This archive report was first published on 5 July 2019.
On July 5, 2019, SYSPRO, a global provider of industry-built Enterprise Resource Planning (ERP) software, in collaboration with Strathmore University, released research findings from a study that interviewed nearly 100 companies from 12 sectors of the production and manufacturing industry in Kenya.
The study explored the productivity and competitiveness of the manufacturing sector in Kenya, the role of new technologies in improving the sector, and the state of adoption and use of these new technologies.
According to the findings, favorable taxes and regional preferential treaties were identified as the most important initiatives to increase competitiveness for both local and export markets. Other factors included reducing production costs, upgrading current technologies, and increasing production efficiency.
Prof. Ismail Ateya, Principal Investigator and Dean of Research and Innovation at Strathmore University, noted that over 85% of companies interviewed were either semi-automated or fully-automated, but many were holding onto outdated production units due to high costs of spare parts and unavailability of locally manufactured spare parts.
Counterfeits were a significant hindrance to local purchasing, and high software and hardware costs, as well as the lack of skilled labor, were major barriers to technology adoption. Manufacturers proposed tax incentives for technology purchases, better training for local technology partners, and improved availability of new technologies locally.
SYSPRO's Head of Channel, Pravir Rai, emphasized the importance of keeping IT costs low, particularly for small and medium-sized enterprises (SMEs). He noted that SYSPRO's ERP solution offers choice and flexibility, allowing companies to purchase only the necessary modules and scale as their business grows.
The study also revealed that more than half of the manufacturers interviewed felt that the government could do more to make the sector competitive and attractive to investors. Development of infrastructure, provision of exemptions, grants, and subsidies, as well as purchasing guarantees from the government, were highly rated.
