Start-up bill can foster innovation among the youth

Start-up is a buzzword especially among techies and higher institution students. With the slowing down of the economy, leading to mass loss of jobs due to Covid-19 pandemic, last week publishing of the Kenya Start-up Bill marks another milestone of legal recognition of entrepreneurship and innovation as the seed of employment creation in Kenya.

A legal framework that helps to support the development of business ideas and provide a platform to be nurtured is the first step towards development of a start-up nation.

This Bill carries a number of benefits.

Firstly, we have continued assuming that start-ups are just a lesser form of small and medium enterprises (SMEs). This is not necessarily true because there exists an ideological and organisation difference between these different categories of businesses.

For instance, while micro and small enterprises (MSMEs) have well developed structures and a vision, start-ups are mere temporary businesses searching for viable business model to create a product or a service that is scalable.

A business model in this case refers to value creation system to the target customer, a value delivery model to its customer and a revenue model for the business.

As such any legal framework that recognises start-ups as entities by themselves is welcome as combining them with MSMEs under one policy guideline stifles the start-ups existence.

Second, though start-ups and MSMEs will get their seed funding mostly from owner’s savings and donations from friends and relatives, there exists additional funding for successful start-ups from venture capitalists and angel investors.

This is because a start-up’s main objective is not to exist, but to develop products that are scalable and disruptive.

This, therefore, means that a start-up’s legal framework will facilitate capital investments by initiating a conducive partnership environment between private and public investors both in the local and foreign arenas.

Thirdly, many good ideas world over do not necessarily originate from within industries they disrupt but from the youth eitherat university or outside the industry.

As ideas are the cornerstone of entrepreneurship and innovation, platforms that offer opportunities for these creative minds to test the viability of their ideas, link them with funding opportunities and actualise them are needed.

This can only be achieved through decentralisation of incubation centres and programmes which will act as the accelerator by enhancing technology transfers.

In addition, the start-up bill provides for promotion of the linkage between higher institutions of learning and the industry, a convergence that remains narrow today.

Fourth, idea protection through intellectual property rights is an important feature of start-up success. Because there have been complaints about loss of viable business ideas, formalising intellectual property rights will enhance creativity.

This bill offers some incentives to innovators such as research and development. It is expected to work towards supporting and promoting entrepreneurship and innovation culture.