Entrepreneurship plays an important role in the socio-economic development of the country. Its significance can be seen in terms of contribution towards economic growth, employment creation, poverty reduction and development of an industrial base. Kenya is going through a paradigm shift from an industry based economy to a knowledge based economy anchored on ICT. The government has reiterated the development of ICT industry in the country given its strategic importance. These commitments manifest in the various policies and strategies that the government has put in place over time, aimed at the growth and expansion of ICT in the country. Despite the policy and strategy pronouncements, there are various constraints that are currently facing the growth and expansion of ICT in the country especially amongst ICT providers.
This study sought to assess the factors that affect the growth of ICT firms in Kenya by focusing on the ICT providers in Nairobi. The Purpose of the study was to establish the factors affecting growth of ICT Firms in Nairobi. The study involved a case study of ICT firms in Nairobi. The target population constituted ICT service providers located in Nairobi. The study targeted 92 firms out of 304 registered ICT service providers in the CCK database. The sampling frame used was acquired from the CCK directory of licensed ICT providers 2012. Stratified random sampling technique was used based on categories of ICT service providers registered by CCK. Questionnaires were used to collect data from a sample of 92 ICT Firms. The respondents were owner/ managers and selected employees. The study findings indicate that access to markets significantly affects growth of ICT firms negatively or positively. Access to market information, The presence of a wide market for ICT products and services, ICT usage and penetration and presence of ICT-related services promote growth and expansion of ICT firms. Competition in the ICT sector inhibits growth of ICT firms. The study recommends the following: Pertaining access to markets; the government should undertake to make markets work. This can be achieved by promoting the number and competitiveness of ICT firms by reducing the cost of doing business and, generally, creating a more favourable environment for businesses to thrive while improving the quality of employment in the sector. The government should allocate at least 25 percent of its procurement requirements to the sector. The Government should encourage sub-contracting arrangements between large and medium firms, and the SMEs. Capacity building of SME Associations will further promote business linkages within the sector. The Government should restrict dumping of ICT products and facilitate marketing of SME products in both local and international markets.
Casson, M. (2003). The Entrepreneur: An Economic Theory .University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship. Available at SSRN: http://ssrn.com/abstract=1496173
Chandler, A.D. 1977. Information technology: the visible and new competitive weapon. Cambridge: Belknap press.
Duncombe, R., & Heeks, R., (2005). “Information, ICTs and Small Enterprise: Findings from Botswana”, Development Informatics, Working Paper Series, Institute for Development Policy and Management, University of Manchester.
Garikai, B.W. (2011). Growth of SMEs in Developing Nations: Special Reference to AGOA. COMESA, Lusaka. Zambia.
Government of Kenya (2005). Development of Micro and Small Enterprises for Wealth and Employment Creation for Poverty Reduction: Sessional Paper No. 2 of 2005. Government Printer. Nairobi, Kenya.
Government of Kenya (2008). Kenya Vision 2030; The Popular Version. Government Printer. Nairobi, Kenya.
Government of Kenya (2013). National Information & Communications Technology (ICT) Master plan 2013-2017. Kenya ICT Board. Government Printer. Nairobi, Kenya.
Indarti, N. & Langenberg, M. (2004). Factors Affecting Business Success among SMEs: Empirical Evidences from Indonesia. University of Twente, Enschede, Netherlands.
Jun MI and LIjun CAO (2007). “Study on the Ecological Mechanism of Growth of SMEs,” School of Management, Shanxi University, Taiyuan, P.R.China.
Kibera and Kibera (1997). Constraints to Small Business Growth: Entrepreneurship and Small Business Growth in Uganda. Makerere University. Kampala.
Miles, P. (2001). Globalization- Economic Growth and Development and Development Indicators, Planet Papers, Oxford Press, New York.
Mugenda, O.M. & Mugenda, A.G. (2003). Research Methods: Quantitative and Qualitative approaches. ACTS Press. Nairobi.
Omar, S. et al (2009). “The Background and Challenges Faced by the Small Medium Enterprises. A Human Resource Development Perspective.” In International Journal of Business and Management. October, 2009.95. Vol. 4. No. 10.
Saunders, M. et al (2009). Research Methods for Business Students. Harlow: Prentice Hall. Upper Saddle River, New Jersey, USA.
Scarpetta, S. et al (2002). The Role of Policy and Institutions for Productivity and Firm Dynamics: Evidence from Micro and Industry Data. Economics Department Working Papers, No. 329. OECD. Paris.
Sewe (2010). Factors affecting the strategic growth of Information Communication Technology (ICT) in Kenya. United States International University. Nairobi.
Timmons, J. et al. (2004). Business Plans That Work: A Guide for Small Business. McGraw Hill.
UNPAN (2005). “Global E-government Readiness Report: From E-government to E-Inclusion, UNPAN, Geneva
UNPAN (2005). “Global E-government Readiness Report: From E-government to E-Inclusion, UNPAN, Geneva
Copyright: © 2013 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
