EMPLOYMENT AND EFFICIENCY OF PRODUCTION OF SMALL-SCALE ENTERPRISES (ETHIOPIA, AFRICA)

This dissertation evaluates the importance of small-scale industries in providing employment and income in the economies of African countries. Data on small enterprises in Ethiopia is used to explore questions related to the structure of production and the composition of the small-scale industry sector. The focus of the study is more on efficiency of production and employment, sources of demand, and constraints on the development of the sector. According to the analysis of this study, the artisan and small-scale industrial sector is an important component of the Ethiopian economy in terms of providing income and employment. The empirical evidence on factor intensity and productivity also indicates that many small enterprises are "efficient" in utilizing scarce resources such as capital and foreign exchange. Small-scale industries also have reasonable demand for their products, but strengthening the linkage between small-scale industries and the agricultural sector appears to be necessary. The study also examines the socioeconomic environment (including government policies) within which the A&SSI operates and attempts to relate some of these factors to the performance of the latter. The result suggests that institutional, social, and economic constraints impede the development of the sector