The American Cliche

Why playing by the rules makes a country competitive. Published in the Business Daily on 12 November 2013 at http://www.businessdailyafrica.com/Opinion-and-Analysis/Bureaucracy--corruption-fuel-clich--US-is-the-land/-/539548/2069262/-/47j2bvz/-/index.html

I’m typically not one for clichés, especially those that have been told over and over ad infinitum, and which are supposedly on the cusp of becoming irrelevant. The past two weeks, though, have given me the chance to interact with the classic cliché – that of the Land of Opportunity – and to help the thought process of what Kenya needs to ensure that it positions itself as the go-to location for young people with ideas.

I have been on a tour of the United States, shooting what will eventually be a television news special about technology corridors and the interaction between academia, government and private corporations. (The television programmes will be coming to an NTV screen near you – I promise to let you know when well in advance). The tour has been an enlightening (and exhausting) one, taking my cameraman Steve Mwei and I from Northern Virginia, through the Research Triangle Park in North Carolina, and now winding up in Boston in Massachusetts, where Harvard University and the Massachusetts Institute of Technology helm an ecosystem of high-tech companies, researchers, financiers and government enablers.

And here in Boston is where I met the walking cliché. Maja Drolec is a slender, charmingly-accented immigrant from Slovenia, who has begun – with her partners – a company named Celtra Inc. Celtra is one of those companies whose main business is difficult to explain to your mother – in very basic terms, it makes mobile phone graphics that are useful for the advertising of movies and other entertainment. If you are at home and intend to go to a movie theatre and are busy looking up the best film to watch, you can call up some of Celtra’s services on your smartphone, and be able to see trailers, interactive content and other content that may convince you to watch one film and not another. It sounds lightweight, until Maja tells you that the company is on course for $20 million dollars in annual revenues, and that the business commands almost 100% margins.

The company, which is hosted in a Nailab/ iHub-type office named the Cambridge Innovation Center, started as an idea between Maja and two of her compatriots, and they are now looking keenly at how to expand the business and whether to explore new ideas in an environment that is keenly nurturing to such companies and individuals.

But it’s when I asked her why she opted to set up in the United States and not in her native Slovenia that my ears pricked up. Beyond the 315-million-odd size of the market, Maja told me: ‘We in Eastern Europe like to say that the law runs the state. But that’s not really the truth. With the ethics and just the way business is done means that you cannot really trust people – that they’ll pay you on time; that they will stick to their contracts, and that can take up a lot of [your] energy and time if you need to be dealing with those kind of issues. Here [in the United States], you do pay a lot for professional services such as consultancy, legal fees and recruitment fees. But when you go by the book, things come back to you in a very nice way. All the Slovenians here had a culture shock – [in Eastern Europe] a lot of the stuff can be done [off] the books, but it comes back to really hurt you. It feels good knowing that if you play by the book, you will be rewarded for it. You can compete with anyone and pretty much be at par’.

Does the Eastern European scenario sound painfully familiar? Kenya has, for a long time, been a two-tier society and economy. There is the shiny, rule-based system, which we are happy to show foreigners and investors (and especially foreign investors). We are busy reforming processes such as company registration, legal procedures and investor protections. But ask any businessperson (heck, any Kenyan) and they will regale you with tales of off-book procedures and officials. Everyone knows how to acquire the relevant licences and permissions without necessarily following procedure, and it is the shortsighted businessperson who does not have the numbers of the OCPD and county/ city council official saved on their phone.

The off-book processes do move things along when certain processes get stuck, but the sheer energy of having to familiarise oneself with the underground regulatory environment saps the necessary vitality required to actually grow businesses (anything from a food kiosk to a cutting-edge tech business). If Eastern Europeans, who have the run of the world when it comes to choices of doing business, are still opting for an old-world country like America to be the host of their dreams and ideas, it is not hard to imagine young Kenyans also thinking the same.

And thus will a tired old – but very true – cliché of the land of opportunity be perpetuated.