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How viable are labour intensive investments?

Personal Finance

How viable are labour intensive investments?

Tuesday June 07 2022

There is a raging debate on introducing labour-intensive instead of capital-intensive investments to curb youth unemployment in Kenya. There is a need to create more than 500,000 jobs every year. The question that lingers is how viable this is in the current era of technology?

Labour-intensive investment is when products and services are mainly produced by human workers. Machines and special tools may be used too, but overall it requires human creativity and effort to produce the product or service.

Capital intensive investment is a productive process that requires mostly fixed assets, machines, capital and plants to produce. The million-dollar question is, how do we employ labour for production and remain competitive in this era of mechanisation and advanced technology? Which areas should we focus on? Here are a few success stories.

In India, the National Manufacturing Policy identifies employment-intensive industries like textiles and garments, leather and footwear, gems and jewelry and food processing. In fact, India is a labour surplus country and that is its most important resource. Is this an area we could copy?

Less developed economies, like Kenya, should enhance more labour-intensive ventures because as a low-income economy, we cannot afford to invest in expensive capital. We need to focus on labour-intensive agriculture to curb food insecurity, embrace mining and dwell in hospitality and food service.

By partnering with organisations like African Development Bank, we could reduce our overreliance on food imports, by changing our domestic production model.

Now that Kenya is a highly developing infrastructure, we should try to adopt labour-intensive construction methods that involve the use of an appropriate mix of labour and machines, with a preference for labour where technically feasible and economically viable, without compromising the quality of the product (roads, houses). This way, our youth could end up with wages for their labour.

When these policies are finally in place to enable the economy to absorb more youth, we have to deal with our mannerisms. We must change the way we spend our money at a personal level. As we consume, we must have a long-term vision.

We must stop making statements by spending, especially on imports we could do without. At personal, family, clan, or village, we must change the way we manifest our success.

We must channel available resources towards creating employment for their youth without relying on the government. If every family, clan or village would create a job or two for the youth, the effect would be humongous.

There is a need to relook at the way we define and manifest success. For example, instead of importing a luxury fuel guzzling car as a symbol of status and success and to announce our arrival, we should instead import machinery and employ at least one person.

By importing big cars and other consumables, we lose foreign exchange and export labour. By importing machinery, there is a chance of employing one or two youth.

Instead of building a 10-bedroom monument in the village that no one lives in to make a statement, build a small factory and employ a few youth.

As a people of Kenya, starting with our elite, we must change our point of expenditure.

We should buy Kenyan goods as much as possible so that we keep money in circulation within our borders and only import production lines that will add value to our raw materials, thereby employing the youth.

Most importantly, we should train enough labour in healthcare and caregiving for export. Irrespective of the education level, we should professionalise homemaking and companionship staff to do the simple things clients abroad are not able to do for themselves.

We should equip our youth with virtues like patience, compassion (to understand what the person is going through), attentiveness, dependability and trustworthiness.

Another level with potential is nurse assistant who provide care to patients in their own homes, including monitoring their health, treating wounds, performing tests, and administering medication. Apart from the primary medical training they undertake, they need empathy, communication, collaboration and flexibility.

Above them are licensed practical nurses who provide routine care for sick, injured, or disabled patients. They are trained to coordinate with and assist physicians and registered nurses. They monitor patients and chart vital signs.

The highest-ranking in this category are the registered nurses who have more advanced training and can carry out more complex types of patient care directly to patients without necessarily being supervised by a physician or doctor.

Just like we have 40 gazetted export processing zones in Nairobi, Voi, Athi River, Kerio Valley, Mombasa and Kilifi in various stages of development by both private and public zone developers/operators, we should have a health care providers’ training for export.

This way we will avoid unprofessional modes of sending our youth abroad, sometimes to dangerous hands. This will be the game-changer that will help employ a section of our youth and bring foreign exchange to Kenya.