International Labour Organisation (ILO) recently published a report called Small matters: Global evidence on the contribution to employment by the self-employed, micro-enterprises and SMEs. The report showed that self-employment, micro and small enterprises play a far more important role in providing jobs than previously believed.
Small matters: Global evidence on the contribution to employment by the self-employed, micro-enterprises and SMEs
To create the report International Labour Organisation gathered data from 99 countries. They drew on national household and labour force surveys. The survey found that these so-called ‘small economic units’ together account for 70 per cent of total employment. These numbers show that these so-called ‘small economic units’ are the most important drivers of employment.
The International Labour Organization (ILO) report findings have a “highly relevant” implications on policies and programmes on job creation, job quality, start-ups, enterprise productivity and job formalization. According to the report, there needs to be more focus on these ‘small economic units’
More on the Report
Here are some key findings from the report:
- An average of 62 per cent of employment in these 99 countries is in the informal sector. These informal sectors working condition tend to be inferior. They tend to have a lack of social security, poor occupational safety and health, lower wages and weaker industrial relations. The report shows that informality level varies widely. It ranges from more than 90 per cent in Benin, Cote d’Ivoire and Madagascar to less than five per cent in Austria, Belgium, Brunei Darussalam and Switzerland.
- According to the report, in high-income countries, 58 per cent of total employment is in small economic units. In low and middle-income countries the proportion is considerably higher. It also shows that in countries with the lowest income levels the proportion of employment in small economic units is almost 100 per cent.
International Labour Organisation Recommendations
Based on the findings from the report, here are some recommendations from ILO
- They advise that small economic units should be a central part of economic and social development strategies. The report highlights the importance of creating an enabling environment for such businesses. It says that it is important that they have effective representation and that social dialogue models also work for them.
- They also advised that efforts should be made to understand how enterprise productivity is shaped by a wider “ecosystem“.
- ILO advises that they facilitate access to finance and markets.
- They also advised that efforts should be made to advance women’s entrepreneurship.
- ILO advises the encouragement of the transition towards the formal economy and environmental sustainability.
For the full report, please click here.