Kenya, like the majority of African countries, has been lacking an institutionalized national science,
technology and innovation system of indicators to support evidence-based policy formulation,
implementation and maintenance to support national development. The purpose of this study was to
examine the innovation activity based on a set of core indicators to inform policies that will help
Kenya configure the sectoral system of innovation in order to respond to socio-economic challenges.
The study was based on the guidelines of the Organization for Economic Co-operation and
Development (OECD) Oslo Manual (OECD, 2005). The study employed desk top research. The
overall objective of the study was to build Kenya’s capacity to develop and use innovation indicators
in designing and implementing innovation policies and strategies for national development. The
study was an attempt to probe the activity of innovation through the collection of data on various
aspects of innovation in order to develop relevant innovation indicators and specific innovation
policies for firm growth. This study established that most firms in Kenya have embraced innovation
as a key driver of their competitiveness. The results of this study will contribute to increased
knowledge about innovation in firms in order to devise appropriate innovation policies. The need for
evidence-based policy processes is now gaining ground.