Lessons on entrepreneurship and innovation from Brazil

Yesterday’s Sunday Standard had an article written by Prof. Anyang’ Nyong’o, Minister for Medical Services on why Kenya needs a science and technology driven economy to thrive. Coming at the back drop of Brazilian President Lula da Silva’s visit to Kenya, the article raises several points for why Brazil is a major emerging economy,  and which Prof. Nyong’o posits is due to the Brazilian government prioritising innovation as a major development concern. In turn he states that policies regarding technology as well as scientific societies need to be mainstreamed into Kenya’s national development.

However probably as a result of column space, a reader could maybe assume that making the public sector friendlier to technology change is all that is required. That ensuring adequate public resources are directed into science and technology will firmly put Kenya on the trajectory to become the middle income economy envisaged in Vision 2030. But that ignores the human aspect.

Brazil has placed emphasis on it's SME sector which accounts, just like Kenya for the majority of jobs and businesses in the economy. Indeed, according to an article on the Kaufman Institute for Entrepreneurship’s website titled Brazil’s Entrepreneurship Boom, the increase in new companies in Brazil has been linked with the country’s developing entrepreneurial culture and mindset. Each year this has been demonstrated by the number of participants in Global Entrepreneurship Week which increased from 1.5 million entrepreneurs in 2008 to 5.3 million in 2009.

And even though the country’s listing on the ease of doing business index has recorded similar challenges as Kenya in terms of high tax rates; as well as having structural impediments such as an education system that does not engender financial literacy, Brazil’s entrepreneurship development policy is strikingly different in that it focuses on promoting high-growth ventures as opposed to Kenya’s policy of just creating enterprises with the hopes that they will one day be able to create jobs.

This has meant that Brazil’s high impact intervention has brought about more immediate impacts on the economy, than the more laid back approach of just creating ventures with little regard for growth.

Similar to Kenya where according to the Ministry of Youth Affairs and Sports, there are 2.5 million unemployed youth and barely 125,000 are absorbed into the formal sector annually; young people in Brazil aged between 18 and 24 years account for 36% of the country’s unemployed. Nevertheless, lessons learned on Brazil’s focus on innovation as well as the promotion of an entrepreneurial spirit does give hope that indeed Kenya could just be on a positive path to Vision 2030, come the 2014 World Cup in Brazil.

United Nations calls for urgent action to tackle rising youth unemployment

14 July 2010 – The United Nations labour agency is calling for urgent action to tackle the crisis of youth unemployment, which has increased significantly in the wake of the global economic slowdown and has repercussions for the economy as well as social cohesion.

Young people – those aged 15 to 24 – account for over 22 per cent of the increase in the number of unemployed since the beginning of 2007 and is now nearly three times the average level among adults aged 25 and over, according to the International Labour Organization (ILO).

“In nearly all countries, the increase in youth unemployment has outpaced that of adults,” the agency says in a new report entitled “Youth employment in crisis.”

Since the start of the crisis, the youth unemployment rate has risen over 7 percentage points – the sharpest two year increase on record – and now exceeds 21 per cent on average in the countries for which data are available, say Steven Tobin, ILO economist, and Raymond Torres, Director of the International Institute for Labour Studies, who are co-authors of the report.

The report points out that young people are entering the labour market at a time of limited job creation. Employed young people are also often engaged in precarious jobs, and are therefore more vulnerable to job losses than their adult counterparts.

Young people who lack general or vocational education are especially vulnerable to the crisis, it notes, adding that as job prospects remain weak, many young people might see little benefit of furthering education or training which would have negative socio-economic consequences.

In addition, the lack of decent work opportunities in developing countries had led to significant emigration by many skilled young people.

The authors stress that it is crucial to promote more and better jobs for youth and urges immediate action, noting that impact of long-term unemployment on youth can be “devastating and long-lasting.”

The longer young persons remain out of touch with the labour market, the more difficult – and costly – it is to return to productive employment, they state.

“There are also a number of important social implications related to exclusion, including susceptibility to anti-social behaviour, including juvenile delinquency, and social unrest,” they add.

According to the report, it will not be possible to improve youth employment prospects significantly in the absence of a global economic and labour market recovery. Therefore, it is crucial to carry out the Global Jobs Pact, adopted by ILO members in June 2009 in an effort to guide national and international policies to stimulate economic recovery, create jobs and protect working people and their families.

Source: UN News Service

Call For Papers: 2010 National Youth Conversation Conference on Peace, Reforms and Youth Economic Empowerment, 12th-16th Oct 2010

Kenya Youth Parliament, the organizers of the 2010 National Youth Conversation; Conference on Peace, Reforms & Youth Economic Empowerment in Nairobi, Kenya from Oct 12th to 16th, 2010 invites you to participate in the oncoming largest gathering that brings together social activists, peace builders and  youth leaders in the pursuit and defining of a Better Kenya.

This conference brings together only four (4) participants from every constituency as a ‘Call to Action’ to assist young people ‘learn’ and ‘understand’ their roles in Building a Peaceful Kenya and provide them with tools, information and ideas of participating and influencing the Reforms Agenda at the grassroots levels.

This will be achieved through the design of Individual Action Plans (IAP’s) to be implemented at grassroots level and coordinated Constituency Actions Plans (CCAP’s) to be coordinated by Kenya Youth Parliament and its partners.

This conference is a follow-up of activities being ran under the aegis of the Youth Platform for Change “YP4C” namely the National Youth Conversation Café’s in the grassroots areas, the Koffi Annan Justice and Peace National Tournament Coordinated by  Mathare Youth Sports Association (MYSA) and Sports Connect Academy (SCA) , and a play which has been specifically scripted to capture the issues in the proposed constitution as well as the events during and after the post-election, radio drama and stage play to be staged at different venues of the country by Artists Forum International (AFI).

To learn much more about Youth Platform for Change (YP4C) and its partners, write to info@kenyayouthparliament.org, copa@copafrica.org and safer. Nairobi@gmail.com

Disclosing Non-Disclosure

Yesterday a workshop was held by the ICT Board at the University of Nairobi’s Chiromo campus to discuss their Digital Content and Software Applications Grants. The grants have two categories that Kenyan participants can enter:

• Government information portal: to develop solutions and products that exploit mobile and web technology in the delivery of government information or services, and 
• Private sector content and applications: to develop innovative solutions and products that exploit mobile and web technology in the delivery of information, entertainment or services 

The venue was packed to capacity with entrepreneurs seeking to find out how their projects could benefit from this Kshs. 300 Million grant facility that is aimed at promoting the development of local digital content and software applications.

After discussing modalities regarding applications and eligibility amongst other grant criteria, one of the contentious issues that emerged was the intellectual property protection for the grant applicant’s projects.

Some participants expressed concern that even if they are not selected, their software could be used by unscrupulous people. However, one way that emerged to mitigate this was a suggestion that non-disclosure agreements could be included in the application supporting documents, if not on the online template.

Non-disclosure agreements (NDAs), also known as confidentiality agreements, or proprietary information agreements are legal contracts between at least two parties to protect non-public business information.

With the ICT Board grant form not providing for NDAs, another suggested way of intellectual  property protection was through the use of patents, copyrights and trademarks. Some participants nevertheless raised the point that the triumvirate of IP protection tools were expensive and beyond the reach of small entrepreneurs. However, a lawyer who gave a short presentation advised that in fact the cost of registering copyrights was Kshs. 600 (US$ 7.40) - not as punitive as earlier thought.

Copyrights, patents and trademarks provide innovators with exclusive rights, including the right to copy, distribute and adapt their work. These intellectual property rights also give the owners the right to commence legal proceedings to prevent unauthorized use of their innovation.

The discussion then veered onto how an entrepreneur engaging a large corporation could protect their idea from being exploited. However the unequal relationship power balance means that even though an entrepreneur may ask a corporate to sign an NDA, they do have the option of refusal. Many entrepreneurs have done away with their NDAs only to see their projects being used by the same companies they approached. In Kenya, there is also the problem of the time and expense it takes to pursue court cases which also act as a deterrence when seeking out the IP rights and protection.

The ICT Board could take up this issue to sensitise the private sector on the ethical sense of respecting the hard work of entrepreneurs. In the meantime, we will protect our innovations the best we can.

How entrepreneurs stay motivated

Choose a job you love and you will never have to work a day in your life. - Confucius.

We recently stumbled upon Meme (pronounced “meem”), a technology site tracking innovation, social media, culture and business. The site features an interview with Richard Branson, the renowned entrepreneur - best known for his Virgin brand of over 360 companies.

At the conclusion of the interview where Branson is asked about his philosophy on focus he responds: “I tend not to think of work as work, or business as business. I am passionate about any business or challenge I put the Virgin name to, this helps me to stay focused. I truly believe you have to love what you do and be the best in the market – simply by providing the consumer with the products they want.”

This triggered recall of another interview with social entrepreneur Ami Dar of Idealist.org on Dowser, a site that tells stories about people who are creatively attacking social problems. For those not in the know, Ami Dar is the founder of Idealist.org an interactive platform where people and organizations can take steps towards building a world where all people can lead free and dignified lives.

When discussing what motivates him, Ami Dar in the Dowser interview said “It can be frustrating at times, but when people ask me, ‘How do you motivate yourself, how do you keep going,’ I’ve never felt that I have a choice.  I’ve never in a million years imagined working for a different organization.  This isn’t a job, it’s not a workplace. It’s what I do.”

After the initial excitement of the brain wave that will change the world and revolutionise society has long ended; and the entrepreneur sets to the task of actually making their vision happen, sometimes set backs or sheer fatigue sets in. Then the visionary who was once so elated over their business idea starts to view it as work.

Though it has been said that employees work in a business while entrepreneurs work on their business, however particularly for the micro-entrepreneur sometimes all of a sudden the purpose of the idea looses prominence and the entrepreneur only sees the necessity of getting the work done.

After a while even that business plan we spent so much time on prior to launch gets thrown by the way side and it becomes a matter of survival to stay afloat. At this time it’s important to step aside, pick up the plan and assess whether you still see the bigger picture and whether it still excites you. If it does, then like Richard Branson and Ami Dar think of your business as a vocation. Your legacy to the world.

Then … just get back to work!

East African entrepreneurs need a level playing field in the new Common Market

The regional integration of the East Africa community is finally here. With the promise of trade barriers falling, for East African entrepreneurs this bodes well in a common market of 130 million people.

After the collapse of the East African Community in 1977 due to political wrangling, there is a renewed sense of hope of expanded trade in a wider market. So far the revamped East African Community has set about the arduous task of harmonizing regulations to take into account the need to boost cross-border business and investment.

The Doing Business in East Africa 2010 report however indicates significant issues  concerning the capacity of the member-state entrepreneurs to compete on a level playing field with each other. Despite the efforts at harmonizing laws pertaining to business and coalescing tax policies, internal barriers to enterprise will affect the number of entrepreneurs competing on the common market.

For instance the ease of venturing into enterprise is easiest in Rwanda with 2 procedures and a registered business in 3 days. Compare this with Kenya and Tanzania with 12 procedures and the business registered in 34 and 29 days respectively.

Then there is the crippling cost of starting a business where in Burundi the cost is 151.6% of income per capita in comparison with Kenya or Tanzania where the cost is 37%. And even though Kenya leads in facilitating licensing with 11 procedures for the entire region, the process is still time consuming. It takes 120 days Kenya and 143 in Uganda compared with the rest of member states where the process of procuring business licenses takes well over 200 days.

It is hoped the streamlining of tax revenue collection will facilitate cross-border enterprise. However the problem of enforcing contracts continues to act as a barrier to profitable trade. Where in Rwanda it takes 260 days to resolve contractual disagreements; in Burundi the process takes a whopping 832 days! Thus there still remains a lot to be done so that all East African entrepreneurs can truly benefit from the Common Market.

Read the Doing Business East Africa 2010 report here

Nairobi's traffic is not good for business

Today all radio stations are warning Nairobi commuters about the traffic. It began yesterday with the imminent arrival of Barack Obama's number two Joe Biden. Add to that today he is meeting President Kibaki and Prime Minister Raila Odinga while Parliament opens a new session - meaning everyone is texting each other "avoid town"!.

Then there is the massive road works project being undertaken throughout the country with the promise of making Kenya a super highway for domestic and cross-border trade. With the liberalisation of the market that has spawned a new generation of car dealer entrepreneurs whose used car imports cannot quench the market; this should have been the dream Kenya's Vision 2030 policy plan speaks of.

Alas that is not the case. Traffic jams have become the stock in trade. And the problem is not that one has to leave home before the crack of dawn just to get to work on time; but there is also the environmental problem with sub-standard cars jamming the streets spewing fumes to the detriment of the ozone layer. 

Before the cry of Nairobi motorists was "those matatu drivers!". However today, even though matatu's still drive helter skelter, traffic jams still clog the streets.

Though it is commendable that the road work projects have the overall goal of reducing transport costs within Nairobi; for entrepreneurs the costs of being not just located in the Central Business District but now further afield in locales such as Westlands and Kilimani has meant that human traffic walk-in enterprises have had to readress their business models. 

For the rest of us, we wonder what time we will get home today and what time tomorrow we have to wake up in order to get to work on time.