Entrepreneurial Orientation and Performance of Youth-Led Micro and Small Enterprises in Kenya

Abstract

The youth-led MSEs in Kenya face a continuous decline in performance, an issue that has seen most of these enterprises close-down their businesses within their first year of operation. This, is despite the growing youth unemployment and continued emphasis on supporting youth to be entrepreneurs as a solution to these growing crisis. With limited literature on how the youth entrepreneurs have embraced entrepreneurial orientation, the study was motivated to assess the relationship between entrepreneurial orientation and performance of youth-led MSEs in Kenya. Specifically, the study sought to examine the influence of competitive aggressiveness, risk-taking, creativity, innovativeness and pro-activeness on the performance of youth-led MSEs, and to analyse the moderating effect of entrepreneurial finance on the relationship between entrepreneurial orientation and performance of youth-led MSEs in the Nyanza region, Kenya. The study was anchored on the theory of competitive advantage, the risk taking theory, componential theory of creativity, Schumpeterian theory of innovation, learning theory of persuasion and the resource-based theory. Using a descriptive survey design, the study collected data from a sample of 257 youth-led MSEs which were obtained from a target population of 771 registered youth-led MSEs in the Jua Kali Artisans Sub-sector in Kisumu, Migori, Siaya, Kisii, Nyamira and Homa Bay Counties. A structured questionnaire was used to collect data, which was analysed using a descriptive and inferential statistics through SPSS. From the findings, it was established that competitive aggressiveness positively and significantly influences the performance of youth-led MSEs, risk-taking positively and significantly influences the performance of youth-led MSEs, creativity positively and significantly influences the performance of youth-led MSEs, innovativeness positively and significantly influences the performance of youth-led MSEs and proactiveness positively and significantly influences the performance of youth-led MSEs. Entrepreneurial finance ecosystem was found to have a significant moderating effect on the relationship between entrepreneurial orientation and performance of youth-led micro and small enterprises in the Nyanza region. The study therefore concluded that entrepreneurial orientation through competitive aggressiveness, risk taking, creativity, innovativeness and proactiveness significantly influence the performance of youth led enterprises in Nyanza region and that entrepreneurial finance ecosystem significantly moderates the EOs. The study recommends that youth entrepreneurs especially those in the Jua Kali sector, uphold entrepreneurial orientation through being more aggressive, innovative, creative, proactive and careful risk takers in order to strengthen the performance of their enterprises. The youth entrepreneurs should also uphold and embrace key sources of financing so as to obtain the much needed capital to grow their enterprises. The government also has the responsibility of supporting youth entrepreneurs by making the entrepreneurial finance ecosystems more accessible and supportive to the youth through entrepreneurial training to enhance their entrepreneurial orientation. The implication of the study’s findings is that the Jua kali artisans are instrumental in creating the jobs and addressing the unemployment turmoil in the country, although they require deliberate and committed support from the government and other stakeholders for them to perform and achieve their mandates in the economic ecosystem.