NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, October 12, 2005

Research reveals that there is a powerful connection between the culture of a people and its propensity to be entrepreneurial. Kenya, for example, has national sub-cultures which have important implications for creating an entrepreneurial economy.

That would mean that in the effort to build greater entrepreneurship, it is useful to first understand the culture of a people and work with it, not against it. Let us begin with two fundamental questions: What is culture? Why is it important?

The Webster’s Third International Dictionary yielded the following on the definition of culture: “the body of customary beliefs, social norms, and material traits constituting a distinct complex of tradition of a social, religious, or social group.”

We learn a few things about entrepreneurship reading between the lines of this definition. One – entrepreneurship can be collective. Two – entrepreneurship can be indigenous and three – entrepreneurship can be social. I will leave the last two and explore the first.

But first, why is culture important? Studies suggest that there are cultural traits that enable certain societies and peoples to be more or less entrepreneurial. For example the Global Entrepreneurship Monitor (GEM) of the year 2000 claims (whether accurately or inaccurately) that the Japanese culture presents major barriers to entrepreneurial behaviour by its members.

Conversely, the same research ascertains that the American culture enables rewards and even celebrates entrepreneurial behaviour. The GEM conclusion is that there is a strong connection between cultural characteristics and how entrepreneurial a society, and therefore, an economy is.

I have used the Japanese and American examples by design. These nations represent two generally polarised types of cultures: the collectivistic Eastern culture and the individualistic Western culture. This dichotomy has been linked theoretically and empirically to entrepreneurship and economic development.

Thus, in Western cultures, entrepreneurship is seen as a highly individualistic endeavour. A very different form is observed in collectivist cultures, with a number of entrepreneurial ventures being family, cooperatives, partnerships or community endeavours. Today the world’s strongest economic growth is not occurring in the West but rather in the East and particularly in East Asia. The “Five dragons” of Singapore, Hong Kong, Japan, South Korea, and Taiwan are each experiencing substantial growth. China is also experiencing enormous growth.

There were two distinct trading patterns evident in pre-colonial Kenya. These are localised trade and transnational trade. Local trade was carried out between communities adjacent to one another.

Unwritten but narrated history teaches that local trade thrived between agricultural and pastoral communities.

The initiator of the trade was the community not an individual.

Transnational trade was carried out between distant communities, whether of African origin or at inter continental level.

There were three dominant trading and therefore entrepreneurial communities in pre-colonial Kenya: the Kamba, the Swahili and the Somali.

Narrated history has it that the Kamba trade was so widely recognised that the British colonialists made Machakos (a Kamba homeland) the centre of economic activity.

It is said that it was here too that the Indian rupee was first introduced into Kenya.

But all that was in the pre-colonial era. Indeed colonialism brought in and cemented individualistic entrepreneurship.

Kenyan Indians seem to have perfected collective entrepreneurship.

In collective entrepreneurship individuals are important, but the whole is far greater than the sum of the individuals, and social commitment balances economic commitment.

Kenya boasts of a long history of the cooperative movement and hence the good germs of collective entrepreneurship. Kenya’s collective entrepreneurship may also be traced in the concept of African socialism which we attempted to incorporate into national planning after independence.

The prevailing women groups in Kenya are a unique form of collective entrepreneurship.

It should not be lost to memory that this unique form has its roots in the “Harambee” motto of pulling and pooling together itself uniquely Kenyan.

The lesson we ought to learn here is that individualistic and collective entrepreneurship can and should co-exist for the betterment of Kenya.

Concepts such as K-Rep’s village banks need to be nurtured, piloted, adapted, diffused and adopted in the country’s development agenda.