The smallest firms play a critical role in economic development. Small enterprises provide jobs for between a third and half of the labour force in many economies. In developing countries, small enterprises contribute to the alleviation of poverty. Small firms also form a pool from which larger firms may grow. The ability of small firms to grow depends largely on the economic condition of the country where they operate. The smallest firms present unique challenges for developing especially those experiencing economic depression. They have high birth and mortality rates, and their owners often have few assets, which can be used for collateral. The desired loans are generally of small size. Given administrative costs, traditional collateral-based lending may not be profitable.
The link between the growth of firms and economic conditions especially capital accessibility has been examined in the literature from many angles. Evans and Jovanovic (1989), Holtz-Eakin, Joulfaian and Rosen (1994), and Blanchflower and Oswald, (1998), among others, use household labour surveys to examine the importance of capital constraints as a barrier to entry into self-employment. Taking a macro-level approach, Levine (1997) reviews the evidence for the importance of financial development on firm growth and economic development more broadly using country level data. Theorists have also examined the issue of credit constraints and business startups. Aghion, Caroli, and Garcia-Penalosa (1999) develop some simple frameworks and review empirical literature on the importance of credit constraints in economies characterized by high levels of income inequality.
Support for enterprise involves both real services and the provision of information about technology flows within national boundaries among enterprises, and institutions. For this reason, government policies in developing and advanced industrial countries alike have evolved a battery of measures to assist small and medium firms in the technological change process. However, significant market segmentation in underdeveloped countries gives certain categories of enterprises greater access to funds. For instance, large firms are more likely than small firms, to obtain loans, (Oyelaran-Oyeyinka, 2003). Even then this kind of access may be limited to routine operation-type technological activities.
In Africa, small enterprises are an integral part of the industrial system, yet they do not count in official statistics and as such they rank low in priority for state support. Resources for innovative research and development (R & D) and training are not easy to obtain. Capital market and skills market failures, which are more pronounced in poor countries in economic depression has led governments of such countries to formulate policies to selectively channel funds to less favoured group of firms. They have set up specialized institutions to provide long-term finance. Quite unlike most industrialized economies, private Research and Development Institutions (RDIs) are practically non-existent, and publicly funded laboratories are often isolated from productive enterprises.
with these i would like to begin a series, this will consists of possible opportunities in the agricultural sector, import and export, arts, technology, travel, fashion and a whole lots of industries. keep it locked as we go on a ride through opportunity
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