In 1973, British economist E. F. Schumacher published a book titled Small Is Beautiful: A Study of Economics As If People Mattered, but over the years The informal economy is highly creative, but little data on it exists.
It was used to champion small, appropriate technologies that were believed to empower people more in developing countries. It was the opposite of the “bigger is better” mantra prevalent in developed countries at the time.
Smallness was associated with informality. The book inspired many organisations, including the International Labour Organisation (ILO), which, as a result of the renewed attention to the sector, began to agitate for recognition of what were largely micro-enterprises, popularly known as jua kali.
Although Kenya had set the pace for the introduction of small enterprises in the economy in Sessional Paper No. 10 of 1965 on African Socialism and its Application to Planning in Kenya, the paper was never explicit.
It only sought to indigenise the economy by encouraging foreign enterprises to equip Kenyan Africans with necessary skills through training and apprenticeship programmes, to enable them to operate private business.
Kenya’s Sessional Paper No. 10 of 1973, however, became the first policy document to expressly attempt to assist small enterprises to gain access to working sites, credit, managerial and technical services, skills upgrading and business training services.
Even with this assistance, the enterprises remained informal, as amplified by the government’s failure to track their performance. Statistics-wise, they remained below the radar.
Several other policy pronouncements followed, notably Sessional Paper No. 2 of 1982, which recommended that government deliberately expand its research system to cover all sectors of the economy, including the informal sector.
It also recommended acquisition and transfer of technology policy and capacity building for technological transformation, but none of these lofty promises were actualised. Continue reading