The Ohio Third Frontier and the Entrepreneurial Environment in Kenya: A Comparison

Submitted For the Course:

Beyond Silicon Valley: Growing Entrepreneurship in Transitioning Economies

Case Western Reserve University

Yoni Ayiekoh

17th October 2015

Background

Created in 2002, the Ohio Third Frontier is a program (the first of its kind) to create:

1. New technology-based products 2. Companies and industries 3. Jobs

The program was extended through 2015 indicating a widely held understanding that technology and innovation will lead to economic prosperity both today and for future generations.

Today, the Ohio Third Frontier is innovation creating opportunity. The $2.1 billion initiative's strategic intent is to create an "innovation ecosystem" that supports the efficient and seamless transition of great ideas from the laboratory to the marketplace.

The Ohio Third Frontier is successfully building an innovation economy with a commitment to:

1. Produce a high level of economic return for the state in quality jobs, company growth, and wealth creation

2. Attract companies, talent, and capital to Ohio 3. Create sustainable engines of economic development activity in key areas of technology and

industry strengths 4. Reduce the risk of pursuing entrepreneurial, innovation, and development activities in Ohio 5. Sustain best practices and relationships that lead to efficient commercialization 6. Increase the visibility and reputation of Ohio as an innovation and entrepreneurial destination

These combined attributes make Ohio a unique location for technology companies, entrepreneurs and investors to grow and prosper

The Kenyan Situation

Kenya is located in East Africa and is part of the Great Lakes Region. The country has a population of about 45 million people with a GDP of close to 150 million USD.

Although Kenya is the biggest and most advanced economy in East and Central Africa, it scores poorly on the Human Development Index. Close to 20% of Kenyans live on less than a dollar a day.

The economy is supported by tourism, agriculture, banking and telecommunications among other areas such as manufacturing.

In 2007 Kenya developed the Vision 2030, an economic development program aimed at getting the country to the same league as the Asian Economic Tigers by the year 2030.

Just as the Ohio Third Frontier has specific objectives, the Vision 2030 aims to:

The Vision 2030 strategy is specifically tooled to focus on reforms and development in eight key sectors:

1. Macroeconomic stability for long-term development

2. Continuity in governance reforms

3. Enhanced equity and wealth creation opportunities for the poor

4. Infrastructure

5. Energy

6. Science, technology, and innovation (STI)

7. Land reform

8. Human resources development

9. Security

10. timely justice

The government focused on three key pillars:

1. Economic

Aimed to improve the economic well-being of all citizens by increasing the average

GDP growth rate from its current 5% to over 10%. Entrepreneurship is being supported

through the informal sector with an aim of increasing productivity and creating jobs.

2. Social

Through this strategy, Kenya aims to build a just and cohesive society with social

equity in a clean and secure environment. It, therefore, presents comprehensive social

interventions aimed at improving the quality of life of all Kenyans and Kenyan

residents. This strategy makes special provisions for Kenyans with various disabilities

(PWDs) and previously marginalized communities. These policies (and those in the

economic pillar) are equally anchored on an all-round adoption of science, technology

and innovation (STI) as an implementation tool.

Key sectors:

Education & training

The health system

Water and sanitation

The environment

Housing and urbanization

Gender, youth and vulnerable groups

Equity and poverty elimination

3. Political

This aims to realise a democratic political system founded on issue-based politics that respects

the rule of law, and protects the rights and freedoms of every individual in Kenyan society. It

hopes to transform Kenya into a state in which equality is entrenched, irrespective of one’s

race, ethnicity, religion, gender or socio-economic status; a nation that respects and harnesses

the diversity of its peoples’ values, traditions and aspirations for the benefit of all its citizens.

The political pillar vision for 2030 is “a democratic political system that is issue-based, people-

centered, result-oriented and accountable to the public”. An issue-based system is one in

which political differences are about means to meet the widest public interest. “People-

centered” goals refer to the system’s responsiveness to the needs and rights of citizens, whose

participation in all public policies and resource allocation processes is both fully appreciated

and facilitated. A result-oriented system is stable, predictable and whose performance is based

on measurable outcomes. An accountable system is one that is open and transparent and one

that permits free flow of information. This vision is expected to guarantee Kenya’s attainment

of the specific goals outlined under Vision 2030’s economic and social pillars

To meet objectives outlined in the economic and social pillars, Kenya’s national governance

system is being transformed and reformed to acquire high-level executive capability consistent

with a rapidly industrializing country. The country is adopting a democratic decentralization

process with substantial devolution in policy-making, public resource management and

revenue sharing through devolved funds. This has been achieved through a delivery of a new

constitutional dispensation which came in effect in August 2010.

Transformation within Kenya’s political governance system under Vision 2030 is expected to

take place across six strategic initiatives, whose overarching visions, goals and specific

strategies for 2012 are as follows:

Rule of law

Electoral & political processes

Democracy and public service delivery

Transparency and accountability

Security, peace building and conflict management

To ensure that economic, social and political governance gains made under the Vision are

neither reversed nor lost as a result of change in ruling parties, the following eight governance

principles will be adhered to:

1. Constitutional supremacy: Supremacy of the constitution shall be respected at all

times. This will guarantee individual rights as stated in the Bill of Rights and the

property rights of Kenyan and international investors.

2. Sovereignty of the people: This calls for the acknowledgment of the fact that in a

constitutional democracy like Kenya, the government derives all its just powers from

the people it governs.

3. Equality of citizens: Kenya shall be a nation that treats its women and men equally. It

will not discriminate any citizen on the basis of gender, race, tribe, religion or ancestral

origin.

4. National values, goals and ideology: In the pursuit of economic, social and political

aspirations, Kenyans shall formulate and adopt a core set of national values, goals and

a political ideology supportive of Vision 2030, these will include acknowledgement of

the significance of God to the Kenyan people and an affirmation of the religious,

cultural and ethnic diversity of Kenyans. It will also affirm the indivisibility of Kenya

as a nation and her commitment to democracy and the rule of law.

5. A viable political party system: Kenya aims at a strong and viable political party system

that will be guided by policy and ideological differences rather than region of ethnicity.

Under Vision 2030, founding of political parties on religious, linguistic, racial, ethnic,

gender, corporate or regional basis will be prohibited. This is in line with the just

enacted Political Parties Bill. All political parties will be obliged to subscribe to a

legally-binding Code of Conduct. There will be a clear definition of circumstances

under which a party may be de-registered or reinstated. The delegation of state

functions to (or the use of state resources by) political parties will not be permitted.

Political parties will be required to publish their manifestos before participating in

elections.

6. Public participation in governance: Kenyans shall appreciate the values of tolerance

and respect for differences in opinion in a competitive society.

7. Separation of powers: The implementation of Vision 2030 depends on the

enhancement of the capacity of the three arms of government (Legislature, the

Executive and the Judiciary). These institutions are independently functioning in a

manner that enhances the implementation of Vision 2030.

8. Decentralisation: Vision 2030 uses devolved funds to strengthen decentralization of

development projects at the community level. Improved planning and coordination of

such projects at the local level will be accorded priority in realizing this goal.

Vision 2030 is certainly work in progress. There are various actions that have been taken the

government to support entrepreneurship. These include but are not limited to:

Women Enterprise Fund: a semi-autonomous government agency in the Ministry of

Devolution and planning to support women in getting affordable funding and support to start

new businesses and expand existing ones to spur economic wealth and job creation. This is a

flagship under the Social pillar of the Vision 2030.

Youth Enterprise Development Fund: this was established in 2006 with the aim of reducing

unemployment among the youth. The target of the fund is young people within the age bracket

of 18 to 35 years who number 13 million. The Fund was gazetted on 8th December 2006 and

then transformed into a State Corporation on 11th May 2007.

The Fund’s strategic focus is on enterprise development as a key strategy that will increase

economic opportunities for, and participation by Kenyan youth in nation building. The

government has so far released Ksh. 3.8 billion to the Fund.

In 2008 the Fund developed a 3 year strategic plan to address varied needs and aspirations of

the youth, and to address the challenges it has faced in the past. The Fund is currently working

on a 5 year strategic plan in line with the Medium Term Plan (MTP) of the Vision 2030. It is

the Fund’s intention to evolve and be able to meet the dynamic needs of the youth, who are its

raison d’être. The fund is constantly reviewing its operational mechanisms from time to time

in order to make it responsive to needs and expectations of the target clients.

The above programs which are all government initiated attempt to stimulate economic activity but have fallen short of expectation due to corruption and lack of consultation with stake holders at the crafting stage, progress stage and review.

References:

http://www.wef.co.ke/index.php/component/content/article?layout=edit&id=74

http://www.youthfund.go.ke/about/

Kenya Vision 2030 secretariat