KenCall Again

Approximately nobody seems to have understood what I was trying to say about KenCall yesterday. In retrospect, that's because I didn't actually say what I was trying to say. What I was trying to say, however, was that it seemed to me that either the government of Kenya or else Tom Friedman was making a mistake about what the real obstacle was to Kenya becoming a major IT outsourcing destination. The problematic phrase, to me, was this: "the Kenyan government is now working feverishly to get connected to the global fiber-optic network, via an undersea cable, which would make bandwidth here cheap and plentiful enough for all sorts of outsourcing."

Friedman is portraying the issue as one in which Kenya needs to build better broadband access, and then the IT jobs would come. The counterpoint I meant to make was that the real chokepoint here seemed to me to be the Kenyan education system. Only a very small proportion of Kenyans are qualified for KenCall-style jobs. At the moment, only a small proportion of the qualified people can get KenCall-style jobs precisely because the physical infrastructure to easily set up competing firms isn't there, which makes wages low by world standards which makes Kenya an attractive outsourcing destination. Build more infrastructure, you'll get more firms, the labor market will tighten, wages will go up, and then growth will slow down as future outsourcers look to other, cheaper countries.

That's all fine as far as it goes. My only observation was that insofar as only a very small proportion of Kenyans are qualified for these sort of jobs, it won't actually go very far. Kenya not only needs more infrastructure, it needs more workers qualified for these sort of jobs. Dan Drezner writes that "market signals about the increasing returns to education would encourage an expansion of educated individuals."

This, to me, seems slightly backwards. As I see it, improving school systems is hard and education levels often don't improve even when market incentives to do so exist. Increasing internet connectivity is, by contrast, relatively easy to accomplish and relatively more responsive to market signals. I have no doubt that countries that produce large pools of workers well-suited to IT work that market signals will cause companies to invest in expanding the IT infrastructure necessary to employ those workers profitably. I'm not by any means certain that the mere existence of remunerative labor market opportunities for well-educated Kenyans will cause the number of such Kenyans to spontaneously increase.