Start-up law can speed up youth job creation, enterprise and innovation

Wednesday March 18 2020

Workers at a construction site in Kisumu on April 20, 2016. President Uhuru Kenyatta said he would involve the youth in his development agenda. PHOTO | FILE | NATION MEDIA GROUP


Kenya was this month ranked the second-best innovation hub in sub-Saharan Africa, having also been rated third in the continent in last year’s World Bank Human Capital Index Report in the productivity potential of youth.

Over the past decade, the country has also been recognised globally for its digital prowess and has also attracted the who’s who in the tech sector, earning itself the moniker “Silicon Savannah”.

Kenya’s ICT sector is, indeed, an example of how a youthful and literate population can place a country on the global map. And the government is, certainly, not ignorant of this untapped potential.

In his Jamhuri Day speech in 2017, President Uhuru Kenyatta confirmed that his government was dedicated to inclusive growth; that his then-just-unveiled development plan, the ‘Big Four Agenda’, was centred on youth.

The President declared that they were his partners in realising his agenda and convincingly proclaimed his faith that together they would realise the ‘Big Four’ objectives.

He directed the Trade ministry to address the barriers that inhibit the birth and blossoming of youth-owned enterprises.


Two years on however, the barriers continue to barricade businesses and the President had to this month give yet another directive, this time to the Kenya Industrial Property Institute (Kipi) — an agency of the ministry — to grant young innovators trademarks at no cost.

But going by history, this, too, is likely not to be effected. Policy and regulatory frameworks that support entrepreneurial activities and innovative concepts can accelerate the Big Four, and a ‘Start-up Act’ is a good place to start.

A supportive and enabling legal and regulatory framework will create a more favourable environment for innovative and budding enterprises.

The government could start by reviewing and abolishing inhibitive legislative and regulatory frameworks, some from the colonial era.

It should also create complementary instruments such as accelerated or zero-cost incorporation — including on intellectual property as well as permits and licensing, tax incentives, simplified insolvency procedures and overlapping county and national licences.

Devolve the function of youth development to ensure their economic inclusion.


That will enhance their effective and efficient participation in economic activities at the county level, putting into consideration that critical economic delivery functions such as trade, agriculture and cooperatives are devolved.

Call them “jua kali”, “side hustles” or start-ups, micro enterprises in Kenya create 81 per cent of the 14 million jobs in the MSME sector — compared to 1.9 million by the private sector and 790,000 by the public sector.

The world is beginning to formally appreciate the role of start-ups in employment creation, economic growth and innovation.

For example, Italy has been motivated by the disproportionate role that young firms have in creating employment, through the contributions of the most successful entrants to economic growth and innovation.

Germany has put in place legal infrastructure in recognition of the significant contribution of start-ups to its SME sector, where they account for 99.6 per cent of companies offering products and services.


The United States government acknowledges that since 1980, start-ups in their first year create on average three million jobs, equal to a third of total annual job creation.

Africa, too, has kept up with the global pace, with the Tunisian parliament last year unanimously legislating a start-up law to boost socioeconomic development and expand technological infrastructure.

An economy-led and youth-driven transformative agenda is key to resolving the unemployment challenge.

That will open the gates to a new frontier of consumer and labour markets; nevertheless, legislation must lead the way.

Ms Gaitho, a youth enterprise evangelist, is the founder of E.D. Alternatives Africa. [email protected] @serahgaitho