Embrace innovation to spur the development of manufacturing sector

The ‘Big Four Agenda’ has effectively become a household name in Kenya. Every player in the economy is now being encouraged to align his or her processes with it. For those in the manufacturing sector, this new economic direction couldn’t have come any sooner. After many years of decrying a lack of intense focus from the government, the manufacturing fraternity is firmly focused on tapping into this new-found attention from the government.

Indeed, the latest statistics point to tough times in the world of manufacturing. The latest Central Bank of Kenya report shows that the sector witnessed the highest increase in non-performing loans, by nearly Sh6.4 billion owing to a tough operating environment. More often that not, the blame is directed at the high costs of production which make it difficult to compete with other manufacturing countries.

However, there seems to be little discussion around the lack of innovation in the manufacturing sector. Despite the rise of several innovation hubs across the city, very few of them are entirely devoted to the art and science of manufacturing.

Much of the focus of the innovation landscape in Kenya is tilted towards the financial services, health care and education which have also greatly contributed to transforming the lives of Kenyans. So why has the manufacturing class lagged behind in finding its seat at the innovation table?

Perhaps one of the reasons has to do with the matter of orientation. For the longest time, the country has benchmarked with countries such as China and India, which are fundamentally different from Kenya in size and structure. Both countries have a population well over a billion people and a land mass that is nearly continental. As such, the economies of scale they enjoy is well beyond what is attainable in present day Kenya. That said, Kenya can draw plenty of inspiration from a country such as South Korea which has a comparable population size. Similar toKenya, South Korea does not have an abundance of natural resources but has still managed to be counted as one of the major manufacturing powerhouses in the world.

As Kenya seeks to be an emerging powerhouse in Africa, a significant part of its identity must be linked to innovation which will substantially increase its franchise value.

- The writer is the chief economist at Mentoria Consulting