For most of the 20th century, everyone believed that the big corporations created the new jobs. These large companies are those that have our familiar brands and also the state corporations that we are familiar with. While this is in fact true, especially in Kenya after it emerged from the ashes of the post-independence era, many Africans have not yet adopted concepts of starting their own businesses. Therefore, they were they were taking advantage of the employers in the newly established government and the multi-nationals that had set up shop in the country. But as more and more people started getting formal education and exposure to the outside world, more and more people started fancying the idea of establishing business outfits of their own.
This model of establishment of small start-ups with low capital and almost no experience in the industry was coined the term “gazelles” by Birch, in his 1979 best seller book, The Job Generation Process. This term was used to describe those firms that had as relation to how fast they were established and started their quick growth models, and also how they created runaway employment for two to 5 people. At the turn of the 21st century, these small gazelles accounted for 60% of the total net jobs in the economy, according to the national bureau of statistics. Over the years, these gazelles grew to have more than 20 employees and surpass the KSh. 100,000 average sales revenue mark to be recognized as medium sized enterprise.
The notion of the large corporations as the job creator is a concept that cannot be valid, because these large companies are very rigid, and lack innovation. Many of these large companies have a very mature management and board of trustee’s who work to ensure safety from unnecessary risk that might de-stabilize the company and in the process mess around with their pension plan. The one thing that we have to credit these large companies with is the fact that they are stable employers, and have a longer retention period for their staff with good send-off packages after retirement. This is contrary to the small “gazelles” of which 40% hardly make it to the 5 year mark, and have less attractive post-retirement packages, if any.
The strongest argument supporting the fact that small companies are by far the bigger employers is the fact that the government has bent its stance and adopted a radical policy that are SME friendly. The policy includes easier access to finance, better communication and access to content from the internet, to revamping of the education sector to focus more on business related content. This strategy has worked, where the country has seen an upsurge in establishment of small business enterprises, and a proportionate increase of net employment in the economy.
The small and medium enterprises are here to stay, and I am sure that the gazelles are the real job creators in this country.
