Policy Brief No. 98 of 2019-2020 on Technology Acquisition and Innovations in Kenya's Informal Sector

Abstract

The informal sector accounts for about 75 per cent of Micro, Small and Medium Enterprises (MSMEs) according to the Kenya National Bureau of Statistics (KNBS). The sector is hampered by slow growth rate, lack of finances and low productivity. In addition, majority of the workers are women and youth with low educational attainment. Despite the notable informality in the sector, technological advances and innovation have been witnessed across the board. According to the Global Competitive Report, Kenya was ranked third in Africa in the 2018 Global Innovation Index and the second most innovative country in Africa in 2017. Despite Kenya’s comprehensive policy and institutional framework, the use of innovations and technology is seldom applied in firms. This situation is worse in the informal sector compared to the formal. The effectiveness of the current policy innovation and technological intervention is inadequate in many ways, particularly with regard to the informal sector...