KONZA CITY & SILICON VALLEY: HOW CITIES ARE FORMED.
Cities the world over are mainly formed when a society finds value in pooling resources together so that benefits such as security, proximity to goods and services, ease of exchange of ideas , infrastructure are economically shared.
These benefits lower the factors of production. This in turn enables the society to produce goods and services at competitive prices and trade the surplus with other cities.
Cities grow over time as they attract more population and ensure infrastructure and human resource is perfected to lower productivity.
Nairobi City for example, started out as a railway camp for the British colonialists. The railway attracted a population which necessitated a need for housing, hotels and commercial centers. British colonialists moved their administration form Mombasa to Nairobi, thereby spurning more growth. This growth has continued gradually till today.
Laws have been set up by the Ministry of Local Government to ensure developers lay infrastructure[roads,sewer,drainage,water] before land is subdivided and titles issued. This has made Nairobi City expand and appreciate in value as compared to other African cities such as Kampala.
With the infrastructure growing in tandem to population growth and driven by the private sector, Nairobi has continued to attract Investors.
Other major cities in Kenya, Mombasa and Kisumu have largely followed the same model.
New towns such as Kitengela and Ongata Rongai have largely increases since 2002. This could be largely due to Central bank reduction of base lending rate hence easy availability of finance after a long period of low investment in real estate due to high interest rates. This long period created a high demand for housing hence proliferation of these new towns.
Silicon Valley History.
Silicon Valley city is largely hinged on the ICT savvy populations attracted by Stanford University. The students and professors here have spearheaded innovation in ICT and set up offices and factories within the proximity of Stanford where they can easily exchange ideas and pool other resources that aid in production. The ICT savvy pool of talent has spurned the city’s growth into what we see as Silicon Valley.
Stanford university in the 1890s began shaping its students into solidarity. In 1909, Stanford put up a USD 500 venture capital fund for innovations. This led to the invention of the vacuum tube.
In the 1940s and 50s, Stanford University increased its nurturing of students into self-reliance and set up the Stanford University Industrial Park. After World War 2, there was high demand from returning students. Stanford University began to lease its land to Technology based companies to create employment. Such companies are Kodak ,Intel and HP.
HP first started in the 1930s in the garage of Hewlett and Packard’s residential home and later on moved to the Stanford University Industrial park in the 1950s.
Silicon-based microchips were pioneered and developed from here hence the name Silicon Valley.
In the 1970s, law firms, venture capitalists and banks moved in to cash in on the talent. This mixture developed into what we see as Silicon valley today, housing the world’s leading ICT Firms such as HP,Apple,Yahoo,Sandisck and Google.
The availability of talent and funds to sponsor the talent attracted more and more ICT players into Silicon Valley, creating a mega-city based on ICT especially after the 1.3 Billion USD IPO on Apple Inc. in 1980.
Therefore, Silicon Valley success is as a result of over 100 years of existence, just like Nairobi City.
Sophia Antipolis, France.History.
This city was started between 1970 to 1984. It is hinged on University of Nice-Sophia Antipolis which has a history dating from 1635.
Large corporate in the field of Technology such as HP,Air France and France Telkom are headquartered there.
Therefore, Sophia Antipolis as an ICT hub benefits from the 300 year University of Nice-Sophia Antipolis investment in human resources.
Urban areas and Slums.
As mentioned earlier, cities are formed when a society finds value in pooling resources together, hence reducing cost of production. When cost of production is high, cities loose competitiveness.
In all high cost estates in Nairobi, there will be a slum which sustains the high cost area with cheap labour.
For instance, Mathare serves Muthaiga.
Kibera serves Langata,Golf course estate,KNH and Ngong road.
Kuwinda serves Karen.
Githogoro serves Runda.
Lavington is served by Kawangware.
On an international Scale,
Bombay has the Bharavi.
Rio has the Favelas.
The Bronx in New York .
London had its East End.
Removal of slums is a whole subject into itself and cannot be dealt with by simply just ensuring a buffer zone around an urban area.
Konza city’s idea of creating a 10km buffer zone to keep off slums will in turn increase productivity hence unsustainability. Another method of ensuring this should be re-looked by Ministry of Information and their advisors, Worldbank/IFC.
Some countries have tried to create perfect cities in the past as laid down below.
Gujarat International Finance Tec-City.
This city is under construction in Gujarat, India. It was conceived in 2007.
This was proposed in 2006 and failed to start 4 years later which followed cancelation of the project.
This city is in Malaysia, 25 km from Kuala Lumpur. Its mainly driven by Government which relocated operations form Kuala Lumpur in 1999 due to congestion.
Its population is 30,000, mainly civil servants.
The ambitious project stalled in 2009 after the world financial crisis.
Universities as sources of talent.
Konza City and Ministry of Information advisors, Worldbank/IFC should learn from previous city creations as outlined above.
The most successful ICT cities such as Silicon Valley and Sophia Antipolis are hinged on a pre-existing University which has for over the years, attracted and nurtured human resource . This pool of talent in turn attracts venture capitalists who together form some of the world’s greatest ICT products and services.
In the successful cities such as Silicon Valley and Sophia Antipolis, universities have first nurtured enough talent. This talent attracts investors, mostly venture capitalists. Once the talent is funded, World-class ICT companies are born out of this.
Konza City as an ICT Hub.
In Konza City, there is no pre-existing University to supply the talent needed. Universities have been proposed to be built at Konza. Construction of these universities can take 5 years at the least. Attracting talent in terms of lecturers and students should take another 5 to 10 years. Nurturing the talent in such a way that inventions worthy of funding are conceptualized/developed would take another 10 years.
In total, this will take a minimum of 20 years for Konza city to have developed universities that attract the right talent that can be funded into ICT products. Konza city as an ICT City is viable in the very long term-20 years .
Konza City as a Real Estate venture.
Konza city as a low-cost real estate venture is viable. Konza area is the only remaining low-priced vacant land near Nairobi. As long as the prices of land in Konza play with the market rates, Konza City will attract real estate investors.
If prices are pushed upwards, Konza will start competing with other areas 60 km from Nairobi such as Thika, Kangundo,Kijabe whose price per acre is currently higher than Konza’s.
With the current Konza hype, land price might overtake these areas hence opening up to competition.
If infrastructure such as roads ,water, drainage, electricity and sewer is laid in Konza, high prices will still attract investors because of the value addition.
The Ministry of Information advisory team.Wordbank/IFC should look into reasons why some cities such as the ones described above failed to make it and why others were successful.
The result is what should be used to shape up Konza City in such a manner that Kenyans do not loose their hard earned tax payer money.
Konza City as a Ministry of Information project and with advisory from Worldbank/IFC will need to open up and allow for public to scrutinize all information.
For starters, more detailed content should be posted on the Konza city website.
Consultancy fees:Worldbank/IFC and London based Engineers.
Information such as why,how and the details of Ministry of Information hiring the services of Worldbank/IFC and London based Engineers should be made available for the public to see how their tax payer money will be utilized in paying for these services.
Ministry of Information and the Worldbank/IFC should also make public the detailed information on how they intend to allocate land to potential investors now that they are not keen to following the Public Procurement and Disposal Act that allows for transparency and competition.
It’s very obvious that with the demand for land very high in Nairobi, there will be over-subscription and competition. Information on how Ministry of Information will decide to allocate land to investor A instead of B and C will be crucial for the Kenyan tax payer to understand how his money will be used.
Kenya’s Attorney General has opined that the land should be allocated competitively using the Public procurement and Disposal act as opposed to the negotiation method suggested by Ministry of Information/Worldbank/IFC advisory.
Architect Francis Gichuhi Kamau.