vii) Fear of opening a loophole to competition hence loss of business grip. 1.2.3 Reasons for Innovation
Innovation is essential for the entrepreneur in solving the inefficiency problems. As a means of cost reduction and imposing significance social and market grip. Profit improvements are looked at from the innovation point of view though newer technology in management and production. To encounter competition by already established businesses. To facilitate opening up of new markets both locally and internationally. To facilitate diversification of products risks and losses. To protect current position of monopoly or success. 1.2.4 Requirements of Innovation i) Economic demand People engage in innovation out of belief that the economic returns will be greater than its costs. ii) Surplus capital provides the necessary time and startup costs for implementing a new idea. iii) Ability to assemble and invest capital. iv ) Mobile capital which is stable. Capital cannot serve unless it can move to potential innovator unless it can move to allow the various types of wealth to be created e.g title deeds – stability is provided by a rule of law. v) Availability of growth- fostering social institutions which facilitate the speed of technological advancement. vi) Ability and willingness to think and act creativity (Entrepreneurs) I,e the philosophical and psychological requirements. vii) Geographical and other circumstantial causes such as ethical issues. Societies in which innovation is seen as a sinful or people are punished or are shunned to think differently than others are unlikely to experience innovation. viii) The size of the firm. Large firms have the advantage of introducing innovation since they can afford it. They tend to attract more talents employees to advice on new ideas. 1.3 The Evolution of Entrepreneurship in Kenya Interest in the development of entrepreneurship and small enterprise in Kenya gained momentum as a possible remedy to the stagnation of economic development and the escalating unemployment problem between the early 1960 and 1970s Although there were attempts by the government to develop entrepreneurship, the main impetus came from the international labor organization (ILO) report. The report centered on the potential of the informal sector and suggested that the bulk of Kenya’s urban workers were self –employed in small enterprises. The report proposed that the development of this sector could; i) promote employment ii) facilitate development iii) facilitate equitable distribution of resources. Based on this report the government responded with a seasonal paper in 1973 –which recognized the role of entrepreneurship in employment creation not just in the formal sector but also in the formal sector.
- Fall '15
- Entrepreneurship, Importance Of Entrepreneurship