Kenya has the 4th fastest growing digital economy top US university reveals

Kenya has one of the most tech savvy populations in the continent and International mobile firms have been making a killing and using the country as a launching pad of their smart phones across Africa.

Tufts University’s Fletcher School of Business, in its Digital Planet 2017 report collected after a survey of 60 developed and developing countries, says Kenya’s digital economy has high momentum and potential for growth though it is still in its nascent stages.

“This pace of digitalization, which we refer to as momentum, is a lead indicator of a country’s future digital potential and prospects,” says the report.

"Countries with high momentum, such as Kenya, are “highly attractive to investors” the report says.

Globally, China, Malaysia, and Bolivia experienced the fastest digital growth following by Kenya at fourth position and leading in Africa, according to the survey which compiled data from 2008-2015.

Other African countries that were ranked high on the momentum include Morocco (ranked 15th), Cameroon (18th), Nigeria (25th) and South Africa (43rd).

When creating the indices, the researchers assessed the selected countries on four main areas— the robustness of infrastructure; the ability and willingness of consumers to use digital technology; the legal and policy framework; and, the level of innovation and change.

Kenya’s digital economy was largely propelled by its mobile money transfer services, Mpesa which since its invention in 2006 has deeply entrenched itself in the Kenyan economy and continues to spread across the continent and the world.

M-Pesa momentum has also spawned multiple home-grown digital innovations that have gained acceptance and given rise to multinationals such as Craft Silicon and Cellulant.

Kenya and 16 other countries, mostly drawn from Asia and Latin America, were classified as “break out” countries, meaning that while there is rapid advancement, they are “held back often by relatively weak infrastructure and poor institutional quality”.

Although Kenya is growing fast, it still retains one of the lowest levels of development in its tech industry, relative to the more developed nations.

Therefore should these issues be fixed, these countries have the potential to join the ranks of the “stand out” states such as Malaysia, Latvia and the United Arab Emirates.

“Stall out” countries are highly developed such as Sweden, Denmark and South Korea but they have reached a plateau and need to kick-start innovation.

The worst performing countries, placed on the “watch out list” include South Africa and Egypt.

Kenya’s latest performance is an improvement of its 2014 performance where at the time, researchers classed Kenya as a “watch out” country noting that despite M-Pesa, the country was not growing fast enough and that it was plagued by infrastructural challenges.

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