Collective Efficiency and the Small Enterprise Growth in Kenya

Abstract

Small enterprises contribute to economic dynamism, entrepreneurship and have potential to anchor sustainable industrial development in least developed countries. However, they are constrained by the lack of capacity to develop infrastructure and acquisition of technologies with consequent loss of competitive advantage in the global market. This paper explored collective efficiency as a paradigm that could inform infrastructure planning and development to support small enterprises. Data gathered from 203 wood-based enterprises in Kenya revealed collective efficiency to be positively related to growth of the enterprises. The relationship between collective efficiency and growth of the wood-based enterprises was found to be logarithmic. These findings demonstrate the vitality of collective efficiency in growth of small enterprises especially in the early stages.

Key words: Collective efficiency; collective efficiency index, enterprise growth index, infrastructure planning and development