Supporting very small scale economic activities

However unintentional, certain macroeconomic policies frequently have deleterious effects on both labour-intensive production techniques and smaller enterprises. Given the importance of the informal sector, governments should consider ways to reduce antagonism between players in the informal sector, the formal sector and the state. Monetary and fiscal policies, as well as policies affecting trade, exchange rates, pricing, labour and wage regulations, can be biased against micro and small and medium-sized enterprises. Given this possibility, it may benefit nations with poor populations to examine systematically their policy framework and take measures to address any unwarranted disincentives to the promotion of the micro and small/medium-sized sector. Other aspects are also critical, particularly technical assistance, including assistance for identifying promising projects, preparing feasibility studies, organization and management of an enterprise, the process of selecting technologies and using them efficiently, quality control, means of transportation, and marketing. The advisability of regulatory provisions hampering the technical progress of enterprises in the informal sector should come under close critical scrutiny. While the national level is the prime mover, technical assistance from international agencies should be available as needed.

By supporting small-scale enterprises, encouraging government institutions to transfer some of their functions to small contractors, opportunities are concentrated on the working poor. They may be aided by employment opportunities, labour-based public works programmes and assistance to home-based industries in the form of small loans, encouragement of association for home workers and minimum levels of servicing. Obviously a balance must be struck between a low wage which benefits labour-based works and allows most people to at least have some income, and a system of exploitation.

ILO assists governments to promote micro-enterprise development by increasing the availability of improved techniques, and by the more efficient dissemination of technological information and advisory services.

An analysis from the 1980 USA Census, based on a question of travel to work, estimated 2 million Americans with home-based businesses. The Small Business Administration of the USA estimated 5 million people run home-based businesses (1986). A 1984 survey by AT and T projected 10 million USA households are involved in home-based businesses, with fewer than one-third employing someone outside the family in the business.