Kenya’s journey toward becoming an innovation-driven economy remains riddled with structural challenges.
While global economies are steadily progressing from factor-driven to efficiency-driven- and ultimately to innovation-driven stages, Kenya remains largely commodity-dependent. The country’s manufacturing sector, a potential growth engine, continues to underperform, struggling to lift its GDP contribution from a stagnant 7% toward the Vision 2030 target of 15%.
A comparative analysis with Switzerland, ranked first globally with a score of 67.5% in the 2024 Global Innovation Index (GII) by WIPO, offers a mirror for Kenya, which came in at position 96 with just 21%. Themed “Unlocking the Promise of Social Entrepreneurship,” the GII outlines seven core pillars where Kenya must accelerate reform if it aspires to join the league of top-tier innovation economies.
Institutions matter. Kenya scores just 39.6% on institutional strength compared to Switzerland’s 87.7%. To close this gap, Kenya must build a more predictable and stable business environment- politically, legally, and operationally. While Switzerland enjoys a 92.4% rating in government effectiveness, Kenya lags at 41.4%.
Sound regulation is another missing link. Kenya’s regulatory quality and rule of law score just 33.2%, a far cry from Switzerland’s 89.2%. Reforms that foster policy stability, entrepreneurship culture, and ease of doing business are urgently needed, especially since Kenya trails nearly 40 percentage points in this sub-area.
Investment in human capital and research forms the foundation of any thriving innovation ecosystem. Kenya’s 16.1% score in this pillar versus Switzerland’s 61.8% highlights chronic underinvestment in education and research. Kenya allocates relatively less to education as a share of GDP, and the pipeline from primary to tertiary remains thin.
Tertiary enrollment is low, STEM graduates are few, and inbound student mobility is limited. Research and development is even more neglected- with Kenya scoring a paltry 2.1% compared to Switzerland’s 70.4%. A Marshall Plan-style investment in R&D, university rankings, and researcher headcount is overdue.
Infrastructure shows promise, but also gaps. While Kenya performs moderately well in ICT- scoring 55.8% against Switzerland’s 82.1%- other areas need attention. General infrastructure, such as electricity access and logistics, scores just 8.5%, and ecological sustainability barely registers at 17.1%. Investment in green technologies, digital public services, and sustainable infrastructure can unlock major dividends.
Market sophistication remains underdeveloped. Kenya’s market score is 22.6%, dwarfed by Switzerland’s 66.5%. Credit access, especially for startups and scale-ups, remains a bottleneck, with Kenya scoring only 6.1%. Investment ecosystems also need a boost- Kenya’s 26.3% contrasts sharply with Switzerland’s 64.9%. Capital market deepening, increased venture activity, a diversified trade portfolio could significantly improve trade readiness and domestic market scale.
Business sophistication, where ideas meet execution, is lacking. Kenya scores 21.3%, while Switzerland clocks in at 67.2%. Knowledge-intensive employment is limited, and formal firm training is rare. The country trails in university-industry collaborations, strategic alliances, and patent activity. Kenya’s innovation linkages are especially weak at 22.2% compared to Switzerland’s impressive 80.4%. There’s also a need to absorb external knowledge through high-tech imports, IPR payments, and ICT service trade.
On knowledge and technology outputs, Kenya underdelivers. With a score of just 19.7%, Kenya is behind in creating and leveraging intellectual property. Patent filings, STEM publications, and software spending remain marginal. Labor productivity is low, and the tech component of manufacturing output is modest. Knowledge diffusion through exports of high-tech goods, ICT services, and ISO certifications is also severely constrained.
Creative outputs reveal the steepest climb. Kenya scores only 13.6% versus Switzerland’s 67.1%. Intangible asset development, creative services exports, and media production are all underdeveloped. Online creativity lags as well- Kenya’s 22.9% is far from Switzerland’s 85.4%. Trademark registrations, mobile app development, and participation in open-source projects are areas ripe for support.
However, it’s not all bleak. Kenya can build momentum through targeted interventions. Fast-tracking developments like Konza Technopolis, supporting fintech innovation at the Nairobi International Financial Centre (NIFC), and expanding regulatory sandboxes can stimulate ecosystem growth.
Universities and TVETs must prioritize research commercialization, spinoffs, and hackathon culture. County-level incubators, angel networks, and early-stage funding can transform Kenya into a startup nation- one grounded in innovation, not extraction.
Switzerland provides a useful blueprint, and Kenya has the capacity to follow it- what is needed now is better alignment between strategy, investment, and policy to drive meaningful progress.
Nicasio Karani is a banking and macroeconomics specialist, currently serving as General Manager- Special Projects and Bank Economist at Equity Group Holdings PLC.
