Building Competitive Green Industries

Photo: Stephan Bachenheimer / World Bank.There is also inequity in theawareness of and access to supportfor SMEs. The fact that it is cheaperto reach those who are located inmore accessible places meansrural and remote areas are at animmediate disadvantage (Hunt,2005). For example, owing to itsphysical presence in Nairobi, theKenya CIC has a Nairobi-heavyportfolio of businesses in incubation(Anjarwalla, 2013). There is also agender imbalance: 80 percent ofthe entrepreneurs supported bythe Kenya CIC are men, perhapsresulting from the traditionalpatriarchal culture.The SMEs surveyed highlightedareas where they could usegovernment support in growingand overcoming some of the keybarriers they face with the top threeareas relating directly to accessingcapital (see Figure 5.7). Forty-threepercent thought the governmentcould provide more research anddevelopment grants, 31 percentTABLE 5.1. Barriers and opportunities faced by Kenyan SMEsIndustry-specificDomesticbiogasIndustrialbiogasMain barrierMarket is restricted by requirement fortwo standing cows, water usage, and largeinstallation costUpfront capital investment is requiredMain opportunityInnovative financing mechanisms such as thepay-as-you-go systemDemand from companies with large quantities oforganic waste, such as dairy and sugarEthanol Upfront capital investment is required Market set to expand as new legislation forcessugar companies to diversify into ethanolproduction; opportunity for SMEs in distributionand the appliance marketCrop-basedbiofuelsMarket-wideSkillsLand tenure and food security issues result indramatic opposition to proposed development;uncertainty over potential due to lack of apublished biofuel policyLack of business skills; inequity in access tosupportImprovement in crop efficiency on marginal landsIncubation and finance support from the KenyaCIC and other government and donor programsaimed at promoting the SME sectorMarkets Poor infrastructure impedes transportation Businesses looking to source locally to keepcosts down58 Building Competitive Green Industries: The Climate and Clean Technology Opportunity for Developing Countries