Responses off micro and small enterprises to business opportunities in Kenya:The case of metal workers in Gikomba Jua-Kali in Nairobi

Abstract

Micro and Small Enterprises (MSEs) has become a major contributor to the world‟s economy. Many countries have embraced the sector as a significant contributor in employment creation, Gross Domestic Produce and a pool from which medium size and large firms can develop. The way in which the sector interacts with their business environment, and their continued survival and development has been the subject of debate for along time. In Kenya, Micro and Small Enterprises cut across all sectors of the economy and provide one of the most prolific sources of employment. A lot of business opportunities have been presented by Kenyan environment, and MSEs are expected to appropriately respond and grow. This Report was a study of the responses of MSEs to their environmental opportunities, and its objective was to determine how Kenyan Small and Micro Enterprises respond. A survey method was used to study enterprises dealing in metal-works in Gikomba Jua- Kali area in Nairobi. Their responses were considered appropriate for generalization due to their strategic location and the overwhelming attention they have received from the Government and private sector. The study found out that several internal and external factors in the environment determine the identification and choice of an opportunity to be exploited by an entrepreneur. These include age of the entrepreneur, availability of capital, security etc. In responding to opportunities, strategic thought was found among proprietors except they were not written down. MSEs were found to respond to the opportunities by choosing to follow strategies peculiar to them such as networking and flexibility. Some elements of Michael Porter‟s generic strategies were also identified to be used by entrepreneurs in the sector. Operational responses to opportunities were found to be spontaneous as most MSEs are a one–man-show. The study recommended that support be given to this sector in form of skills development programmes, culture change programmes and financial and marketing support. Further studies are required to cover other constituencies of MSEs on the same subject given that the sector is very wide by definition.