Networks, information and small enterprises: New technologies and the ambiguity of empowerment

Article type: Research Article

Authors: Moyi, Eliud Dismas

Affiliations: Ministry of Finance and Planning, P.O. Box 30007, Nairobi, Kenya. E-mail: [email protected]

Abstract: Is information a problem in the Micro and Small Enterprise (MSE) sector? If so, does the empowerment of MSEs necessarily come through information and communication technology? To address these questions, this study uses firm-level cross sectional data from manufacturing MSEs from selected sites in Nairobi, Kenya. Empirical analysis reveals considerable information gaps in the sector. The paucity of formal organizations and inaccessibility of small-scale entrepreneurs to market networks often drive them towards informal networks. Further evidence indicates that access to electricity and telephone is poor. Internet penetration rates are still low and there is a feeling among some respondents (about 40 percent) that IT was not useful. This was taken to imply that apart from the traditional factors that have marginalized the MSE sector, the entrepreneurs perceive further marginalization by the more modern and sophisticated technologies. Although IT is important, there are other more critical constraints to information flow that deserve priority. The success of ICT projects will depend not only on how they address these constraints but also on how they complement the local institutions and social networks that permeate the sector. Public policy should mainstream small informal enterprises to enable them to interface with formal support institutions and should encourage the establishment of local information centers.

Journal: Information Technology for Development, vol. 10, no. 4, pp. 221-232, 2003