Measuring Business Skills Cognition: The Case of Informal Sector Entrepreneurs in Kenya

Abstract

There has been an increased interest in informal sector business activities. One of the major concerns has been the cognitive abilities of the participants of this sector, especially in view of the liberalised and highly competitive nature of business operations today. This paper presents and discusses findings of a study on measuring Business Skills Cognition among informal sector business owners. Data were collected from 208 respondents distributed over nine trading centres in both urban and rural Kenya. Business Skills Cognition was measured using three instruments to yield a continuum of scores ranging from 45 to 265 points. It was found that informal sector business owners differ in the various dimensions of business and in Business Skills Cognition. The findings are important in evaluating the usefulness of the informal sector in employment creation and the ability of the participants to earn a comparative advantage in an increasingly complex and competitive free market system.