small_economic.htm

Until the late 19th century, nearly all manufacturing and production was done at home or in very small quarters. All these activities were home-based businesses as we now know them.

Today, home-based activities are increasing worldwide. The global economy, the Internet, and the need for extra income from small economic units in developing countries are contributing factors.

In developed nations, the lifestyle available from working at home is an attraction. This kind of enterprise also provides financial support as extra income or as the main employment for unemployed workers. What's more, many countries are now changing religious and cultural restrictions regarding women. Pressures on family finances and women’s rights movements are causing some changes in these attitudes. There is also worldwide effort to overcome poverty, and small home-based units provide one avenue for doing this.

Why are small economic units useful?

The required investment is small.
Housing space already acquired is available at no extra cost.
All family members can contribute to the financial health of the household.
These ventures are convenient for those who are also responsible for daily household chores or raising children.
Barriers to home business in some areas:

Illiteracy—Many poor areas have large populations of illiterate people. The struggle to survive overcomes any thoughts of education. To progress in the 21st century, a minimum level of literacy is necessary.

Pressures of Poverty—Although some countries are developing free education programs, this often forces families to decide whether to educate their children or send them out to work. It’s a difficult decision when daily life is so demanding. Poverty itself impedes progress of any kind.

Poor or Nonexistent Transportation—Decent transportation is frequently unavailable. Many places have no electricity, no telephone lines, and no radio or TV.

Religious and Society Taboos—Some cultures are opposed to certain people working, especially outside the home. This can restrict the effectiveness of poverty improvement plans.

Fear of Outside Influences—Many fear outside influences, particularly from Western cultures. The concern is that these may destroy the traditional, native culture.
Is anything being done to remove these barriers?

The focus is turning toward actually getting money to local people, but challenges abound. Global companies often take all the profit back home. When governments are given grants, the people just get a minimum part; the rest is kept for government use. Responsible companies have scrapped plans in a few areas because the authorities would not let them pay workers a fair pay directly. The government wanted to receive the money and dole out a minimum wage.

Fortunately, there are also success stories:

The Internet offers opportunities to telework using a computer. Most of the teleworking jobs in developing countries are actually performed in commercial areas and not in homes. Many such jobs are available to women, and some have expressed a desire to work close to home but not AT home. (Alloo)

Success stories about programs that actually help individuals:

Thailand, Brazil, Tibet, and St. Lucia: http://travel.boston.com/stories/051002_thai_responsibly.html
East Africa and Fiji projects: http://www.boston.com/globe/editorials/bigidea/ ecotourism_honey.shtml
Despite many obstacles, Information Technology (IT) is being used to empower women in small enterprises. A lot of service jobs are outsourced by major Western companies. Other profitable opportunities exist for women's small-scale enterprises in business-to-business and business- to-government markets. (Hafkin and Taggart)

Other ways women can use IT are:

Female farmers could greatly increase productivity with access to information on improved agricultural inputs, weather, markets, new production techniques, and farming technologies.

Entrepreneurs may benefit from marketing information and the opportunity to advertise their niche market products everywhere.

Adequate communication is essential for IT businesses to thrive. One successful model is Grameen Phone in Bangladesh, téléboutiques in Senegal and Morocco, and phone shops in Ghana. Not only do the entrepreneurs in the phone business make money, they provide many around them with access to the outside world.
Financing is an insurmountable obstacle to many. Grameen Bank addressed this in Bangladesh. They discovered that even with these loans, it takes a poor person six to 10 successive loans (one year each) and very hard work to cross the poverty line. The first loan is often as little as $50 (US) with the average a little over $100 (US). See the Results International Website (www.action.org/microjoel.html) for more about Grameen Bank.

Similar banks operate in the Philippines, Indonesia, El Salvador, Mexico, and other countries.

There are also poverty banks in the United States. Most offer business training and support in addition to loans.

Activities that support and promote economic units:

Ecotourism has been a boon to many under-developed areas. Events of September 11, 2001, and later have diminished its value, however. These are two indications of the importance of ecotourism:
In the Asia-Pacific region, ecotourism represents 20% of all travel.
Ecotourism travel to Africa accounts for up to 80% in Kenya.'
Here are three discussions of ecotourism:
“Clean Industry or Culture Killer”
(www.boston.com/globe/editorials/bigidea/ ecotourism_honey.shtml)
“The Accidental Ecotourist”
(www.americanwaymag.com/business/feature.asp?archive_date=1/1/2003)
“Taking the Natural Path”
(www.emagazine.com/july-august_2002/0702feat1.html)
The Non-Government Organization (NGO), Shirkhat Gah, (http://www.dawn.com/2000/10/06/nat18.htm) teaches women how to weave popular fabrics on handlooms. Its focus is in the area of Karachi, Pakistan.

This Kenyan cooperative (http://www.africaonline.co.ke/jisaidie/main.html) helps rural people market their baskets, jewelry, musical articles, and pottery throughout the world.

BEENET (http://www.idrc.ca/nayudamma/beekeeping_4e.html) helps landless farmers in India, Nepal, Bangladesh, Maldives, Sri Lanka, Vietnam, Thailand, Malaysia, Indonesia, Philippines, China, and Papua New Guinea. They make money keeping bees.

Escotel (http://www.ipan.com/PRESS/2001jan/0901esc.htm) Grameen Phone Sewa operates a local cell-phone industry in rural India. Each unit not only makes money for the entrepreneur, it usually provides phone needs to, on average, 5,000 people in surrounding villages.

The Tabitha Foundation (http://www.tabithafoundationaustralia.com/main.cfm?Page=5) offers Cambodians training in making silk and other products. After six weeks trainees usually have enough money for the equipment they need.
Financial resources include:

U.S. SBA fast-track Micro Loan lends up to $25,000. The process takes less than one week and the term is up to six years. Find the Micro Loan Intermediary near you here: www.businessweek.com/smallbiz/resources/micro_loan.htm.

Search Google (www.google.com/) with “microloan” or “micro loan” (using the quotation marks) for many other local small loan sources.

Calmeadow (203.162.7.73/webs/environment/UrbanEnvironmentProtect/
www.calmeadow.com/about.htm) is a possible source of Canadian micro loans.

Australians may qualify for the Australian Regional Assistance Programme (www.ministers.dotrs.gov.au/wt/releases/2002/june/wt33_2002.htm).

Also in Australia is the Grameen Support Group (www.action.org/summaryp.html), Australia.
Future developments for small economic units around the world:

Education is an issue that will receive a lot of attention. Not only will people learn how to get out of poverty, they will learn about their health and how to manage their families better.

Infrastructure issues will be addressed. New technology will be used to provide access to services and communication facilities of all kinds.

Perhaps there will be local movements to change social thinking about family relationships. Any such activity must be within the religious and community values of the people involved. Outsiders can’t do this.
How can small economic units contribute to overall economies outside their immediate area?

Small home-based units can be sources of products for large and small companies worldwide. The Internet can help people publicize what they have to everyone.

These small units are potential customers. The Internet makes this more possible as well.

A lot of home-based businesses provide information as their product. Small economic units are users of information
SOURCES:

Alloo, Fatma, (Founder, Tanzania Media Women's Association in the Society for International Development and UNESCO) Women in the Digital Age ?Using Communication Technology for Empowerment: A Practical Handbook, p. 14. Rome, 1998. Downloadable PDF document: (www.genderreach.com/pubs/it/execsumm.pdf)

Hafkin, Nancy, and Nancy Taggart. “Gender, Information Technology, and Developing Countries: An Analytic Study“. USAID’s Office of Women in Development. June, 2001: http://www.usaid.gov/wid/pubs/it01.htm

Honey, Martha. “Clean Industry or Culture Killer.” The Boston Globe. January 20, 2002: http://www.boston.com/globe/editorials/bigidea/ecotourism_honey.shtml

Lynn, Barry. “The Accidental Ecotourist.” AmericanWay: Trends for the Modern Traveler, 2003: http://www.americanwaymag.com/business/feature.asp?archive_date=1/1/2003.

Motavalli, Jim. “Taking the Natural Path.” Emagazine.com - The Environmental Magazine, August, 2002: http://www.emagazine.com/july-august_2002/0702feat1.html

Rubinstein, Joel. “A Poverty Eradication Strategy That Works.” RESULTS International Website: http://www.action.org/microjoel.html

RESOURCES:

This is a gateway to emerging markets, http://www.emdirectory.com/. A list of globalization issue sites http://www.brookings.edu/dybdocroot/globalization/

Article by Yank Elliott, IAHBE staff writer. Yank is a home-based entrepreneur and freelance business writer in Belhaven, North Carolina. His Website is www.furriwhalesworld.com. Contact Yank at .globalbiz@furriwhalesworld.com