|Job Quality and Small Enterprise Development - Working Paper No. 4 (ILO, 1999, 35 p.)|
This chapter presents the main findings and draws conclusions in relation to job quality and small enterprise development. It also gives specific suggestions as to which areas need attention for future research and development.
There is no doubt that small enterprises have been more likely to be associated with inferior pay and working conditions on most dimensions. However this association is not inevitable. There are strong suggestions of a link between small enterprise incomes and working conditions and the basis on which such enterprises compete. There are also indications that enterprises seeking to compete by meeting new demands for high levels of quality, productivity, reliability, innovation, flexibility and a capacity to adapt to changing needs, have advantages in this regard when various qualitative aspects of employment are present. This includes, for example superior labour relations and opportunities for worker participation, good working and community conditions (including adequate health and safety environments) progressively improving skills and equipment and adopting adequate social protection mechanisms. In fact, good conditions and a capability to meet current competitive needs may be mutually supportive.
The improvement of job quality within small enterprises draws together a number of aspects of the work of the ILO. The promotion of employment is a fundamental objective of the Organisation, whilst the improvement of working conditions and the provision of social protection measures remain important and connected themes. When dealing with these concerns within small enterprises a unique set of challenges emerge.
There is, for example, the primary challenge to find, synthesise and promote practical examples that show how improvements in the quality of employment can pay for itself through productivity gains, thereby resolving apparent conflicts or trade-offs between the quality and quantity of jobs. Where safe work environments, proper social protection and an investment into the human resource provide returns in the form of profits and sustainable additional jobs.
Small enterprises cover a wide cross-section of national economies. They can be found in most industrial sectors, they exhibit varying degrees of formality, levels productivity, use of technology and levels of output. Working conditions also vary across this spectrum as will employment potential. It is, therefore, a challenge to find ways which address these variations whilst seeking common standards of quality.
There are further challenges that arise in this field by responding in realistic and practical ways to the issues facing small enterprises. These include the need for improvements in business management skills, access to capital, information, approaches to risk management and social protection, as well as workplace health and safety. Small enterprise employers should be encouraged to view job quality as an integral component to the development of their enterprise. In addition, models and instruments for improving the policy, legal and regulatory framework for enterprise development and improvements in the quality of employment need to be developed so that they are sensitive to the (internal and external) contexts in which small enterprises operate.
There is also the challenge that comes from an appreciation that many small enterprise owners, managers and employees live in poor and inadequate conditions, which may be characterised by poor sanitation, inadequate protection from natural elements, no electricity, official harassment and over-crowding. Indeed, places of residence often become places of employment. Thus, the improvement of job quality cannot be separated from the social, cultural and community aspects of a workers life.
Improving job quality in small enterprises is a multifaceted and highly complex issue. Amongst other influences, the economic, social and cultural contexts in which small enterprises operate plays an important role, both in terms of contributing to poor job quality and to the way in which improvements can be made. Currently, achievements in this field are poorly documented. There are a number of areas where further information and knowledge concerning job quality in small enterprises is required. Of particular concern is the limited information that currently exists on international regional priorities for action in the improvement of job quality within small enterprises.
In addressing these challenges, the ILO is required to work in a pragmatic and multidisciplinary manner that remains sensitive to the needs of small enterprises in their economic and social contexts and true to the standards and quality of employment it promotes. Thus, improving job quality in small enterprise development will draw from the work of many ILO technical units. The expertise and experiences of these units will be adapted and tailored to suit the unique challenges of small enterprises as outlined above.
The casual relationships between practices that improve job quality and the promotion of productivity should be properly identified and practical and effective ways of improving job quality within small enterprises promoted. Instruments to measure and assess job quality within small enterprises must also be developed so that the development efforts can be properly monitored and assessed.
There is a need to raise awareness within a range of different organisations in regards to job quality and small enterprises, specifically, member states, worker organisations and employers. Awareness raising should emphasise the complementary benefits of improving job quality with productivity and enterprise development. It should also increase the understanding of these groups to the ways in which an environment that is conducive to the enhancement of job quality and small enterprise development can be achieved. The ILO has a clear mandate in this field and should develop concerted efforts to effectively fulfil this mandate in respect of small enterprises.
The ILO should provide technical assistance and advisory services to its constituents on a variety of matters concerning improvements in job quality and small enterprise development, reflecting the priorities outlined earlier in this paper. Specifically, this should involve the design of models and instruments that can be applied to improving job quality whilst developing sustainable small enterprises. These models and instruments will be promoted, tested, transferred and adapted through a range of networks that are used to share and institutionalise experience and expertise in this field.
Member States should make use of regionally specific criteria for the assessment, promotion and standardisation of job quality measurements relevant to small enterprises and complementary to international labour standards. Small business membership organisations, worker organisations and other forms of community and self-help associations should be better able to provide technical advice and conduct training on job quality, productivity and profitability to their members.
The policy implication of this is the need to establish conditions where a dynamic improvement process can be set in motion. Small enterprises and the communities they inhabit can be assisted to gradually raise their competitive capabilities and working conditions in tandem. Initiatives such as the ILO WISE and IWEB programmes and the activities of some intermediary institutions, such as the Garment Industrial Development Corporation, are good examples of such an approach.
These kinds of integration strategies should be firmly embedded in a whole range of local developmental and quality-raising initiatives. Such initiatives can collectively be considered in a holistic approach to development. Strategies to raise knowledge levels (such as through training, supply-chain and firm-institution networking initiatives) are seen as particularly important, as is an enabling regulatory environment. Area-based social protection schemes could also be part of that environment. Strategies to link enterprises to markets and technical support organisations should also feature.
In such a holistic strategy, developmentally minded entrepreneurial, trade union and other self-help associations can perform major roles in raising competitiveness and improving conditions. These roles go beyond traditional representative roles and may provide small and micro-enterprises with both business and social services. They may also become involved in collaborative policy networks and thereby help to drive a progressive process of change at both the enterprise and community levels. The promotion of social dialogue between government, workers, employers and relevant civic organisations to improve job quality is of primary importance. Often many small enterprises are excluded from participating in these activities due to their marginal position in society, their limited internal resources, and the lack of official recognition. This is so, not only at the national level, but also with provincial, regional and local levels.
Such an approach shifts the focus of attention from an exclusive consideration of the internal dynamics of individual enterprises, to a broader awareness of the enterprise as part of sectoral and community networks. It recognises the significance of both enterprise and community conditions, as well as community institutional support, for improving enterprise performance and competitiveness. Such a systemic perspective emphasises the need for strategies that are part of a long-term vision of rising competitiveness, incomes and conditions at the level of the whole community.
To achieve this, qualitative aspects must become fully incorporated into economic development strategies. For this to occur it will be necessary for organisations of local, regional, and national economic policy-makers take on board issues such as how to create competitive advantages. In this way an important goal of policy will not only be jobs as such, but good quality jobs and high quality enterprises.