Bias for formal jobs hampers growth of entrepreneurship

Young people are brimming with entrepreneurial ideas but growing them into fully fledged businesses is still hampered by a lack of capital, poor co-ordination, and a long-standing culture that puts more emphasis on employment upon completion of formal education.

This was revealed at the Junior Achievement (JA) enterprise exhibition in Nairobi over the weekend which brought together hundreds of high school students from all over the country.

An entrepreneurship programme by Junior Achievement — a non-governmental organisation, promises to instill corporate leadership skills among high school students.

In an exhibition held over the weekend, students who acted as CEOs of their ‘companies’ gave presentations of how they managed their groups.

In a model similar to The Apprentice, the reality television programme hosted by American billionaire investor Donald Trump, the student leaders presented financial reports of their companies, and justified the various executive decisions they took to a panel of judges who were drawn from the private sector.

According to Mr John Wali, the executive director of JA, the students were judged based on their leadership style; which included how they managed conflict within their groups, ensured team work and stimulated ideas, among others elements. In addition, the judges assessed the manner in which they wound down their firms.

By the end of the entrepreneurship programme which ran for several months last year, the student ‘companies’ were to be dissolved and any accruing assets liquidated and added to profits before the sharing of proceeds among members based on shareholding.

Student CEOs who spoke to Business Daily demonstrated good knowledge of their products, their target markets, and solutions consumers are looking for.

Ms Lynda Kalu, the CEO of the Aga Khan Secondary School group, presented and explained a range of products made from parts of the coconut tree, including cakes, cookies, hats, necklaces, and oil.

The award for leadership was a ceremonial trophy to the respective schools and did not come with cash attached to it.

Mr Bill Lay, the General Motors chief executive of and chairman of JA, said the awards, despite being non-monetary, were meant to encourage the students to nurture a spirit of entrepreneurship.

During the exhibition in Nairobi, most of the companies steered by the young people said they had made profits of over 100 per cent by selling simple products in a period spanning several months last year.

The products showcased ranged from personal accessory items made from recyclable materials to food stuffs and stationery.

The students demonstrated a grasp of ideas and products that can offer solutions to communities and turn in a profit but analysts question the progression of the initiatives beyond high school.

Most of the student entrepreneurs told Business Daily they were excited by the experiences in the programmes but said they had their eyes trained on formal employment after pursuing higher education.

However the business ideas could die a young death as regrouping the students to have them mature their businesses is difficult since most pursue different interests after graduating from high school or college.

Mr John Wali, the executive director of JA, said the organization has started an alumni programme to help connect high school graduates who would like to start joint ventures.

Mr Lay, said the initiative is one of several aimed at promoting a culture of entrepreneurship.

Basic principles

“To succeed in business, you’ve got to understand the basic principles. If you don’t, you will not make it however passionate you are about business,” he said, adding that the enterprises stand a better chance of accessing credit after proving their own viability.

Analysts have decried the problem of the current education system that propels learners to seek employment as opposed to setting up their own businesses.

In addition, lack of a systematic entrepreneurial training and the country’s low national savings rate — at about 15 per cent of the GDP against the government’s target of at least 25 per cent — have been cited as factors slowing down economic growth.

Entrepreneurial training is currently offered by different organisations, including banks focusing on SME banking, the government through public-private initiatives, and private firms like Smart Youth Investment Ltd that trains students on how to trade using an online simulation of trading at the stock market.

Apparently, Kenyans would rather have the pursuit of education rewarded through corporate jobs rather than self employment.

“After spending about Sh1 million on their child’s undergraduate degree, parents see their efforts as wasteful if their children don’t land employment,” said Catherine Muthoni, a marketing consultant and student at Africa Nazarene University.

The university has a degree course in entrepreneurship which has been flagging as fewer students show interest.

“Out of a total student population of about 4,000, less than ten students have been specializing in the entrepreneurship option under the Bachelor of Commerce degree course. The university is considering scrapping the option,” Muthoni said.