Laptop production in Kenya

There's been an ongoing discussion over the past year about getting one laptop to every child in Kenya and how the ICT industry here thinks about that.  Many people feel that, to the degree that this is a good idea at all, laptops should be assembled in Kenya.  I don't agree and below is a summary of the thoughts I posted to that group.

Supporting industry and helping kids with a final product are two independent things.  The more money that goes into spinning up manufacturing capacity, the less money that goes into getting the technology to the kids.  Kenya can't magically produce laptops cheaper than China can.

Kenya has no chance of having a meaningful laptop assembly capacity because it doesn't have the economies of scale that East Asia has.  Europe and the US are giving lots of technology to their children and none of that stuff is produced in-country because manufacturing plants can't exist in isolation.  

A laptop assembly plant is just one of dozens of plants (chemical manufacturing, plastic-shaping, aluminum foundries, LED, etc...) needed in close proximity to each other just to create the first laptop.  Having a laptop assembly plant in Kenya and all the preceding plants stay in China isn't economically viable.  And also, if the plant is only creating a few million laptops, it's doubly not viable.  It has to produce more like 10M/year and in order to do that and so the plants would need to export those laptops.  Where are these laptops going to be exported to and how?  Is a typical Rwandan going to buy a Kenyan laptop over a Chinese one?  Maybe, just maybe, with a solid $5-$10B of pure investment Kenya could get a real industry going but then to what end?  Computer manufacturing has already plateaued (currently one computer produced for every 20 people each year) and it's agreed that future growth will happen in tablets and mobiles where most of the value is in commodities and intellectual property, not assembly line labor.  Tablet sales are already 60% of computer sales and the industry is seeing 50% YoY growth.

Kenya has all the raw ingredients to leapfrog manufacturing and go straight to a knowledge economy - it just needs to invest deeply in its children through strong, universal education.  Having young people working on assembly lines is not a way to empower youth.

Editor's Note: A previous version of this post said 'South East Asia'.  I meant to say 'East Asia'.
6 responses
That nail has been hit squarely on the head. Production of the hardware is something that I doubt we could be able to do at a low enough rate to justify setting up the plants. Training technicians to service and repair the machines is something else entirely and one that I think provides ample opportunity as will software development around these devices. I find it worrying that no-one seems to be talking about that, just the same way there was no serious discussion on the form factors etc of the devices. Who is going to provide the software and learning materials for these devices?
Yup, economies of scale are real and it would be odd to have virtually all the laptops in the world built in East Asia and then a random plant in Kenya for the Kenyan market. I can only imagine how much that would cost in hidden subsidies to make it work.
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