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Callcentering Your Way to Prosperity

By Matthew Yglesias

"Callcentering Your Way to Prosperity"

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Tom Friedman returns to his roots, hyping globalization success stories. Today’s edition focuses on KenCall, which does call center and related kinds of offshore outsourcing for American firms. Like any good offshoring scheme, it exploits a large wage wedge. “KenCall’s employees can make in a month what half of Kenya’s population makes in a year: around $350,” writes Friedman, “They get health care and free transportation.” In short, by Kenyan standards this is a good job to have, but it’s still way cheaper than hiring anyone in the first world. The founders are “the half-English, half-Kenyan Nicholas Nesbitt, his brother Eric and his brother-in-law Stephen Liggins” who made money on Wall Street and then “decided to come home and see if they could do good for their country and for themselves by taking advantage of Kenya’s large pool of educated, English-speaking talent to break into the outsourcing industry.”

One problem was that Kenya didn’t have an undersea fiber-optic connection, so you needed satellite internet “which is more expensive to begin with and was made even more so by the fact that the Kenyan state phone company had a monopoly.” The government opened satellite internet up to competition so the overhead got cheap enough to make the venture profitable and they did it. Now “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.”

Suppose the government succeeds, though, what happens next? The reason KenCall works is that its wages are so low. Its wages, in turn, are low because in Kenya at the moment the IT infrastructure necessary to operate a call center is very scarce relative to the level of English competency necessary to work in one. If an undersea cable makes it significantly easier to start up call centers, that may change. It all depends on how large Kenya’s “large pool of educated, English-speaking talent” really is. Wikipedia says two percent of Kenyans get higher education, and about 43 percent of the population is under 14, so the pool isn’t actually that huge. And, yes, it seems you need to go to college to work in a KenCall call center.

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