Science and technology has promised to bring prosperity for more than a decade now,but little progress has been made.Ecoke has largely established that Kenya and African way of making and trading is largely informal.
The word “informal” may conjure images of black market activity or harmful economic practice —the darker, rarer side of informality.But the informal economy which are legal businesses that are largely unregistered and unprotected always known as ‘Jua kali’ in Kenya— comprises a much broader spectrum of activity, from piecing together scrap materials in makeshift workshops to extending credit to loyal customers. Most products are simple goods like furniture and kitchenware but a select group of advanced craftsmen has developed complex agricultural and tooling machines.
In Kenya, the latest survey of microenterprises, published by the National Bureau of Statistics in 1999, suggests that over three-quarters of non-agricultural employment occur in the informal economy.If technological interventions are to have impact, they must adapt to this informal mode of making and trading.The informal spirit, known in Kenya as jua kali, has produced clusters of economic activity throughout Africa’s cities and rural market centres.
Producers and traders set up shop in close proximity, attracting competitors, labour, customers and support services such as credit providers.This positive feedback loop has bred some of the largest manufacturing clusters in the world — Gikomba in Nairobi, Kenya, for example.These flourish due to three elements: the resourcefulness, relationships and reason (or knowledge) of the entrepreneurs.
Resourceful engineers make treasure out of trash — from oil lamps made of soup cans to grass cutting machines made of scrap sheet metal — and at the end of their useful life, these items are fed back into the web of production by scrap pickers.An understanding of the local context is deeply embedded in informal business.Engineers continuously adapt production methods to available materials and product quality to customers’ wallets — precisely the flexibility needed to thrive in that context, however frowned upon by regulators.
Despite the promise of informal clusters, little innovation has emerged in terms of new products that meet local demand — tools that boost agricultural production, for example.
What happens, for example, when governments or multilateral institutions introduce factories and corporate parks?.Not much. A factory might employ a dozen skilled workers, but the investment rarely trickles down to the “indigenous” economy.And enterprises may only import raw materials and export the resulting goods, creating a closed loop with no links to domestic industry.
The main barrier to innovation and growth for entrepreneurs is risk. We can reduce this risk by improving access to resources like credit, tools and skills.And we can increase the willingness to take risks by promoting a culture of innovation by using market intelligence, working with customers to co-create products and improving the design process.
But simply reducing risk is not enough: in Kenya, a UN Industrial Development Organisation (Unido) project provided power and equipment to rural jua kali business owners only to find that they used the new tools to make the same products at the same quantities.Maker Faire Africa, a festival for craftsmen, has sparked a social movement around informal innovation by rewarding those who demonstrate inventiveness and risk-taking.
This movement has incubated new technologies for local consumption, such as a machine for making rope and a tea maker activated remotely by SMS messages.Though resourceful on its own, the informal economy is inextricably linked with the formal economy.For example, factory waste provides materials, and the most reliable commissions are subcontracted from formal enterprises.And formal systems can have a broader impact.
The explosion of access to mobile devices and cloud computing is making a difference in Kenya — allowing small businesses to make payments more easily and securely using Safaricom’s M-pesa, for example.
Though the informal economy on its own may not yield prosperity for Africa, technological and scientific interventions that leverage informality will be more likely to succeed.
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