Support disruptive innovation to spur big employment

Unemployment is worrying with the World Bank report of 2014, estimating 1.8 million youth between the age of 18 and 25 remain jobless despite a majority completing formal education.

Although different measures to curb it have been suggested, a less explored viable strategy is to invest in disruptive innovations.

Despite disruptive innovations becoming an engine of change globally as evident in the impact of Uber, Facebook, M-Pesa and other platforms, organisations and governments, mostly in Africa continue to invest heavily in innovations that have high returns in terms of profit margins in the short-term, but low returns in spurring job creation and economic development.

Sustaining innovations are those adopted to improve the performance of existing products or a services and although important, they tend to concentrate more on the people already consuming the products or services and therefore neglect those who can’t afford, mostly the poor, either due to cost, time or skills limitations.

Many organisations in Kenya have adopted sustaining innovations.

On the other hand efficiency promoting innovations are adopted to simplify the processes in the creation and delivery of an existing product or service.

For instance, Kenya’s e-citizen is an efficiency innovation that tends to improve the delivery of government services by eliminating brokers and middlemen in the process. While these types of innovations are important, it is also vital to note that they rarely create meaningful job opportunities as their main goal is to eliminate excess human capital from the production and service process.

READ: Kenya needs policy for innovation to become enterprise

Disruptive innovations, also called empowering innovations, refer to those that transform expensive products and services into affordable ones so that many people can afford to consume them.

This means that their main goal is to convert the non-consumers to consumers by making the product or a service affordable to everyone or eliminating the constraints that discourage their consumption.

These types of innovations have a larger impact in bringing both social and economic meaningful changes to the majority.

For instance, Kenya boasts of one of the highest financial inclusion rate in Africa at 67 per cent from a mere 19 per cent in 2007 after the adoption of M-Pesa mobile payment services.

The number of people in urban and rural areas directly and indirectly employed by mobile payment services platforms runs into hundreds of thousands, clearly showing the impact of this disruptive innovation on job creation.

The government benefits from the billions of taxes and dividend cheques it collects through these innovations for development, which shows their impact as an engine of economic development.

Unfortunately these are the innovations that are rarely encouraged due to the heavy resources needed in their development and implementation.

But with a youthful and technology savvy population, this country needs to take advantage and support these innovations through development of incubation centres and innovation labs in universities and technical institutions. Companies should also encourage corporate entrepreneurship and be open to innovation if we are to realise any significant job creation.

Kabata Githinji is Entrepreneurship and innovation Lecturer, Kirinyaga University.