Employment and productivity in Kenyan manufacturing

Abstract

This paper reports the results of an extensive set of interviews with Kenyan manufacturers. The question to which these interviews were addressed is the possibility of absorbing larger numbers of workers in the manufacturing sector. A number of rather surprising patterns appeared. First, existing manufacturing enterprises are relatively labour intensive; rarely do they exhibit the mechanization levels of the developed countries. Second, productivity of labour has risen rapidly not as a result of increasing levels of capital per worker but as the outcome of reorganisation, simple innovations and increasing utilization of capacity. These findings suggest that at least in the near future, say five to ten years, though manufacturing employment may grow, it will certainly grow more slowly than output.