Varsity Graduates Stir Business Potential

Published on 21st July 2008

Most articles published in reputable journals and other literary works always portray Africa as an economic failure. Peering at Africa using these rather dim lenses, one will definitely fail to see and appreciate the vast entrepreneurial spirit latent in the continent. The fact that this entrepreneurial culture many not conform to the conventional business practice does not mean that it does not exist.  The strength of local entrepreneurship lies in the “ I can do it” spirit and resilience.

Intense debates on whether the education systems in the continent should be hands-on (technical) or academic oriented have been going on.  Despite the numerous educational reforms and the frequent reviews of syllabi, which are purportedly aimed and bolstering the continent’s human capital, actual progress in economic growth and development has remained muted.

What then could be amiss? Could we be too preoccupied with bolstering the continent’s human capital that we have failed to capitalise on individual entrepreneurial efforts that saw economies experience growth in the 1970s and 1980s, despite the recession?

University graduates from Central Kenya have realised that securing white collar jobs is an uphill task. They are filing their degree certificates, rolling up their sleeves and establishing businesses in their local regions.  Using a combination of inherent business acumen and knowledge acquired in college, they set out to establish profitable businesses that are today turning around the economy of rural Central Province of Kenya.

Central Province

Central province is a hot bed of entrepreneurial spirit in Kenya. It has a population of 3,556,047 people, most of whom rely on small-scale farming of cash crops such as tea, coffee, pyrethrum and horticulture.  They also practise small-scale dairy and poultry farming.  The region is considered to be one of the wealthiest in the country.  However, despite its wealth, the region’s vulnerability to economic crises was revealed in the 1980s and 1990s when primary crop production collapsed.  The crises demonstrated that agriculture alone cannot sustain the people’s way of life. Some form of industrialisation and tertiary services were needed to absorb surplus labour from rural agriculture and to add value to agricultural products so that they can fetch better prices in local and international markets.  An integrated economy that combines both agriculture and industrialisation is therefore required to address the two major problems of unemployment and poverty in the region.

From the outset, it is important to note that some form of manufacturing and tertiary activities take place in rural central Kenya. This process of industrialisation is stimulated by individual entrepreneurial efforts, cooperatives, large firm externalisation policies and, to some extent, government policy through Kenya Industrial Estates (KIE.)

Until recently, the typical entrepreneurs in rural Central Kenya comprised of uneducated, unskilled individuals or retirees. This situation is however changing as more university-educated entrepreneurs make forays into the rural economy.

The new entrepreneurs and changing paradigms

The entry of university graduates into entrepreneurship is somewhat surprising as most of them were orientated to secure managerial jobs in the public and private sectors where they gave orders and instructed others on what was to be done rather than doing it themselves.  Rarely were they involved in the actual production.  In the public service, they entered employment at job group J, which involved supervisory or managerial responsibilities.  Most of the jobs ‘suitable’ for graduates were based in the city or at the district or division headquarters. The typical of a university graduate was an employee rather than an entrepreneur and had to work in towns or in the city.

Highly educated Africans joined politics for money and prestige.  Those who went into business did so as a last resort while for others, going into business was a stepping-stone or gateway to politics .  In the absence of highly-educated entrepreneurs, relatively unskilled and uneducated individuals operating small businesses dominated entrepreneurship. 

The non-involvement of graduates in entrepreneurship could be due to the fact that incentives for university graduates starting businesses in the rural areas are considerably low compared to those accruing from employment.  Further, higher education is seen as ticket out of the struggles and problems associated with rural life.  It is supposed to open up the floodgates of affluence associated with city life.  The assurance of a good life and job opportunities offered by university education is perhaps what stifles the development of an entrepreneurial culture among graduates that would help them identify and exploit new economic opportunities.

However, this stereotype of a university graduate is gradually changing.  The 1990s saw an upsurge of university graduate entrepreneurs founding enterprises in little known rural towns in central province.  Indeed, nearly 6% of surveys of 278 MSE founders in central province were university graduates drawn from different disciplines.  The presence of university graduates in rural Central Kenya is somewhat strange because, historically, a highly educated labour force from the region migrated to Nairobi and other major towns to seek employment.  The then stable job market for university graduates declined in the 1990s after the World Bank introduced the Structural Adjustment Programmes to the continent, making it difficult for graduates to secure jobs, while a good number of those who were already employed were retrenched.  As a result it became increasingly evident that an entrepreneurial career where one was his or her own boss was a more worthwhile pursuit.

Next week, we shall examine the characteristics of these university graduates; why they are setting up businesses in rural settings and the changes they have brought into the region.

By Mary Njeri Kinyanjui, Institute for Development Studies, University of Nairobi


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