The role of informal sector in the development of an indegenious entrepreneurial ethic: a case study of the carpentry cluster in Kibuye market Kisumu

Abstract

The informal sector is an important aspect in the development of the Kenyan economy. In Kenya, the sector gained recognition after the 1971 ILO study on employment and incomes. The development of a work culture and entrepreneurial ethic has historically been associated with the Protestant ethic in the West. This cultural feature in the Western world influenced the rise and subsequent development of a work ethic among entrepreneurs. The informal sector in Kenya is a predominant feature in the economy, developed out of the people's efforts to generate income and employment opportunities in an environment that is locally defined. tis a very dynamic sector that takes advantage of locally available resources for purposes of economic survival. With a reluctant government support in the sector, the development of an entrepreneurial ethic cannot be said to be slow and undefined. This project looks at the role of the sector in the development of an indigenous entrepreneurial ethic as an effort of the entrepreneurs within the carpentry cluster in Kibuye market, Kisumu. It identifies the nature and scope of the operations within the carpentry cluster in Kibuye market. It further analyses the roles of the government and other support organizations in ethic development by looking at levels of their interaction with the operators, within the sector. The rational choice theory and the social action theory gave theoretical background of the study. The two theories look at the actions of the entrepreneurs as influencing social cohesion hence leading to .an .entrepreneurial ethic development that is unique to the specific culture. In data collection, Kibuye market was purposefully selected because of its strategic geographical and market location. The study population on the other hand comprised of informalsector entrepreneurs engaged in Carpentry production. The unit of analysiswas informalsector entrepreneurs engaged in carpentry production and their enterprises. Non-probability sampling method was used through the use of cluster sampling in choosing a representative sample. A total of 40 entrepreneurs and 40 workers were interviewed through the use of a structured questionnaire. The interview schedule involved a face-to-face interaction. Other methods of data collection involved observation and the use f secondary data. Both descriptive and inferential statistics have been used. The study found the sector to be key in enhancing the development of an indigenous entrepreneurialethic. The role of government though outlined in policy papers and other government documents was seen to be minimal by the entrepreneurs. The NGOs on the other hand were seen as playing a more pronounced role through offering financial assistance and business education to the entrepreneurs.