How Wellers Impact is providing the catalyst for job creation and economic prosperity in East Africa
Sustainable economic growth requires the consistent creation of good quality jobs that provide a stable living wage in a safe working environment with opportunities for development. These criteria are some of the few that contribute to SDG 8, Decent Work and Economic Growth.
Impact Investment has the ability to create many jobs within sectors of varying skill levels and time commitments. Let’s explore what “Decent Work” is. Examples that fall far from the definition include forced labour, child labour, exploitation of employees through lack of welfare policies, unsafe working conditions, lack of HR support and lack of development opportunities to name a few.
Gearbox Europlacer, a technology Joint Venture (JV) between Wellers Impact, MachineANI and Europlacer is a prime example of one investment that strives to maintain fair working conditions, provides equal opportunities, trains individuals and develops skill-sets in Kenya and the region, to create more potential for employment, in turn creating more opportunities for skilled and unskilled work as well as assisting to promote sustainable economic growth.
The JV aims to retain significant value within the local economy by enabling the entire value chain of electronics manufacturing (solution design, manufacture, distribution and product life cycle) to be delivered within the country and thereby establish a solid foundation locally for growth in electronic hardware manufacture and assembly.
The JV’s business model reinforces the premise that social progress should drive financial success. The JV, which is a for-profit entity will contribute a percentage of its revenue to Gearbox, the not-for-profit sister organisation of MachineANI, that for years has trained local talent in engineering, design and production.
This in turn develops careers and jobs for skilled and unskilled workers. The opportunities for training will strengthen local businesses and industries in the Kenyan electronics sector, leading to local prosperity and a better chance of long-term sustainability for Gearbox.
Kenya has previously shown great innovation and regularly outperforms on domestic innovation relative to GDP (WIPO 2019).
At least 40 Internet of Things (IoT) companies are currently based in Kenya and the domestic demand for electronic-based systems is struggling to be met due to a lack of design and manufacturing facilities; thus instead, electronic-based systems have to be manufactured internationally and imported.
The JV aims to fill this economic gap by establishing a manufacturing facility in Kenya that is capable of prototyping, testing and assembling IoT systems, COVID response technologies and domestic monitoring utilities for water and power amongst many others.
This is aimed to increase local GDP by ensuring that the production chain of these technologies is retained in Kenya, decreasing the reliance on imports and therefore creating sustainable economic growth and more reliable and secure supply chains.
Successful SMEs help to retain and increase economic growth by providing job and skills development opportunities across sectors, as well as equity and debt financing and investment - contributing to a country’s economic growth.
The Kenyan electronics sector has a ratio of 1 to 3 direct to indirect jobs (Kenya Association of Manufacturers 2018).
By establishing a domestic manufacturing facility, the combined efforts and potential of Gearbox and the JV aims to create domestic job opportunities, ranging up to high skill level jobs and committing to gender parity across roles.
Furthermore, the JV aims to catalyse the creation of new supply chains and increase and enhance the productivity of existing ones, creating indirect job opportunities throughout the sector.
Unsuccessful SMEs in the ‘Silicon Savannah’ have previously dwindled due to a lack of diligence, fairness and honesty within companies (Emezie 2017).
The JV, in parallel with Gearbox, aims to contribute to SDG 8 by establishing fairness and providing equal opportunities for training and employment across genders and particularly enhancing the skillset and employment of young people.
In other nations, young people have led in technological fields but Kenya despite many attributes continues to be challenged by youth unemployment. Census data from 2020 showed that 38.9% of the Kenyan youth are unemployed, contrasting to the 91% of Kenyans over 35 years old who are currently employed (Business Daily 2020).
Business models, such as that demonstrated by the JV, that involve a tight coupling between fair business ethics, building a new and modern technology foundation alongside a commitment to skills development, continued learning and decent employment will help to improve the quality of life of Kenyans.
The Wellers Impact approach to fair impact investments is based on three principles. Firstly, impact measurement – the ability to distinguish good quality and decent work as well as a deep capability to measure the impact of decent work.
Secondly, achieving fairness for all parties involved. Thirdly, Wellers Impact aims to provide ongoing technical assistance across a variety of areas including management governance, communication strategies and HR strategies to ensure that SMEs operate efficiently and effectively.
By offering an ongoing commitment to technical assistance and support, Wellers Impact can ensure the business is well-positioned to attract clients and further expansion capital.
It is a firm belief that by demonstrating an ongoing commitment to the prevention of unfair working conditions and maintaining a parity of opportunities, training and jobs to women and young people whilst applying “Decent Work” ethics to individuals the business will evidence the link between pursuing SD8 and being a fair and honest increasingly global business.
Wellers Impact is a UK-based, FCA-Regulated Impact Investment Manager which works to unlock community-focused impact through SDG-focused impact investing. Through innovative investment models that utilise fair economics, Wellers Impact originates investment opportunities across three core business activities; real estate developments in partnership with local land-owning not-for-profits in East Africa, financial support for agriculture firms and supply chains globally through sustainable development finance and direct investment into private water, sanitation and plastics recycling firms globally. Investment involves risk. Suitable for Sophisticated, Professional and High Net Worth Investors only.
Business Daily. 2020. Census: 39Pc Of Kenya Youth Are Unemployed. [online] Available at: <https://www.businessdailyafrica.com/bd/economy/census-39pc-of-kenya-youth-are-unemployed-2281430>.
Emezie, S., 2017. Prospects And Challenges Of Smes In 21St Century Africa. Centria University of Applied Sciences.
Kenya Association of Manufacturers, 2018. Manufacturing In Kenya Under The "Big 4 Agenda". A Sector Deep Dive Report.
The World Bank, 2016. Share Of Youth Not In Education, Employment Or Training, Total (% Of Youth Population) - Kenya | Data. [online] Available at: <https://data.worldbank.org/indicator/SL.UEM.NEET.ZS?locations=KE>.
WIPO, 2019. Global Innovation Index 2019. Kenya Global Innovation Index. World Intellectual Property Organisation (WIPO).