15.

UNEMPLOYMENT
 Unempl
oymenti
swher ebyabl
ebodi
edpeopl
ewhoar
ewi
l
li
ngt
owor
kandar
e
l
ooki
ngforj
obsbutcannotfi
ndany.

• Peopl
ear
eunempl
oyedwhent
heyar
eabl
eandwi
l
li
ngt
owor
kbutcannotf
inda
j
ob.

• Unempl
oymentcanbeexpr
essedei
therasanumber
.e.
g.2,
5mi
l
li
onorasa
per
cent
agee.
g.30%.

Unempl
oymentrat
e=Unempl
oyedper
sonsx100
Labourf
orce

Labour
for
ce

I
trefer
stothoseinempl
oymentplusthoseunempl
oyed.Thusf22.
5mill
i
onpeople
wereemployedand2.5mil
l
ionpeoplewereunempl
oyed,theunempl
oymentr
ate
wouldbe

2,
5mil
l
ionx100
22,
5+2,
5mi
l
li
on =10%

I
nZi
mbabwet
hel
evel
ofunempl
oymenti
sest
imat
edt
obeov
er80%.

Ty
pes/
CausesofUnempl
oyment

 Fr
ict
ional

 St
ruct
ural

 Cy
cli
cal
/DemandDef
ici
ency

 Technol
ogi
cal

 Seasonal

 Vol
unt
ary

 Resi
dual

Fr
ict
ionalunempl
oyment

 I
tar
isesf
rom geogr
aphi
cal
l
yandoccupat
ional
l
yimmobi
l
ityofl
abour
.
 Labourisnotper
fect
lygeogr
aphical
lymobil
e.Somepeopleremain
unemployeddespi
tetheavai
labi
l
ityofj
obsinotherpart
softhecountr
y,
wheretheyarenotwil
li
ngandpreparedtogoandwor korcannotaf
fordt
o
tr
avel
.

 Labouri
sal sonotper
fectlyoccupati
onal
l
ymobile.Somepeopl
er emai
n
unemployeddespit
ethef actthatt
herear
ejobsavail
abl
erequi
ri
ngskil
l
s
andquali
ficat
ionswil
ltheydonotpossess.

 I
talsoar
iseswhenwor kersar
ebetweenjobs,wher
etheydonott
aket
he
f
ir
stjoboffer
,byspendtimelooki
ngforbett
erpai
djob.

Pol
ici
est
oreducef
ri
cti
onalunempl
oymenti
ncl
ude:

 Lowerr ealvaluesofunempl oymentbenefi

t-
Ift
hegov ernment
reducedther ealvalueofunemploymentbenefi
ts,orli
mitedthe
durati
onofacl ai
m, searchti
mesbetweenjobscouldber educed
evenfurtheraswor kerswouldhav et
oquickl
ytakeonnew
posit
ionsbef oretheirf
inanci
alsi
tuat
ionsdet
eri
orated.

 Improvejobi
nformation-Improvi
ngt hef l
owofi nf
ormati
onwi t
h
regar
dstotheavail
abili
tyofpart
icularempl oymentisonesuch
measure.Thi
scanbedonebyest abli
shingpublicandpri
vate
employmentagenci
eswhoar eresponsiblef orl
i
nkingpotent
ial
employeetot
heirpotential
employ ers.
 Rel
ocat
ionofi
ndust
ri
esandser
vices

 Adver
ti
singi
npubl
i
cmedi
ae.
g.nat
ional
newspaper

St
ruct
uralUnempl
oyment

 I
tari
sesf
rom i
mbalancesorfundament
alchangesi
nthest
ruct
ure
oft
heeconomyorcompany .

 Overti
met hedemandandsupplypatt
ernschanges.Some
i
ndustri
esexpandandother
scontract
/decli
neandcutdownthe
l
abourrequir
ements.Acompanycanrestruct
ureanddownsi
zeit
workerfor
ceoreli
minat
esomedepar t
ment s.

 Ital
soari
seswhenwor ker
sloset
hei
rjobsbecauseofdemand
swit
chesfrom t
hei
rindust
ri
estomorecompetit
ivef
orei
gn
i
ndustr
ies.

 I
nmanydev el
opedeconomiesmanufactur
ingindustr
iesmoveto
dev
elopi
ngcountr
ieswher
elabourcostsarelower.Forexampl
e
 manyUSAcompanieshaver
elocat
edpr
oduct
ionf
aci
l
iti
est
oChi
na
wher
elabouri
scheaper
.

Measur
est
ocor
rectst
ruct
uralunempl
oyment

 Regionalpol
icyi
ncentives-
Gi v
esgrantsandsubsidiestofi
rmstolocat
ein
areasofhighunemployment .However,t
hisdoesnotsolvetheprobl
em of
occupati
onali
mmobi l
ity
.Of t
enr egi
onalpol
icyrequi
resextr
aret
raini
ngschemes
togiveworker
stherelevantskil
lstoall
owt hem t
otakeupnewj obs.
 Wor kertr
aini
ng-Spendingontrai
ningschemestore-
skil
ltheunempl
oyed
thr
oughinvestmentinvocati
onaleducati
onorguar
anteedworkexper
iencef
or
unemployed"out
siders"int
helabourmarket.
 I
mpr ovi
nggeogr aphi
calmobil
ityofl
abour-
Thegov er
nmentcoul
dpr ovide
grantsorlowcosthousingtoencourageworkerstomov et
ootherregionswher
e
therearejobs.Theproblem wi
ththi
spoli
cyisthatpeopl
earei
nherentl
yi mmobi
l
e
astheyareof tenboundbyfamilyandsoci
alti
es.
 Changet heeducati
oncurriculum t omeett herequirement sofi
ndustry
Oneappr oachistosimplyleavet hepr oblem ofstr
ucturalunemploymentt othe
mar ket
.Someeconomi st
sar guet hatinterv
entionslowst henatur
alreal
locati
on
ofresourcestohighgrowthar easandonl ymakest hepr oblem wor
se.Inareasof
abov eaverageunemploymenti tmaymakesomesenset oal l
owwagel evelsto
fall
toattractnewcapital
intoanar ea.
Cy
cli
cal/DemandDef ici
encyUnempl oyment

 I
tar
isesasar
esul
tofl
ackofori
nadequat
eaggr
egat
edemandi
ntheeconomy
.

 Aggr
egateexpendi
tur
ewi
l
lbei
nsuf
fi
cientt
oachi
evef
ull
empl
oyment
,resul
ti
ngi
n
adef
lat
ionar
ygap.

 Therewi
ll
benoneedf
orf
ir
mst
oempl
oymor
ewor
ker
sbecauseofl
owdemand
fort
hei
rproduct
s.

 Demandf
ormostgoodsandser
vicesf
all
s,l
esspr
oduct
ioni
sneededand
consequent
lyf
ewerwor kersar
eneeded,wagesarestickyanddonotfall
tomeet
theequil
i
bri
um l
evel,
andmassunempl oymentresult
s.DemandDef i
cient
Unemploymentisassociat
edwithaneconomicrecessionorashar
peconomic
slowdown

Measur
est
ocor
rectcy
cli
cal
/demand-def
ici
encyunempl
oyment

 I
ncreasedGov er
nmentExpendi
ture-
TheGov ernmentcanr aisethel
evelofi
ts
ownspendi ng.Thegover
nmentcouldrai
securrentexpenditure(f
orexample
rai
singpaylevelsi
neducati
onandthehealthservice).Sust
ainedeconomic
growthprovidesaplat
for
mf ormorejobstobecr eatedintheeconomy .
  LowerTaxat ion-Ar eductionindir
ectt axat
ionincreasesconsumer s'
disposable
incomeandshoul dboosthousehol dspending.Theef fectmaybegr eaterift
axes
arecutforpeopl eonl owert hanaverageincomes.Theset ax-
payersarelikel
yto
spendagr eat erper centageoft hei
rdisposableincome.
 Loweri nterestr ates-Arelaxati
onofmonet ar
ypol i
cythroughlowerinterest
ratesencouragest hedemandf orcredit,r
educessav ingandincreases
consumer s'real'effecti
ve'disposableincomes; al
lofwhi chwil
lboost
consumpt ionanddemand.I tmayalsoencour agef i
rmst oinv
est,asthemar ginal
costofinvest mentwi l
lfall
.
SeasonalUnempl
oyment

I
toccur
sinthoseindust
ri
eswit
hmar kedseasonalpat
ter
nsof
demandli
ketour
ism,constr
uct
ionandagri
cult
ure.

 Theytendtofl
ouri
shincertai
nti
meoftheyear,
theref
oredemandfor
workersfl
uct
uatesaccor
dingtoti
meoftheyear.Worker
sareoutof
workbetweenperi
odsofempl oy
ment
,li
keactorsandconstr
uct
ion
workers.
 Thi
stypeofunempl
oymenti
smai
nlyexper
iencedi
nthef
oll
owi
ngi
ndust
ri
es;
 Agr
icul
tur
e

 Tour
ism

 Ret
ail
i
ngand

 Const
ruct
ion
Thediagram abov
eill
ustr
atethatmoreworker
saredemandedduringt
heseason(Q2)
.
Offseasonti
mewi ll
resul
ttoadecreasei
ndemandofl abourf
rom Q2toQ1.Thi
sfal
li
n
demandf orl
abourwill
resul
ttoseasonal
unemploymentmeasuredbydist
anceQ2to
Q1.

Measur
etocor
rectseasonalunempl
oyment

 I
ntr
oduct
ionofi
rr
igat
ionschemes.

 Tr
aini
ngwor
ker
ssot
hatt
heywi
l
lbef
lexi
ble.

 Gov
ernmentf
inanci
alassi
stancet
oencour
agesel
f-
empl
oyment
.

5.
Technol
ogi
calUnempl
oyment
.
Thisar i
sesfrom theintroducti
onofbet termethodsofproduct
ion.Causedby
i
ntroductionoflabour-savingmachi neryi.
e.whereprodcer
sshiftf
rom laborintensiv
e
systemst oacapi tali
ntensivesystemsofpr oducti
on.Manuall
abourreplacedby
machi nes.forexampleATMsi nbanki ng.
6.VoluntaryUnempl oyment
Thisiscausedbypeopl ewhodel iberatel
ydonotwantt owork.Iti
scommoni n
developedcount ri
eswher esomepeopl ecaninheri
talotofwealthfr
om t hei
rpar ent
sor
wher
etheycangetunempl
oymentbenef
it
s.

7.Classicalunempl oyment/ realwageunempl oyment

Classicalorreal-
wageunempl oymentoccur swhenr eal wagesf orajobar esetabov e
themar ket-clear
inglev el,causi ngthenumberofj ob- seekerstoexceedt henumberof
vacancies.Manyeconomi stshav earguedthatasunempl oymenti ncreases, themor e
thegov ernmenti ntervenesi ntot heeconomyt ot r
yt oimpr ovet hecondi tionsoft hose
withoutjobs.Forexampl e,mi nimum wagel awsr ai
set hecostofl aborerswi thfewskil
ls
toabov ethemar ketequi li
brium, result
inginpeoplewhowi sht owor katt hegoi ngrat
e
butcannotaswageenf orcedi sgreaterthanthei
rv alueaswor ker sbecomi ng
unempl oyed.Lawsr estricti
ngl ayoffsmadebusi nessesl esslikel ytohireint hefir
st
place,ashi ri
ngbecomesmor er i
sky,l
eavingmanyy oungpeopl eunempl oyedand
unablet ofindwor k.

8.har
dcor
eunempl
oyment

EFFECTSOFUNEMPLOYMENT

1)Hi
ghpov
ert
ylev
elsassoci
atedwi
thi
nabi
l
ityt
obuybasi
scommodi
ti
es.

2)Highmoral
decadenceandcr
imer
ate,
whi
chi
ntur
nst
if
leeconomi
cgr
owt
hand
devel
opment.

3)For
cedmigrati
onofsomepopul
ati
onuni
tst
onei
ghbour
ingcount
ri
est
olookf
or
workanddecentl
i
ving.

4)Pol
i
tical
inst
abi
l
ityaspeopl
ear
eeasi
l
yinci
tedagai
nstt
hegov
ernmentoft
heday
.

5)Unemploymentisnormall
yassoci
atedwit
hunprecedent
edlev
elsofsui
cidaldeat
hs
andmurder samongstt
heunemployed.I
nBri
tai
ninev er
yonemill
i
on,deaths,15000
aresui
cides.

6)Personal
psychologi
cal
tor
tur
esuf
fer
edbyt
heunempl
oyedandt
hei
rfami
l
ies,
rel
ati
vesandfri
ends.

7)I
tcreat
esafi
scaldr
agnetwher
ethosewhoar
eempl
oyedar
eov
erbur
denedbyhi
gh
t
axestosust
aint
hegover
nment.

8)tr
epresent
sacosttothegov
ernment
,asi
thast
opayoutt
ransf
erpay
ment
sand
UnemploymentBenef
it
s.
SOLUTI
ONSTOUNEMPLOYMENT.

1.I
NCREASEINCAPITALFORMATI
ON:-Gover
nmentshoul
dest
abl
i
sht
hel
abour
i
ntensi
vei
ndust
ri
est
oincr
easet
herat
eofemploy
ment.

2.I
NCENTI VEFORPRIVATESECTOR:-Gover
nmentshouldprovi
dethel
i
ber
al
concessi
ons taxhol
i
daystot
hepri
vatei
nvestor
stoi
ncreasetherat
eof
employment.

3.ESTABLI
SHMENTOFSMALLSCALEI
NDUSTRY:-I
ntherur
alar
eassmal
lscal
e
i
ndustr
yshoul
dbeest
abl
i
shedt
oremov
ethedi
sgui
sedunemploy
ment.

4.TECHNI CALTRAININGCENTERS:-Techni
calandcommerci
alcent
ersshoul
dbe
establ
ishedtoprov
idetr
aini
ngandski
ll
tothepubli
c.I
twi
ll
beveryuseful
in
curtai
l
ingtheunemployment.

5.CONTROLONPOPULATI ON: -Thereshouldbeaneffect

ivecheckont
he
popul
ati
ongrowth.Fami
l
ypl anningprogram shoul
dbeintr
oducedandpopul
ati
on
shoul
dbereducedaccor
dingt hesizeofnaturalr
esour
ces.

6.I
NCREASEINEFFECTI
VEDEMAND: -Gover
nmentshouldincr
easether
ateof
i
nvest
mentbyest
abli
shi
ngt
hevar
iousindust
ri
est
oincreasetherat
eofemploy
ment
.

7.EMPLOYMENTEXCHANGEOFFICES:-Theof
fi
cesshoul
dbeest
abl
i
shedt
o
prov
idet
hepr
operi
nfor
mat
ion'
saboutt
heemploymenttot
hepubl
i
c.

8.MONETARYANDFISCALPOLICY:-Gover
nmentshoul
dfr
ametheabovepol
i
cies
i
nsuchamannert
hatmaximum chancesofempl
oymentmaybeprov
idedt
othe
publ
i
c.

MEASURESTOCONTROLUNEMPLOYMENT

Fol
lowi
ngstepsmustbet
akenbyt
hepeopl
eandgov
ernmentt
ocont
rol
thepr
obl
em
ofunempl
oyment&under
-empl
oyment
:

1.Est
abl
i
shmentofEmpl
oymentOf
fi
ces

Ther
eisnotanysi
ngl
eof
fi
ceforthei
nfor
mat i
onaboutempl
oymentopportuni
ti
esi
n
Zi
mbabwe.Moreandmoreemploymentoff
icesshoul
dbeest
abl
ishedthesewould
causei
nreduct
ioni
nunempl
oyment

2.Popul
ati
onCont
rol

Fastgr
owt
hrat
eofpopul
ati
onshoul
dbecontrol
l
ed.Duetopopul
ati
oncont
rol
ther
e
wil
lbemor
eemploy
mentopport
unit
iesandr
educti
oninunempl
oyment.

3.Capi
tal
Accumul
ati
on

Aggregatesav
ingandinv
estmentshoul
dbeincr
easedtorai
set
helevelofcapi
tal
for
mat i
on.Thi
swill
resul
tinpr
omotingt
helevel
ofincomeandemploymentinthe
economy .

4.Gr
owt
hofI
ndust
ri
alSect
or

Gover
nmentshoul
dpr ovi
debasici
nfr
astr
uct
uretoestabl
ishedi
ndust
ri
esi
srur
al
ar
eas.Gr
owthofindustr
ialsect
ori
sneededtoreduceunemploy
ment.

5.Gr
owt
hofAgr
icul
tur
alSect
or

Agr
icul
tur
eisthemai
nsectorofoureconomy.Itpr
ovi
desmor
ejobst
opopul
ation.I
t
i
snecessi
tytoest
abl
i
shitatcommer ci
albasi
stoprovi
demor
ejobst
ounemployed.

6.
Techni
cal
Educat
ionandTr
aini
ng

Techni
cal
educat
ionandt
rai
ningi
snecessar
ytopr
oduceef
fi
cientl
abourf
orce.

7.Pr
ovi
sionofSel
f-
empl
oyment

Peopl
eandgovernmentshoul
dmai nt
ainsel
f-
empl
oyment
.Int
hiscasegov
ernment
shoul
dprov
idethem cr
edi
tfaci
li
ti
es.

8.Gr
owt
hofSmal
l
-scal
eandCot
tageI
ndust
ri
es

Gover
nmentshouldencouragethesett
ing-upofsmalli
ndust
ries,
parti
cularl
yinr
ural
ar
eas.Governmentshoul
dpr ov
idedsubsidiesandi
nfr
astr
ucturetoestabli
shsmall
i
ndustr
ies.

9.UseofLabourI
ntensi
veTechnol
ogi
es

I
tiscompul
sor
ytouset
hel
abouri
ntensi
vet
echnol
ogi
est
oreducet
he
unempl
oyment
.

10.Reduct
ioni
nRet
ir
ementPer
iod

Ret
ir
ementagei
s60y ear
sinZi
mbabwe.I
tshoul
dber
educet
o55y
ear
stopr
ovi
de
moreempl
oymentopport
uni
ti
es.
11.Subsi
diest
oPr
ivat
eSect
or

Stabl
egov
ernmenti
srequi
redt
osubsi
dizet
hepri
vat
esect
or.Gover
nmentshoul
d
helpt
hepri
vat
esect
ortodevel
opment
.Itwi
l
lcr
eatemoreemploy
mentchances.

12.JobonMer
it

Gover
nmentshouldeli
minat
ethenepot
ism andf
avour
it
ism.Employment
oppor
tuni
ti
esshouldbeprovi
dedi
naccordancet
oskil
landabi
li
ty.

13.Pr
ovi
sionofCr
edi
tFaci
l
iti
es

Governmentshoul
dpr ov
ideloanstotheunempl
oyedski
l
ledl
abourt
opromot
esel
f-
employment
.Provi
sionofcreditf
aci
li
ti
esshoul
dbeprovi
dedt
oreduce
unemploy
ment

Di
scusst
heef
fect
sofhi
ghunempl
oyment

Ef
fect
sofunempl
oyment

Negat
iveef
fect
sofunempl
oyment

- Reducedef
fect
ivedemandf
ort
hef
ir
mspr
oduct
s

- I
tincr
easesant
isoci
albehav
ioursuchasr
obber
y,whor
ing,
sel
l
ingofpl
acent
a

- I
treducesi
nvest
orconf
idence

- I
treducesgov
ernmentr
evenuesi
ncegov
ernmentwoul
dbehav
ingl
esswor
ker
s
t
ot ax

- Underut
il
isat
ionofscar
cer
esour
ces

- Br
aindr
ain

- I
nabi
dtor
educeunempl
oymenti
nfl
ati
onwoul
dri
se

- I
treducesGDP

- Li
vi
ngst
andar
dswoul
ddecl
i
ne

- I
tst
rai
nst
hegov
ernmenti
npay
ingunempl
oymentbenef
it
s

- I
thamper
seconomi
cgr
owt
handdev
elopment

Posi
ti
veef
fect
sofunempl
oyment

- Hi
ghunempl
oymentr
educesi
nfl
ati
on(
Phi
l
li
psCur
veAnal
ysi
s)
 - I
tfor
cespol
i
cymaker
s(gov
ernment
)toi
mpl
ementsoundpol
i
cies

- I
tfor
cespeopl
etobei
nnov
ati
ve

- Technol
ogi
cal
unempl
oymenti
mpr
ovesef
fi
ciencyandpr
oduct
ionandser
vice
del
iver
y.

Ther
ear
esi
xmai
nconsequencesofunempl
oyment
:

Lostoutput
Havingpeoplewhoarewi l
l
ingbutunabl
etoworkisawast eofr
esour
ces.Acount
ry
i
sthereforenotmaxi
mizingit
soutputsoli
vi
ngstandardsand
i
nternat
ionalcompet
it
ivenessi
slowerthanwhatitoughtt
obe.

Losttaxr ev
enue
Unempl oymentmeanst hatther
eisalowerrevenuegainedf
rom i
ncometax.The
potenti
altaxrevenuecoul
dbespentoni mprovingheal
thcar
eoreducat
ion.Such
spendingwoul dincr
easetheproduct
ivi
tyoft
hecount r
yandthegener
alli
ving
standards.

Governmentspendingonbenefi
ts
Spendingonjobseeker’
sall
owancewi l
lgoupthemor epeopl
etherear
ethatar
e
unempl oy
ed.Thi
srepresent
salargeroppor
tuni
tycostwhichcoul
dlimi
tthe
spendingonkeyareassuchashealth.

Pr
essureonotherf
ormsofgover
nmentspendi
ng
Gr
eaterunempl
oymentmayalsol
eadtomorecri
meorment
alheal
thpr
obl
ems,
whi
chrequir
esmoregover
nmentspendi
ngtosol
ve.

Coststotheunemployed
Theunempl oyedmaysuf f
erfrom socialdi
sadvantagesandwil
lsuf
ferfr
om alossof
i
ncome.Ther emaybeincr easedargument swit
hinhousehol
dsand/orasenseof
worthl
essnessandai
ml essness.Childrenoftheunemployedwil
lst
ruggl
eatschool
becausetheymayhavel essaccesst otoolsneededathome.

Hy st
eresis
Thisisunempl oymentcausingunemployment .Thelongersomeoneisunemployed,
themor eli
kelythatemployerswil
lseethem asunempl oyabl
e.Thisi
sbecause
stayi
ngoutofwor kforalongti
mei ndi
catesthattheymaynotbegoodwor ker
s.
Also,employersmaybecomer ust
yandoutoft ouchwithadvancesi
nmet hodsand
technology.
 Thecost
sforot
hereconomi
es

Unempl
oymenti
sli
kel
ytor
educet
radei
nexpor
tsbecauseofadecr
easedout
put
.
Thi
sint
urnl
owersADandmaycauseev
enmoreunempl oy
ment.

Acountrymayexperiencei
mmi gr
ati
onfrom count
ri
eswit
hhi ghandrising
unemployment.Thi
sisbenefi
cial
forcountr
ieswit
hanageingpopulationanda
shor
tageoflabourbutmaysoonbecomeov erbeari
ngandplaceburdenson
heal
thcare

Ent
erpr
isi
ng

Adv
ant
agesofbei
nganent
repr
eneur

•Cr eateyourowndest i
ny-Ent repr eneur saretheirownbosses.
•Theymakequi ckdecisions, choosewhom t odobusi nesswi t
hand' whatwor kthey
willdo
anddeci dewhathour stowor k,aswel laswhatt opayandwhet hertot akev acati
ons.
•Reachy ourf ullpot enti
al-Ent r
epr eneur scandowhatt heyar epassionat eabout .
•Reapi mpr essiv eprofi
t–Ent r
epr eneur shipoffersagr eaterpossibil
ityofachi evi
ng
signifi
cantf inancialrewardst hanwor kingf orsomeoneel se.
•Cont ri
butet oSoci etyandber ecogni sedf oryouref forts-mostent repr eneurshelp
the
l
ocal economy ,butsome, throught heirinnovati
ons, contributetosociet yasawhol e.
One
exampl eisent repreneurSt ri
veMasi yi
wa, whoco- f oundedEconetandhel pst he
Zimbabwean
communi tyt hroughof feri
ngschol arships.Corpor ateSoci al Responsibili
ty[CSR]
•Col l
ectpr est i
ge-Ther eispr estigei nbei ngtheper soni nchar ge.

•Employmentcr eation
•I
nfrast
ructuraldevelopment
•Revenuet othegov ernmentthroughtaxati
ont
otheZIMRA
•Raisestandardsofl i
ving
•Economi cdevelopment
•Technologyisintroducedi nt
ot hecountr
y
•provi
decompet i
ti
ont olargeorgani
sati
onshencequal
it
ypr
oduct
s

Di
sadv
ant
agesofbei
nganent
repr
eneur

•Theuncertaint
yofincome-Ther ei
snoguarant
eeofearni
ngmoneyandtheincome
can
varydail
y,monthlyandyear
ly,unl
i
keasalary
,whichi
sfi
xed.
•Ther i
skoflosi
ngentir
einvestment-I
fthevent
urei
snotsuccessf
ul,
ther
esources
thatwere
i
nv est
edgot owaste.
•Thel onghour sandhar dwor k-Thi sisespeci all
ythecasewhenest abli
shi
ngthe
venture.
Anent repreneurhasnosett i
mest ostartandf ini
shwor k.Theyworkaslongast he
sit
uat i
on
demands.
•Thehi ghl evelsofstress-Thi sresultsfrom thedesi r
etoseet heproj
ectsucceedi
ng
andt he
desirenott owast etimeandmoney .
•May beov er worked
•Mayev adepay mentoft axes
•Somear eengagedi nill
egal businessdeal i
ngse. g.sel
li
ngdr ugs
•Maybei nv olv
edi nsmuggl ingofi l
legalproduct s
•Somemaybei nv
olvedinpol it
icalissues

Thei
mpor
tanceofent
erpr
iseski
ll
stot
heeconomy

•Ent repr eneur scr eatenewbusi nesses.I nmanycases, entr

epr eneurialacti
v i
ti
es
i
ncr ease
compet it
ionand, witht echnologi cal oroperationalchanges, itcani ncreasepr oducti
vit
y
as
well.
•Smal l busi nessesbr oadent hebaseofpar ti
cipat i
oninbusi nessbyor dinar
ypeopl ein
Soci ety
i
nt hepr ocesst hi
scr eatesmor ej obs.
•Smal l busi nessesar emor elikelyt hanl ar
gecompani est opr oducespeci altygoods
and
servicesandcust om- demandi t
ems.
•Innov ationsi mpr ovet hequal it
yofl ifebymul tipl
yingconsumer s'choices.Theyenr ich
peopl e'sl ivesinnumer ousway sby , forexampl e,makingl i
feeasi er,i
mpr oving
communi cat i
ons, providingnewf ormsofent er tai
nmentandi mpr ov i
ngheal thcare.
•Ent repr eneur ialbehav iourdrivesi nnov ati
onandgr owthf ortheeconomyandf or
i
ndiv idual
compani essi ncei tinvolvesawi ll
ingnesst ot akeadv antageofunexpl oited
oppor t
uni ties.
Thus, ent repreneur splayacr uci al r
ol einmobi li
singresourcesandpr omot i
ngeconomi c
growt handsoci oeconomi cdev elopment .Til
l
si spar ti
cularl
ytruei nthedev eloping
wor l
d,
wher esuccessf ulsmal lbusinessesar epri
mar yengi nesofj obcr eati
onandpov er
ty
reduct ion.

I
ndi
geni
sat
ionpol
icy

 Indi
geni
sati
onisapoli
cyi
nwhi chlocalpeopl
eareal
l
owedtoownandcont
rol
the
meansofproducti
onandpart
icipatei
nt heowner
shi
pofi
ndust
ri
esand
companieswit
hinacount
ry.
 Reducepr
essur
eonf
ormal
empl
oymentseeki
ng.Thi
swi
l
lmeant
hatasmor
e
 peopl
eareleavi
ngt
hef
ormal
jobseeki
ngt
hesuppl
yforl
abourf
all
sandwage
rat
esincr
eases.
 Thei
ncr
easei
nwagesluremor
epeopl
eint
othel
abourmar
ketandhence
el
imi
nat
esvol
unt
aryunempl
oyment
.
 Aswei ndigeni
sethosepeopl ewhocouldnotgetemploymentont hefor
mal
marketduet ol
owski l
ls.Thesepeoplewil
lbef i
ndi
ngal
ter
nati
v esway st
owor
k
usi
ngper sonalski
l
lsinindigenousi
ndustr
ies.Thussol
vi
ngstructural
unemployment.
 Moreacti
vit
iesbecomecommer cial
i
zedunderindigeni
sati
onandtheoutputwill
i
ncreasehenceincreasethemeasuredoutput
.Increaseinout
putsimpl
yincrease
employmentofresources.From t
heKeynesi
ant heorycycl
i
calunempl
oyment
fal
l
swhenout putincreases