines. Addressing this deficit requires a concerted effort to provide industry-specific training to new hires.

Despite these challenges, Kenya's BPO sector shows promising signs, as evidenced by the influx of reputable corporate entities establishing local offices. This trend promises reduced scalability and service costs, bolstering the country's BPO capacity. However, it necessitates a review of labour policies to ensure alignment with global trends without compromising national values and economic priorities.

To fully exploit global BPO opportunities, Kenya must devise new incentives and policies. This entails implementing BPO/ITES strategies for talent development, marketing and digital job mapping. Given that global competitors offer specific BPO-related benefits such as training cost reimbursements and incentives for land and building acquisition, the Kenyan government has initiated various strategies.

These include appointing a multi-agency committee to develop a legal and policy framework addressing digital workplace employment issues and supporting local players through start-up initiatives. Additionally, the ministry is crafting a Cabinet Memorandum to formally recognise BPOs and the broader gig economy.

In conclusion, while Kenya's BPO and Offshoring sector faces notable challenges, its trajectory toward growth and development remains promising. By addressing infrastructure gaps, enhancing the talent pool, and aligning policies with global standards, Kenya can position itself as a competitive player in the global BPO landscape.

With continued government support and proactive measures, the country is poised to seize the opportunities presented by the digital economy and drive sustainable economic growth while addressing unemployment.

Cabinet Secretary, Ministry of Information, Communications and the Digital Economy

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