PROF. MCCORMICK DOROTHY

n/a

n/a

When the OECD Development Centre launched research in 2005 to document the economic, political and social impacts of China’s and India’s economic growth on sub-Saharan African (SSA) countries, the arrival (or resurgence) of new important players had triggered concerns among traditional donors. Accusations ran from free riding on Western debt relief over violation of governance standards and unfair company competition to fragmentation of aid delivery. At the same time, there was a tendency to neglect the diversity of SSA in terms of resource endowments, trade links and industrial development. It was time then to promote African voices from various backgrounds to reflect Africa’s heterogeneity. The introductory section presents a summary of findings about the economic impact of the two Asian giants in SSA countries by Africa-based economists, with three practical conclusions. First, African countries should favor strategies that minimize areas of direct competition with the Asian giants. Second, industrialization strategies are required to exploit opportunities complementary to the Asian development path. Third, sectors of mutual interest should be identified in order to develop long-term views on how to cooperate with China and India and these views should be mainstreamed into national development plans.

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

A proposal for research into two clusters of small-scale activities in Kenya. The first is a group of auto repair businesses and related activities located in Nairobi and neighbouring Thika. The other consists of small-scale fisheries and related trading, services and processing activities around Lake Victoria. The proposed research is part of an international study investigating the nature and dynamics of industrial clusters in developing countries. The study focuses on the clustering of enterprises and the competitive advantage which they derive from local external economies and joint action, captures in the concept of collective efficiency. The Kenya case study aims, at determining whether each of the two clusters has the characteristics associated with industrial districts elsewhere; assessingthe capacity of each cluster to both to opportun ities and shocks in their environment; and and developing recommendations for strengthening each cluster. The research methodology will include a general and detailed studies of selected firms and their relationships with suppliers of inputs, buyers of outputs, firms with which they compete/cooperate, and institutions relevant to their businesses. Relationships to be studied include both economic and socio-cultural ties and gender differences in producers' networks.

n/a

n/a

n/a

n/a

n/a

n/a

Despite abundant literature on the social and economic benefits of encouraging tiny "informal" firms, scholars generally agree that larger enterprises create more unskilled jobs, use resources more efficiently, and are better at building technological capacity. Yet majority of firms will never grow beyond six workers. This paper argues that one very significant reason why small firms stay small is risk. In Nairobi, the economic and social consequences of business failure are extremely high. Entrepreneurs therefore to protect themselves from failure and, in the process, ensure that their firms remain small. Our research identified four risk-management strategies that work separately and together to discourage firm growth.• First, many entrepreneurs manage risk through flexibility. By working in rent-free quarters, using family labour and little capital, they minimise fixed costs and maximise opportunities for additional income. Second, many small manufacturers also avoid risk by manufacturing standard products for a known market. Third, successful entrepreneurs frequently diversify their income and assetsrather than expanding a single enterprise. Finally, most prefer to preserve their land and other assets unencumbered by debt. These rational responses to a risky 90 business environment ensure that most firms stay small and in the process work against formation of a dynamic manufacturing sector. Policy-makers are challenged to improve the "enabling environment" creating broad policies conducive to firm growth and by targeting specific policies and programmes to small-scale industry. Kenya needs macroeconomic and social policies that indirectly encourage firm growth by removing or reducing business and background risks. It also needs an industrial policy that provides positive incentives for enterprising business owners willing to expand employment, improve efficiency, and upgrade technology and their workers skills

n/a

n/a

n/a

n/a

n/a

n/a