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close this bookJob Quality and Small Enterprise Development - Working Paper No. 4 (ILO, 1999, 35 p.)
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View the documentForeword
View the documentExecutive Summary
Open this folder and view contents1.0 Introduction
Open this folder and view contents2.0 Description of the situation
Open this folder and view contents3.0 Practical experiences
Open this folder and view contents4.0 Lessons from practical experience
View the document5.0 Main findings and conclusions
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Executive Summary

This Technical Paper is the first is a series of papers to be produced by the ILO on the ways in which the qualitative aspects of employment within small enterprises can be improved, along with the creation of new employment opportunities. That is, whilst small enterprises are being recognised for their increasing role in the creation of new jobs, there is a growing need to promote the improvement of quality aspects of employment within this sector.

Drawing from a range of literature and research on small enterprise development this paper highlights the changes to the external and internal influences on small enterprise operations and the factors affecting job creation and job quality. Despite their increasing importance as creators of new employment opportunities, small enterprises have been more likely to be associated with inferior pay and working conditions. However, a closer analysis of global experiences in both developed and developing countries demonstrate that this is not inevitable. There are strong suggestions that an association between small enterprise incomes and working conditions are the basis on which many small enterprises compete.

There are also indications that small enterprises compete by meeting new demands for quality, productivity, reliability, innovation, flexibility and a capacity to adapt to changing needs. Small enterprises, therefore, may 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 the adoption of adequate social protection mechanisms. In fact, good conditions and a capability to meet current competitive needs may be mutually supportive and may provide a basis on which small enterprise development can be more effectively positioned.

A series of programme initiatives aimed at improving job quality within small enterprises are reviewed. This review shows that small enterprises and the communities they inhabit can be assisted to gradually raise their competitive capabilities and working conditions in tandem.

In addition, the links between working conditions and living conditions is established. These connections can be very close within informal and micro-enterprises. Equally close, are the connections between local and regional economic development and the environment or operating culture in which small enterprises are located. Improvements in job quality can, be accommodated within developmental measures that improve the competitiveness of the community and its surrounding region, along with the small enterprises located in these areas. These kinds of integration strategies should be considered in a holistic approach to development. In addition, 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 should also be part of that environment. As should strategies to link firms to markets and technical support organisations.

The roles of social partners are found to be extremely important. 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 help to drive a progressive process of change at both the enterprise and community levels. 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.

Finally, this paper presents the need for qualitative aspects of employment within small enterprises to become fully incorporated into economic development strategies. Where the goal of policy is only jobs, but good quality jobs and high quality enterprises.