Contributions of Small Enterprises According to the Bolton Report, Small enterprises area) A productive outlet for enterprising and independent individuals. (Some of whom maybe frustrated underachievers in a large, more controlled environment b) Innovators of new products, services and processes c) The breeding ground for new industries d) A seedbed from which tomorrow’s larger companies will grow, providing entry points for technopreneurial talent who will become the industrial captains of the future e) Specialist suppliers, or subcontractors to larger companies f) Contributors to the variety of products and services made available to customers in specialized markets, too small for larger companies to consider worthwhile. M ARKETS “A market is any arrangement that people have for trading with one another (Dolan; 1988, pg 9). Markets play a coordination role in an economy. Some markets are organized and visible e.g. the Zimbabwe Stock Exchange (ZSE), the Zimbabwe International Trade fair (ZITF), the Foreign Currency Auction Floor, the Zimbabwe Book Fair (ZBF), etc while others do their work informally e.g. Mbare Musika in Harare. Whether visible or not, markets play a key role of putting scarce resources to their best uses in meeting peoples wants and needs. Roles of Markets a) Transmission of Information In order to put resources to their best possible uses, decision makers must know which resources are scarcest and which uses for them are best. Markets transmit information about scarcity and resource values in the form of prices. If a good becomes scarcer, its price is bid up. The rising price signals buyers to cutback on the amount of that good that they buy and alerts producers to find new sources of supply or substitute less costly resources. As a good becomes more abundant, its price tends to fall. The falling price signals users to favour that good over more costly ones. b) Provision of Incentives Consumers who are well informed and spend their money wisely achieve a higher standard of living with their limited resources. Workers who stay alert to job opportunities and work where they can be most productive earn the highest possible incomes. Profits motivate business managers to improve production methods and tailor their goods to consumers needs. c) Income Distribution People who supply factors of production receive high incomes if they put them to the best possible use. People with fewer skills or resources to sell receive lower incomes.
