Entrepreneurship Challenges in Developing Economies: a case of Kenyan Economy

Abstract

ABSTRACT For years, economists viewed entrepreneurship as a small part of economic activity. But in the 1800s, the Austrian School of Economics was the first to recognize the entrepreneur as the person having the central role in all economic activity. This is because it's entrepreneurial energy, creativity and motivation that trigger the production and sale of new products and services. It is the entrepreneur who undertakes the risk of the enterprise in search of profit and who seeks opportunities to profit by satisfying as yet unsatisfied needs. The purpose of this paper was to determine the level of Kenya’s economy as compared to other developed economies in terms of entrepreneurial development and the way forward to propel her economy. Data for this study was sourced entirely from secondary sources. Analysis of data was done using tables and simple averages. The study realised that the level of Kenya’s economy would not match with other developed economies due to underutilisation of entrepreneurial resources. The study starts by defining ideal situation of entrepreneurship, and gives key concepts of a successful entrepreneur. Kenya recognises entrepreneurs as prime movers of the economy but little has been done by Kenyan entrepreneurs as compared by developed economies to in developing the economy. To catch up with other developed economies in terms of entrepreneurship this paper proposes ways forward for entrepreneurship development which may lead to economic development. The study recommends that Kenya as an economy would be at par with other developed economies like China, if entrepreneurial resources were to be utilised well. Key words: Entrepreneurship, creativity, vocational training, working capital Introduction The World Bank rates Kenya as the 17th poorest nation in the world (1+996). However, it fares fairly well when compared to its immediate neighbours. Kenya, the regional hub for trade and finance in East Africa, is hampered by corruption and reliance upon several primary goods whose prices remain low. Following strong economic growth in 1995 and 1996, Kenya's economy has stagnated, with GDP growth failing to keep up with the rate of population growth. In 1997, the IMF suspended Kenya's Enhanced Structural Adjustment Program due to the government's failure to maintain reforms and curb corruption. A severe drought from 1999 to 2000 compounded Kenya's problems, causing water and energy rationing and reducing agricultural output. As a result, GDP contracted by 0.3% in 2000. Kenya as a country has not done much in terms of development due to lagging behind in terms of entrepreneurship promotion as this paper is to find out. 264