Endeavor Insight Highlights the Scaleup Ecosystem in Nairobi, Kenya

In a report by Endeavor Insight on the impact of scaleups in Nairobi and the Rift River Valley region, Endeavor found that Kenya needs to generate more than 3.9 million new jobs for young people by 2020. Nairobi must play a leading role in creating these new employment opportunities. Unemployment is very high among young Kenyans and the nation’s labor force is projected to grow by another 3.4 million people between 2014 and 2020, due primarily to new young adults entering the job market. Assuming that the need for new jobs will mirror the distribution of Kenya’s population, more than 600,000 new jobs will need to be created in the Nairobi area in the next six years.

A significant body of research demonstrates that scaleup firms are the drivers of job creation in cities like Nairobi. The World Bank Enterprise Survey, last conducted in Kenya in 2013, also demonstrates the significant impact that scaleups have on job creation: only 5 percent of Kenyan companies were scaleup firms growing at 20 percent or more each year, but these scaleups created 72 percent of the total new jobs generated during the previous three years.

Cities that wish to foster the growth of more scaleup firms and become hubs of entrepreneurship must foster the development of the local entrepreneurship ecosystem – the way individuals, companies, organizations, and governments interact to influence the development of local entrepreneurs and their firms. This is the single most important task a city can undertake to improve its economy. Successful ecosystems for high-growth companies follow a specific cycle of growth, in which entrepreneurs who succeed in building scalable firms go on to reinvest their financial, intellectual, and social capital into the next generation of local entrepreneurs and companies.

Read more of the report’s findings below.

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