ACHIEVING SUSTAINABLE DEVELOPMENT IN TVET THROUGH SCIENCE,
TECHNOLOGY & INNOVATION
‘SUSTAINABLE ENTERPRISE DEVELOPMENT AND GROWTH FOCUSING ON
ENTREPRENEURIAL ECOSYSTEMS’.
NAME OF PRESENTER: Gitari, Francis Wachira.
ORGANISATION: Thika Technical Training Institute, Kenya
E-MAIL ADDRESS:
ABSTRACT
To cope with the new world order, many African Governments’ emphasize on the role of
TVET institutions to play the critical role of fostering entrepreneurial culture and
innovation development to spur economic growth and create self employment. The main
challenge for governments is to develop policies that work, but avoid the temptation to try
to effect change via direct interventions. The study of entrepreneurial ecosystems
developed a set of general principles for government policy in relation to these ecosystems.
A “growth oriented” approach is more relational in nature for the promotion of Small and
Medium Enterprises (SMEs) and this focuses on the entrepreneurial leadership of these
growth firms. It seeks to understand their networks and how to foster the expansion of
such networks at the local, national and international level. Firms seeking to grow need to
be given help in linking up with customers, suppliers and other “actors” within the
ecosystem who can provide resources. Government role should be to direct the relevant
departments and agencies to focus on the problem and develop effective and appropriate
policies. A good understanding by the government of what entrepreneurial ecosystems are,
how they form and the role and limitations of government policy is well placed to generate
more effective outcomes.
KEY WORDS: Government policy, Small and Medium Enterprises (SMEs),
entrepreneurial ecosystems, innovative development.
1
, Introduction: developments in industrial policy
Over the last sixty years there has been an evolution in the manner in which governments in
advanced countries have undertaken industrial and enterprise policies (Warwick, 2013). Over
the past twenty years there has been an escalation of the same in Developing countries where
both the quantity of policy initiatives and the level of funding committed to these activities have
doubled. These changes can be summarized as a shift from traditional enterprise policies to
growth-oriented enterprise policies and has involved significant changes in the unit of focus, how
it operates and how it interconnects with other policies.
Industry policy can be defined as ‘any type of intervention or government policy that attempts to
improve the business environment or to alter the structure of economic activity towards sectors,
technologies or tasks that are expected to offer better prospects for economic growth or societal
welfare than would occur in the absence of such intervention’.
This has resulted in a gradual change, varying across different countries, towards a much greater
focus on support for growth-oriented entrepreneurship as outlined in Table 1, The consequence is
that policy makers across the Developing Countries are now strongly focused on promoting
Small and Medium Enterprises (SMEs). The rationale for this focus is that SMEs are thought to
drive productivity growth, create new employment, increase innovation and promote business
internationalization. A recent meta-analysis of prior empirical studies concluded that “a few
rapidly growing firms generate a disproportionately large share of all net new jobs compared
with non-high growth firms. This is a clear-cut result… This is particularly pronounced in
recessions when Gazelles continue to grow” (Henrekson and Johansson, 2010; 240). The policy
interest in SMEs can therefore be explained largely in one word: ‘jobs’ (Coad et al, 2014). An
influential UK study covering the period 2002-2008 found that SMEs represented about 6% of
the total number of businesses (termed ‘the vital six percent’) but created 54% of all net new jobs
in the UK (Anyadike-Danes et al, 2009). The majority of these SMEs were small (less than 50
employees) but well established (over five years old). Moreover, these firms are distributed
across all industry sectors, with no bias towards technology-based firms. Updating this research
to cover the onset of the financial crisis (2008-10) found that the number of SMEs was very
similar to both the 2002-2005 and 2005-2008 periods and that, as before, they generated more
than half of all new jobs created by firms with 10 or more employees, emphasizing that SMEs
are equally significant in periods of economic growth and recession. SMEs do not only create
2
TECHNOLOGY & INNOVATION
‘SUSTAINABLE ENTERPRISE DEVELOPMENT AND GROWTH FOCUSING ON
ENTREPRENEURIAL ECOSYSTEMS’.
NAME OF PRESENTER: Gitari, Francis Wachira.
ORGANISATION: Thika Technical Training Institute, Kenya
E-MAIL ADDRESS:
ABSTRACT
To cope with the new world order, many African Governments’ emphasize on the role of
TVET institutions to play the critical role of fostering entrepreneurial culture and
innovation development to spur economic growth and create self employment. The main
challenge for governments is to develop policies that work, but avoid the temptation to try
to effect change via direct interventions. The study of entrepreneurial ecosystems
developed a set of general principles for government policy in relation to these ecosystems.
A “growth oriented” approach is more relational in nature for the promotion of Small and
Medium Enterprises (SMEs) and this focuses on the entrepreneurial leadership of these
growth firms. It seeks to understand their networks and how to foster the expansion of
such networks at the local, national and international level. Firms seeking to grow need to
be given help in linking up with customers, suppliers and other “actors” within the
ecosystem who can provide resources. Government role should be to direct the relevant
departments and agencies to focus on the problem and develop effective and appropriate
policies. A good understanding by the government of what entrepreneurial ecosystems are,
how they form and the role and limitations of government policy is well placed to generate
more effective outcomes.
KEY WORDS: Government policy, Small and Medium Enterprises (SMEs),
entrepreneurial ecosystems, innovative development.
1
, Introduction: developments in industrial policy
Over the last sixty years there has been an evolution in the manner in which governments in
advanced countries have undertaken industrial and enterprise policies (Warwick, 2013). Over
the past twenty years there has been an escalation of the same in Developing countries where
both the quantity of policy initiatives and the level of funding committed to these activities have
doubled. These changes can be summarized as a shift from traditional enterprise policies to
growth-oriented enterprise policies and has involved significant changes in the unit of focus, how
it operates and how it interconnects with other policies.
Industry policy can be defined as ‘any type of intervention or government policy that attempts to
improve the business environment or to alter the structure of economic activity towards sectors,
technologies or tasks that are expected to offer better prospects for economic growth or societal
welfare than would occur in the absence of such intervention’.
This has resulted in a gradual change, varying across different countries, towards a much greater
focus on support for growth-oriented entrepreneurship as outlined in Table 1, The consequence is
that policy makers across the Developing Countries are now strongly focused on promoting
Small and Medium Enterprises (SMEs). The rationale for this focus is that SMEs are thought to
drive productivity growth, create new employment, increase innovation and promote business
internationalization. A recent meta-analysis of prior empirical studies concluded that “a few
rapidly growing firms generate a disproportionately large share of all net new jobs compared
with non-high growth firms. This is a clear-cut result… This is particularly pronounced in
recessions when Gazelles continue to grow” (Henrekson and Johansson, 2010; 240). The policy
interest in SMEs can therefore be explained largely in one word: ‘jobs’ (Coad et al, 2014). An
influential UK study covering the period 2002-2008 found that SMEs represented about 6% of
the total number of businesses (termed ‘the vital six percent’) but created 54% of all net new jobs
in the UK (Anyadike-Danes et al, 2009). The majority of these SMEs were small (less than 50
employees) but well established (over five years old). Moreover, these firms are distributed
across all industry sectors, with no bias towards technology-based firms. Updating this research
to cover the onset of the financial crisis (2008-10) found that the number of SMEs was very
similar to both the 2002-2005 and 2005-2008 periods and that, as before, they generated more
than half of all new jobs created by firms with 10 or more employees, emphasizing that SMEs
are equally significant in periods of economic growth and recession. SMEs do not only create
2
