The Informal sector is increasingly viewed as an important engine for employment creation and economic growth. This has been necessitated by the increasing awareness within the government that large projects in the industrial sector are less likely to generate the requisite employment opportunities, given the high capital-intensity of output in the sector.
While informal sector activities grew faster with the attainment of Kenya’s political independence, the economy continued to be dominated by foreign interests through multinational corporations (Ndege 1990:14). It was not until 1972 that informal sector activities were brought into the open by the ...view middle of the document...
These deficiencies can arise out of personal inadequacies in management, poor government and social support and a discouraging infrastructure (Attahir 1995).
Researches done on this sector such as Dolinsky et al (1993) and Juma, et al (1993) so far have only made inferences on the business management skill levels of the participants. This paper discusses the findings of a study that used an ex post facto survey research design to develop a criterion for measuring business skills among informal sector entrepreneurs in Kenya. Knowledge of the practice of business is believed to be vital in influencing business effectiveness and the quality of business output. This is one of the key determinants of entrepreneurship, which in turn affects product quality, productivity and choice of entry into self-employment (Evans and Jovanovich 2000).
The informal sector in Kenya is an acceptable destination for a majority of the country’s bulk of job seekers who take initiatives to set up business ventures on a self-employment capacity (Republic of Kenya 2002). Generally, this group of entrepreneurs resorts to self-employment activities as a way of earning a livelihood after failing to secure employment in the formal sector. It is usually assumed that they are aware of the skill requirements of setting up and running a business venture. Though available literature indicates low business management skill levels among informal business owners, no clear efforts have been made so far to specify which business knowledge areas are deficient and to what extent in quantitative terms. The main purpose of this study was therefore to measure and determine business skills cognition among informal sector entrepreneurs with a view of identifying the strong and weak areas or dimensions in business management. Business skills cognition referred to the knowledge and understanding of business practices and operations.
Cognitive abilities in business among informal entrepreneurs are an important attribute in the success and effective contribution of the informal sector in revitalising and spurring the Kenyan economy (Republic of Kenya 2002). The contribution of this study in this regard is significant. The findings of the study are important to training providers in determining the priority training needs that will optimise the performance of the informal sector for the individuals’ benefit and that of the overall economy.
2.1 Origin of jua kali industry
The term “informal sector” was popularized have another term by a 1 for the sector: Juakali, literally “under the hot sun which micro-entrepreneurs and their employees labour. This unstructured sector has emerged as a result of the incapacity of formal, regulated industries to absorb new entrants. The Jua Kali sector encompasses small scale entrepreneurs and workers who lack access to credit, property rights, training, and good working conditions. Originally restricted to artisans, the term has come to include a number...