Role of Innovation in Kenya’s economic growth

August 21, 2015

Innovation has an important role in economic growth. Most countries with better levels of innovation and technological development have better economic growth. On the contrary, countries with low levels of innovation have worse economic growth.Those of us who have consulted history know all too well that technology and innovation encourage high economic growth for countries that had high innovation.United States of America is a great example in today’s history while industrial revolution in England is a past example. Back then, it was begun from the use of steam power yarn spinning machines that spread from England to mainland Europe and America. Furthermore, the industrial revolution was followed by the use of machines in various productions.The industrial revolution had an impact on the supply of goods. Goods were cheaper, more abundant. In addition, the industrial revolutionary made trade capacity widely available. The effect of the industrial revolutionary was wider after the invention of the telegraph and telephone that connected Europe and America.

The success of countries such as U.S , Finland and Japan proves that innovation contributes to the growth of the economy.Thanks to the Meiji Restoration that began in 1868, Japan opened their country from previous self-imposed isolation.One of the policies of the Meiji government at the time was a massive adoption of technology from the European mainland.Although Kenya is a shining example in Africa on how innovation can bring growth and development,thanks to M-Pesa revolution, the level of technological development and innovation in Kenya is still low.This is one of the explanations as to why the Kenyan economy is still driven by consumption, rather than by production.Levels of innovation in Kenya can be measured from the proportion of total funding for research and development for both public and private to gross domestic product and the number of patents, the lack of reliable researchers, weak synergy between relevant institutions government, universities, industries and institutions funding research in the implementation of research.

Currently, Kenya is one of the countries with a very small amount of funding for research, reaching only less than 1 percent of GDP in 2013. This amount did not change much from the estimated 0.5 percent of GDP spending in 2015-2016 national budget. Compare that with the Japanese research budget in 2014 averaged 3.4 percent of GDP, the United States allocated 2.8 percent of GDP while Singapore which had the same economic might with Kenya in early 1960s ranged 2.7 percent according to data available on Global R & D Funding Forecast 2014.The number of patents in Kenya is also very low, totaling only less than ten, compared with 50,990 in Japan last year. In the first ten months of this year, Kenya recorded only less than five patents according to World Intellectual Property organisation.In order to increase the power of innovation in Kenya, the government of President Uhuru Kenyatta must facilitate the flow of technology and the flow of public information needed by stakeholders consisting of technology developers meaning the academia, technology users who are also producers of goods and services and more important the government.

Contador Harrison