Entrepreneurship is the capacity and willingness to develop and participate in a business venture with the intention of making a profit regardless of the financial risks involved. The role of entrepreneurship in any economy is critical, as it contributes to the socio-economic development of societies in various ways, including
- Identifying existing opportunities in the market - Through production and distribution of goods and services, entrepreneurial ventures seek to satisfy client needs and improve livelihoods. Constant market research provides insights into existing customer needs that inform decisions to provide goods and services. An example is Jumia Kenya which noticed a gap in the distribution of goods through online platforms and exploited this opportunity, giving rise to a very vibrant online business platform.
- Creating employment opportunities – The World Bank 2016 Kenya Economic update placed employment uptake by the private sector at 67% in 2014. This figure is likely to have increased with the improved performance of Kenya in the ease of doing business ranking. Entrepreneurship helps bridge the unemployment gap through formal and informal business ventures that employ millions of Kenyans.
- Contributing to national income – Through payment of taxes, businesses contribute to government revenue that consequently facilitates development. Entrepreneurial ventures further contribute to the GDP, an indication of their importance in raising revenue and financing government projects, as well as contributing to economic growth.
- Infrastructural Development – Entrepreneurial ventures open up infrastructural development in their localities. Starting up businesses often leads to the development of transport and communication networks, driven by the need for infrastructure created by these businesses. Companies like Keroche and Dominion farms opened up their localities, enabling thriving businesses to take root, taking advantage of the good transport and communication channels available.
- Contributing to Community Development – Through participation in Corporate Social Responsibility, entrepreneurs contribute to and support the development of infrastructure for education, healthcare, business training & mentorship and other social needs. In Kenya, initiatives and organizations such as the Mater Heart Run, the KCB Lion’s Den, Blaze by Safaricom and Equity’s Wings to Fly are but a few initiatives by entrepreneurs that are contributing towards improving access to health services and education and providing financial support and mentorship to other young entrepreneurs.
Entrepreneurship is vital for any country’s economy as it supports the contribution of the government in the provision of goods and services. It is therefore important that Kenya, currently at position 92 in the global ranking for ease of doing business, puts in place measures that support establishment and development of business ventures so as to improve the contribution of entrepreneurship to the economy.