Entrepreneurship is the mainstream of economic development of the county. Progressive economic development is attainable where entrepreneur’s innovative activities create new business or add value to existing businesses. This is not the case in BMUs along Lake Victoria Region as majority of entrepreneurs in this region start business which are duplicates of the existing ones. Entrepreneurs in Business Management Units along Lake Victoria Region are therefore not innovative. The problem of lack of business innovative behavior is that it creates competition and in the process those businesses which are unable to survive competition close down. The new businesses created in the Lake Victoria Region Beach Management Units are either shops, hawking hardware, fish selling or boda-bodas which are similar to the already existing businesses. Studies that have been done in Beach Management Units a long Lake Victoria region to date have not investigated the determinants of entrepreneur’s lack business innovative behavior. This research undertakes to investigate factors influencing lack of entrepreneur’s business innovative behavior in this region. The specific objectives of the study were to: determine the influence of subjective norm on entrepreneur’s lack of business innovative behavior; investigate the influence of entrepreneur’s competencies on entrepreneur’s lack of business innovative behavior; establish the influence of entrepreneur’s personality traits on entrepreneurs lack of business innovative behavior; and determine the influence of environmental factors on entrepreneur’s lack of business innovative behavior. The study targeted 1500 entrepreneurs in five Business Management Units in along the Lake region. Purposive sampling technique was used to identify these five BMUS while random sampling was used to select 300 entrepreneurs. The choice of Beach Management Units was guided by the following factors: number of years it has been in existence, accessibility and business activities in place, while the entrepreneurs were randomly selected. The study employed descriptive survey study approach. Primary data was collected using structured questionnaires. SPSS package was used for data analysis data. Data was analyzed using descriptive statistics and inferential statistics. Frequency descriptions were used to analyze descriptive statistics. While chi-square and multinomial regression used to analyze inferential statistics. Results were presented using tables. Based on the results, the study found that there was a positive influence of subjective norms, entrepreneur’s competencies, personality traits and environmental factors on entrepreneur’s business innovative behavior. The study recommended that: baseline study to be done to identify potential business opportunities long Beach Management Units, opportunity identification awareness training to be conducted to entrepreneurs along Beach Management Units to help in creation of new business units which are not duplicates, all business activities be registered to make it easy for the Beach Management Units management to regulate the number of businesses. Fourthly, a vetting committee to be appointed to advice the entrepreneurs on business opportunities available.
CHAPTER ONE INTRODUCTION
Background to the Study
Entrepreneurship is the mainstream of economic development of the country. Progressive economic development is only attainable where entrepreneur’s business innovative behavior creates new business. Studies reveal that entrepreneurial projects undertaken in developing countries are just a replica of those in developed countries. The entrepreneurs therefore have very little innovation if any in addressing Small Scale Business Enterprises (SSBEs) needs (Dickson, 1995; Adaya, 2000; Kibas, 1995; Maalu et al., 1999). Entrepreneur’s business innovative behavior in Beach Management Units (BMUs) a long Lake Victoria Regions is lacking as entrepreneurs in the region create new business activities which are duplicate of existing business activities in the region. High level of entrepreneur’s business innovative in any country contributes to rapid economic growth (Wennekers, Thurik, 1999; Morris et al., 2004; Boettke and Coyne, 2004). Creation of duplicate businesses increases competition, increased competition on the other hand reduces economic development in the region.
Economies with high rates of entrepreneurship are performing well as evidenced by high levels of economic and social developments (Macke and Markley, 2003). The level of entrepreneurial activity however varies from one entrepreneur to another and from one country to the other (Reynolds et al., 2003). Asia, Hong Kong, and Japan have the lowest level of entrepreneurial activities compared to countries in Latin America. This
could be because of government policies on Small Scale Business Enterprises in these countries and more so because entrepreneurs just start similar business activities thus increasing competition and loss of profit. Studies have shown that entrepreneurship evolved through creativity and innovative practice of human being. These activities have changed entrepreneur’s economic life and help in solving economic, social and political problems.
The contribution of entrepreneur’s innovation and identification of opportunities to development can be traced from the time of Egyptians who designed and built great pyramids out of stones to date. Key personalities who contributed to innovative activities of entrepreneurship during ancient period to 20th century are: Robert Fulton- (steel engine), Samuel Colt-(weaponry), Eli Whitney (cotton gin), Samuel Morse (telegraph) Andrew Carnegie-(steel industry), Henry Ford-(automobile), Vanderbilt- (rail roads), Rockefeller-oil (Holt, 2004, 2005). Business activities, like IBM by Thomas Watson, Lotus founded by Mitchell D. Kopor, APPLE, by Steve John and Stephen Wozniak. Others are the Bill Gates (Computer soft wares), M-Pesa of Safaricom are new innovations that not only changed livelihood but also immensely contributed to economic and social development have grown from SSBEs to large enterprises today. These entrepreneurs’ innovations changed the economic and social status of the world. This historical evolution is a clear testimony that creativity and innovative behavior of entrepreneur is an important factor for the growth of business enterprises. Studies on entrepreneurship are now a concern of developed and developing
countries due to the benefits that it accords both the government and the society. This is evidenced by high level of economic growth and faster development (Wenneker and Turiki, 1999; Morris et al., 2004: Boettke and Coynne, 2004).
Entrepreneur’s business innovation is responsible for larger profits, higher growth rates, a larger number of jobs, greater varieties of goods and services (Blundell, 1968; Drucker 1986; Jonanningson, and Monsted, 1997; Mueller 1971; Wynarczk 1999). It also has immense benefit in agriculture (Chaudhri, 1978), banking (Rangarajan and Mampilly, 1978). Innovation therefore is the corner stone of progress and a study of innovative behavior of entrepreneur is of special relevance in terms of its potential contribution to development. The need for innovation may be genuine, but people at large may not be consciously aware of this need, much less will they be able to articulate it (Manimala 1988a). The innovator helps in expanding the scope of development through creation of new business activities. Lack of entrepreneur’s business innovative behavior will slow economic development.
Entrepreneurs Lack of Business Innovative Behavior
Lack of Business innovative behavior is conceptualized in this study as a process of creation of new businesses which are duplicate of existing business ventures. This behavior may be influenced by subjective norms, entrepreneur’s complacency, and personality traits and environmental factors a fact that is confirmed by this study. Entrepreneurs business innovative adds value to the business and the community at large. Understanding the
determinants of entrepreneur’s lack of business innovative behavior will enable the entrepreneur, government, and other stake holders be involved in innovative activities by coming up with new business activities thus eliminating duplication of existing businesses. Millennium Development goals (MDGs) and Kenya Vision 2030 drive the entrepreneurs to apply new technologies and approaches in order to innovate. This entrepreneurial innovative approach makes the innovative process to effectively and efficiently match the challenges of globalization and liberalization. An entrepreneurial innovative approach is seen by many scholars and policy makers as an answer to entrepreneur’s business innovation behavior.