Green business: potential for application as a business innovation for wealth and employment creation in Kenya
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Kenya has one of the highest unemployment rates in the world. Available data indicate that unemployment in Kenya was 40% in 2011 up from 12.7% in 2006 (KNBS, 2011). This data is an indication of the sorry state of unemployment in Kenya. The situation is getting worse over time. To change this, businesses, government and individuals must start thinking innovatively. In order to create demand for employment, firms must be profitable and experience growth. This is wealth creation. Unfortunately, growth in many sectors of the Kenyan economy has stagnated. This has been due to suppressed demand due to rising inflation, contraction of export markets due to the economic crunch in the west and rising conditionalities being imposed on local producers aiming to export to the western markets. Schumpeter (1943) attributes profit to dynamic changes resulting from an innovation. To become profitable and hence grow, firms must become innovative. Firms can adopt green environment creatively to gain a competitive advantage. Studies have shown that firms can gain in two ways; by driving cost efficiencies and by generating top-line growth. That ultimately contributes to the bottom line. Two theories will be used to provide insights on why firms adopt environmental management practices. The economic approach describes firms’ adoption behavior as driven by performance outcomes and institutional sociology theory through which firms respond to institutional pressures. This paper will analyze the potential contribution that adoption of green environment by businesses can have to wealth and employment creation in Kenya. Keywords: environment, sustainable development, unemployment, innovation, organizational performance.