Technology can open new export markets

Tuesday December 3 2019

Technology developers at Design Hub in Kampala.

Technology developers at Design Hub in Kampala. PHOTO BY RACHEL MABALA 

By Eronie Kamukama

The Information Technology (IT) sector is quite confident that it is ready to export services to Europe. According to the ICT Association of Uganda, two local companies were recently in Finland trying to win businesses over and to sell their innovations to potential partners.
It is a move the sector believes should enable companies increase their annual revenue.

“This sector is dominated by young people. We have those who are very technically competent but are not strong on running businesses. They do not have the market connections and opportunities to meet potential customers. So we are working with them to ensure they are registered, keep proper records, pay taxes and get international certifications to help them talk to international investors,” Mr Albert Mucunguzi, chairman ICT Association of Uganda (ICTAU) said during the SWARM summit and technology expo.

Together with the International Trade Centre, the sector is implementing the Netherlands Trust Fund IV, an export promotion programme to expose 100 local IT companies to business opportunities across the world.

On the other hand, there is a particular worry in the Netherlands Trust Fund (NTF) IV programme this year about local companies following a quick response by companies to enlist to be part of the export process.

Misconception
“There have been challenges in terms of who is the decision maker of going through the export market planning. Many companies also think that to export, they need a vast amount of resources.
What is most important is networking and demonstrating that what you have to offer is meaningful to whatever market you are interested in,” Mr Joseph Walusimbi, National Consultant NTF IV said.

Other challenges have to do with the way companies are organised and the way they are structured at the point of enlisting is not favourable for the export agenda.

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“There are certain decisions which could be hard to make to be able to fit in. It could be processes, for example, you will find that some of these companies have products to offer but have to demonstrate that they are of quality, meaning they have to go through the International Organisation of Standardisation (ISO) process but once they hear about ISO, they pull back,” Mr Walusimbi said.

For some companies, there is a good chance that a lot can be achieved given Uganda’s unique position.

“What we offer a company coming out of Europe is the extra local knowledge. We can deal with the problems here better than Europe. We can match up with the quality that is expected of international companies but at the same time provide the same at lower costs because of where we are located,” Mr Simon Lwanjo, chief executive officer Preg-Tech Communications, said.

Other players believe growing IT exports to continents beyond Africa must happen alongside certain adjustments within companies.

Quality issues
“Africa can be cheaper. But it is not a place with a long IT history. So competing on quality will be very difficult and yet quality is key; nobody likes faulty products or software. Ultimately, it is price and Uganda has something to offer given how many young people are eager to develop.”

To be able to compete on the export market, “You cannot only compete on price. Quality has to be at a certain level and that requires you as a company to invest meticulously not just at the beginning but for the long-term,” Bram Van den Bosch, managing director Laboremus said.

Software developers team up
Summing up the conversation with its experience, technology company Tunga said as the sector speeds up the export process, teams of IT developers must find a way to fit in the global market without harming their revenue.

“As a company, you have to find out what your equilibrium will be. We started out as a platform where software developers could do just one job. So you would have one feature you want to develop and it did not work. Then we started to do software projects for companies but we find that it is a difficult way to get a good margin. We are now moving now to providing dedicated teams of developers. So you constantly have to keep moving and find what works for you,” Reinier Van Scherpenzeel, chief executive officer Tunga said.

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