Publication: Influence of technical skills on performance of manufacturing firms in Nairobi city county in Kenya
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2024-07
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Mount Kenya University
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Abstract
The contribution to Gross Domestic Product (GDP) by the manufacturing sector in Kenya has been
slow, falling from 13.8 percent in 2020 to 12.9 percent in 2021. The sector has potential to grow
and is expected to perform better, post covid-19. This is an indicator that the manufacturing sector
in Kenya is below its 20230 Vision envisaging a target of 20% contribution to the GDP. The sales
turnover of manufacturing firms in Kenya as measure of performance has been decreasing in recent
years. In 2022, the total sales turnover of manufacturing firms in Kenya was estimated to be Ksh
3.5 trillion (approximately USD 30 billion). This represents a decrease of 10.2% from 2021. There
have been some fluctuations in the net profit margin of manufacturing firms in Kenya over the
past few years. For example, in 2022, the net profit margin declined to 9.3% due to cost of
production including energy, currency fluctuation and competition from imported goods. The
study aimed to examine how technical skills practices may affect manufacturing firms’ firm
performance among selected manufacturing firms in Nairobi, Kenya. The specific objectives To
analyze the influence of information communication technology skills, data science skills and
innovative skills effect on performance of manufacturing firms in Nairobi City County in Kenya.
The theories of the study included contingency theory, and human capital theory. The study
adopted a quantitative approach and used descriptive survey research design. The study targeted
253 senior managers drawn from finance managers, procurement managers, human resource
managers, customer relations managers and operations managers. The study sampled 75, which is
30% of the total population. Data was collected by use of structured questionnaire. Data analysis
was done descriptively (mean, standard deviation, frequencies and percentages). Data presentation
was presented by use of tables and charts. The results indicated that technical skills have significant
positive effect on the performance of manufacturing firms in Nairobi City County in Kenya. The
outcomes disclosed that Information communication skills had a substantial beneficial influence
on the performance of manufacturing firms in Nairobi City County in Kenya, with a B-value of.218
and a p-value of.001. Similar result were reported for data science skills as well as innovative
skills. The conclusion is that technical skills accounted for 60.7% of the substantial variation in
outcomes for manufacturing companies in Nairobi City County in Kenya (R square =.607). The
findings of this study suggest that manufacturing firms in Nairobi City County should invest in
developing the ICT skills of their employees. This can be done through training programs,
workshops, and on-the-job training. In addition to investing in data science skills, firms should
also create a culture that is data-driven. This can be done by encouraging employees to use data to
inform their decisions and by providing them with the tools and resources they need to do so. The
study's findings suggest that manufacturing firms in Nairobi City County should focus on
developing their innovative skills in order to improve their performance. This can be done through
a variety of means, such as investing in research and development, training employees in
innovation techniques, and creating a culture that is supportive of innovation.
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Keywords
Gross Domestic Product, Currency fluctuation, ICT skills, Innovation techniques, Human capital theory