Globalization, Economic Inclusion and African Workers

Making the Right Connections

Kate Meagher, Laura Mann, Maxim Bolt, Kate Meagher, Laura Mann, Maxim Bolt

• Editorial: Routledge
• Año: 2018
• ISBN:
  9781315436470
• Edición: 1
• Categoría: Scienze sociali
• Categoría: Studi sullo sviluppo globale

This book addresses the question of whether greater inclusion in the global economy offers a solution to rising unemployment and poverty in contemporary Africa. The authors trace the connection between global demographic change and new mechanisms of economic inclusion via global value chains, digital networks, labour migration, and corporate engagement with the bottom of the pyramid, challenging the claim that African workers have become functionally irrelevant to the global economy. They expose the shift of global demand for African workers from formal to increasingly informalised labour arrangements, mediated by social enterprises, labour brokers, graduate entrepreneurs and grassroots associations. Focusing on global employment connections initiated from above and from below, the authors examine whether global labour linkages increase or reduce problems of vulnerable and unstable working conditions within African countries, and considers the economic and political conditions needed for African workers to capture the gains of inclusion in the global economy. This book was previously published as a special issue of the Journal of Development Studies.

The Domestic Turn: Business Process Outsourcing and the Growing Automation of Kenyan Organisations

LAURA MANN* & MARK GRAHAM**

*African Studies Centre, Leiden, Netherlands, **Oxford Internet Institute and School of Geography and the Environment, University of Oxford, Oxford, United Kingdom

ABSTRACT After observing the growth of the Indian and Filipino Business Process Outsourcing (BPO) sectors, Kenyan policy-makers and managers made substantial investments in international internet infrastructure and BPO marketing campaigns. While observers continue to discuss the sector in terms of its international work opportunities, in recent years the sector has increasingly focused on contracts sourced from Kenyan and other East African clients. The government has also refocused efforts on attracting international BPO companies. This domestic turn signals both the difficulties of gaining access to overseas work due to the power of incumbents and the increasing use of the internet and ICT-enabled automation within Kenyan organisations. In effect, better connectivity has enabled a two-way globalisation of services: Kenyan BPO companies can access international work opportunities but connectivity has also contributed to the inflow of international business practices into Kenya. The conclusion examines what these shifts might entail for the sector and its workers in future.

I. Introduction

Business Process Outsourcing (BPO) can loosely be described as service work contracted out to a third party. The term encompasses a range of activities that include customer service work, data entry, transcription, digitisation, financial accounting, auditing and other higher value-knowledge processing such as content development, animation, legal services, engineering design and data analytics. The BPO sector first emerged in Northern economies in response to deregulation and competitive pressures inducing organisations to restructure, increase efficiencies and maximise shareholder value (Batt & Moynihan, 2002; Davis, 2009). Work tasks that once took place within firms came to be standardised and outsourced to outside organisations, often using information and communication technologies (ICTs). Work was first moved to lower wage areas within national economies (Taylor & Bain, 2008) but by the early 2000s, changing communication capacities had allowed such work to be offshored to countries such as India, the Philippines and China, effectively creating a ‘global’¹ marketplace for services (Dicken, 2003; Bryson, 2007; Malecki & Moriset, 2008). The increasing geographical spread of BPO has resulted both from pressures to reduce costs and from desires by multinational companies (MNCs) to spread risk across markets (Kleibert, 2014).

BPO has been seen to represent very different facets of economic globalisations. On the one hand, it has been described as offering potential developmental benefits, allowing developing countries to leapfrog industrialisation, acquire new skills and capital, and participate in a flatter and more frictionless global economy (Dossani & Kenney, 2007; Friedman, 2006). Fernandez-Stark, Bamber, and Gereffi (2011, p. 1) thus write, ‘the industry provides a clear illustration of how globalisation has provided opportunities for both employment and business formation in developing countries’. However, others have voiced more cautious assessments, stressing that benefits are ‘uncertain and contingent’ (Levy, 2005, p. 691) and that the globalisation of services is likely to benefit more highly skilled groups while weakening the security, economic prospects and bargaining power of less skilled workers (Held, 1999). Anxieties about BPO are particularly pronounced in relation to developed economies where fears of job losses dominate discussions.

Since 2004, Kenyan policy-makers and businesspeople have wanted a share of the market. Many hoped the 2009 arrival of fibre optic internet cables into East Africa would allow these economies to break their dependence on primary commodity exports and use the affordances of better internet connectivity to transition into tertiary and quaternary service sector exports (Graham & Mann, 2013). The original vision for the BPO sector in Kenya was therefore export oriented, Kenyan owned and oriented towards the creation of jobs (Graham, Andersen, & Mann, 2015). Estimates released by the Government of Kenya (2007a, b) predicted the sector would create 20,000 direct BPO jobs and contribute 10 billion Kenyan shillings to GDP (approximately 114 million USD).

Few connected the deeper penetration of high speed internet nor the development of an export-oriented BPO sector with the potential for greater domestic outsourcing within Kenya itself (that is Kenyan BPO companies conducting work for other Kenyan companies). Despite a trend of increasing subcontracting already taking place (Mazumdar & Mazaheri, 2002; Bocquier, 2005), policy-makers and businesspeople conceptualised BPO through the early experiences of India² and the current experience of the Philippines, and not through the experiences of Northern countries, where discussions of BPO have been linked to more negative forms of domestic labour market restructuring.

Drawing on in-depth interviews with 49 BPO managers and policy-makers, this paper examines the development of the Kenyan BPO sector in close detail. We describe some of the difficulties that Kenyan BPO managers have faced in trying to access international work such as lack of managerial experience, lack of personal connections and physical distance from markets. In response, Kenyan based companies have increasingly turned towards Kenyan and East African clients. The Kenyan government has now shifted to promoting higher value IT enabled services (ITES) such as software development and to attracting prominent multinational BPO competitors into Kenya. Policy-makers hope these efforts will position Kenya as a regional ICT and software development hub. While observers continue to discuss the sector in relation to its potential for export-oriented work and international opportunities (Dihel, Fernandes, Gicho, Kashangaki, & Strychacz, 2012; Hope, 2012; Iraki, 2013; Manning, 2013; Wausi, Mgendi, & Ngwenyi, 2013),³ these shifts suggest that we need to rethink how we approach the Kenyan BPO sector. The domestic turn signals both the difficulties of gaining access to digital work overseas due to the power of existing incumbents and to the increasing availability and use of the internet within Kenya. In the conclusion, we discuss what these shifts might mean for the future of the sector and its workers.

The paper draws on the results of a research project carried out by the University of Oxford, the University of Nairobi and the National University of Rwanda over the course of 2012 and 2013.⁴ 41 managers of Kenyan BPO and ITES companies were interviewed in open-ended extended interviews (1–4 hours in length).⁵ A BPO/ITES company was defined as any company that performs or has the potential to perform business processes for clients. The range of participants included aspiring and small-scale BPO/ITES entrepreneurs (self-employed), more established Kenyan companies in the East African Small and Medium Enterprises segment, international companies with Kenyan offices, Kenyan companies working as representatives of international companies, and Kenyan and Indian BPOs operating in the East African and international market. Additional interviews were conducted with the Kenyan ICT Board, the Permanent Secretary of ICT, an advisor to the National Communications Secretariat, the Head of the Communication Workers Union and representatives from kLab, mLab and 88mph (three tech hubs and business accelerator programmes in Nairobi). All 49 interviews were transcribed and coded using a qualitative data analysis software tool.

This analysis was further supplemented by the use of secondary sources like newspaper articles and social media reports, and through on-going communication with research participants. A focus group was held in May 2013, in which research participants were asked to reflect on preliminary findings and to offer their own ideas. With the exception of public statements that have already been made public, the identities of respondents have been anonymised so as to ensure confidentiality. Fieldwork sought to uncover whether or not the arrival of fibre optic internet in 2009 had allowed managers of Kenyan BPO and ITES companies the opportunity to more effectively compete for international BPO contracts and work opportunities. During fieldwork, we discovered that many of the companies included in our sample had refocused towards the domestic market. This paper aims to explain that refocusing and explore its implications.

We first describe the initial hopes for the sector voiced by business people and policy-makers prior to the arrival of fibre optic cables. We then proceed to a discussion of what transpired between 2004 and 2014. Despite substantial investments in infrastructure and marketing, Kenyan BPO firms have struggled to reach into international markets and have increasingly concentrated on local and regional markets.

Sections three to five look at this re-orientation in closer detail. We use the concept of ‘sense-making’ to understand how Kenyan actors responded to these difficulties. The concept of organisational ‘sense-making’ (Weick, 1995) refers to the processes through which individuals attempt to understand uncertain and ambiguous circumstances and make sense of their realities. Sociologists and anthropologists have used the concept to understand how virtual or technologically-mediated communities have built common understandings and practices through geographical proximity and shared cultures (Beunza & Stark, 2003; Corbridge & Thrift, 1994; Cramton, 2001; French & Leyshon, 2004; Kumar, Van Fenema, & Von Glinow, 2009; Marazzi & Mecchia, 2007; Spence & Carter, 2011; Stark, 2009; Steinmueller, 2002). In the case of Kenyan BPO, we show how domestic outsourcing came to be seen as a way of bringing ‘global practices’ into proximate arenas within which Kenyans could make sense of them. The ‘domestic turn’ should thus be understood as an opportunity for Kenyan companies to better position themselves in international BPO networks while capitalising on the deepening of internet penetration and ICT-enabled automation taking place in local markets. While BPO has been touted as a job creator and export earner, the Kenyan sector is now gearing up towards changing local business models and work practices.

In the conclusion, we suggest that this re-orientation should involve a more pragmatic discussion within the country. Specifically, we discuss whether increased domestic outsourcing is likely to increase forward and backward linkages between multinational BPO networks and Kenya’s own national economy, whether these linkages are likely to increase the potentials of disinvestment and relocation or instead increase the potential for economic upgrading within the Kenyan economy and whether or not the sector is likely to provide stable employment prospects for its workers. We draw on the experiences of India and the Philippines to understand these shifts.

II. Visions of the Service Sector in Kenya

In the early 2000s Kenyans began to get interested in BPO. The country needed to create jobs for its growing pool of university graduates, to diminish its dependence on primary commodities and to create export earnings to address its external debt. It was hoped that the BPO sector would help meet all of these objectives by re-orientating the economy away from agriculture and manufacturing and re-positioning Kenya within the global service economy.

On the ground, much small-scale BPO was already taking place. Internet cafés moonlighted as BPO operations afterhours, taking on piecemeal work obtained from online outsourcing platforms like guru.com, odesk.com and elance.⁶ One such operation was E-Business,⁷ a two-person operation founded in 2002 that did online research jobs for foreign clients (Singer, 2006). By 2006 the company had changed its name to Preciss International and had grown its staff to 17, doing a wider range of online tasks. Stories about such companies circulated through the conversations and imaginations of Kenyan businesspeople and policy-makers and provided some justification for optimism about a changing relationship between Kenya and the outside world. A number of more established businesspeople began to make substantial investments.

One such person was Nik Nesbitt, a Kenyan businessman working overseas who had planned to return to Kenya to start a business. BPO seemed perfect; it was aligned with the country’s wider ICT aspirations, it appealed to government and was understood to be a job creator and export earner. Nesbitt founded Kencall in 2005, setting the stage for other professionally orientated BPOs to enter the market. Technobrain, Horizon, Direct Channel, and Adept (among others) all had large workforces, employing 100–500 workers and initially focused on international work. Of the companies listed above, almost all reported close to 100 per cent international⁸ clients before 2009. As the sector began to grow, a Kenyan BPO and Contact Centre Society formed in 2007 and membership soon grew above 30 firms. This association was modelled on India’s NASSCOM and the Philippines’ BPAP, and was intended to bring players together to improve skills, training, government policy and marketing activities.

In 2007 the government named BPO as one of the six pillars of economic growth in its Vision 2030, a national development plan that sought to establish Kenya as a middle-income country by 2030 (Government of Kenya, 2007a, b). Envisioning Kenya to become the top offshoring destination in Africa, it called for the establishment of a 7500 seat BPO park at the Athi-River Export Processing Zone (EPZ), an aggressive marketing campaign, the development of targeted training programmes, the development of a BPO incentive framework and the formulation of BPO and Contact Centre (CC) policy. BPO was estimated to create at least 20,000 direct BPO jobs and contribute 10 billion Kenyan shillings to GDP. The government also established the semi-autonomous Kenya ICT Board to help promote the sector. In 2008, this board launched ‘the Kenyan BPO Value Proposition’ and embarked on an ambitious marketing tour of BPO conferences and trade shows around the world.

In 2009, the government commissioned the consulting company McKinsey to compile a report on Kenya’s niche with...

Índice

• Cover
• Half Title
• Title Page
• Copyright Page
• Contents
• Citation Information
• Introduction: Global Economic Inclusion and African Workers
• The Scramble for Africans: Demography, Globalisation and Africa’s Informal Labour Markets
• ‘Integration’ or ‘Selective Incorporation’? The Modes of Governance in Informal Trading Policy in the Inner City of Johannesburg
• Remaking Africa’s Informal Economies: Youth, Entrepreneurship and the Promise of Inclusion at the Bottom of the Pyramid
• The Domestic Turn: Business Process Outsourcing and the Growing Automation of Kenyan Organisations
• Do Transnational Links Matter after Return? Labour Market Participation among Ghanaian Return Migrants
• Accidental Neoliberalism and the Performance of Management: Hierarchies in Export Agriculture on the Zimbabwean-South African Border
• Resilient Labour: Workplace Regimes, Globalisation and Enclave Development in Swaziland
• Index