1. Background

ISTARN, the Informal Sector Training and Resource Network, in Masvingo province in Zimbabwe, aims to increase employment opportunities locally by supporting the informal business sector. It is a bi-lateral project of the German and Zimbabwean governments, implemented by GTZ and by the Ministry of Higher Education and Technology. It is based at the technical college in Masvingo town, the province’s capital.

The informal sector has been gaining recognition as a significant contributor to the Zimbabwean economy, and a dynamic engine of local growth. It contributes to development in a number of ways:

it is the area of fastest growth of new businesses and new jobs

it employs the largest number of people in any sector outside agriculture

it contributes to the indigenisation of the economy

it can be entered by people with few resources and little education

it contributes to industrialisation and slows down population drift to urban centres

it helps to replace farming at a time of increasing pressure on land

A sector which addresses such a range of key issues is clearly worthy of study and support. ISTARN has evolved as a kind of de facto action-research project, to experiment with sustainable ways of supporting informal sector business.

ISTARN was conceived as a vocational training project, with the intention of developing the technical production skills of unemployed people to enable them to go into business. Masvingo Technical College was to provide most of the formal training, and a variety of local agencies were to refer suitable applicants for training, and to support the trainees once in business. This concept was supply-driven, based on the need to utilise spare training capacity within the technical college. ISTARN was established as a secretariat within the college in mid-1995. The secretariat’s first task was to build a network of local partners who would have joint ownership of the project with the college.

ISTARN’s first partners reflected the supply-driven concept, being mainly service-providing NGOs with a strong social welfare orientation and a belief that the underprivileged need to be protected from an unfair world. This perspective resulted in an approach that was not relevant for informal sector businesses, and a gradual parting of the ways resulted as the project became operational.

ISTARN’s network partners now are representative of the clients through their associations, and encompass enterprise support agencies such as Zimbabwe National Chamber of Commerce and Zambuko Trust. Partners also include district-based training NGOs such as Life Sowing Ministries and Mwenezi Development Training Centre, and the Ministry of National Affairs, Employment Creation and Co-operatives, which has recently taken on a small enterprise support brief.

During a re-formulation of the project focus in November 1995 it was agreed that ISTARN should be driven by the needs of its clients, rather than just by the provision of technical training. Training is only one of the many kinds of support required by informal businesses, and it was felt that ISTARN should develop a broader response to its clients’ needs. The overall goal was to increase employment opportunities, and the project purpose was to develop viable enterprises through a sustainable support system.

The new focus was on non-agricultural businesses located in district centres. In practice this has led to a majority of client businesses in metalwork, woodwork and vehicle repair, with some businesses in clothing, hairdressing, electrical repairs, building. Staff believed that growth of the strongest businesses - "winners" - was an effective route to increased employment opportunities. This meant that the project had to accurately measure the performance of all its client businesses, and target its resources appropriately.

Since then ISTARN has made a series of interventions and developed a range of methods for working with informal sector businesses. These have been gradually integrated into a programme of mutually-supporting elements designed to achieve the project goal and purpose, in an ongoing process. The programme focus and emphasis has shifted more than once over the three years of its existence, in response to a changing understanding of the importance of, and the interaction between, the various constraints affecting informal businesses.

The primary cause of the boom in informal businesses in Zimbabwe is high unemployment, due to a growing population and static formal sector employment levels. It is reinforced by easy entry into this unregulated sector, where very basic skills and a small amount of cash are all that is required to start. Lack of access to wider markets means that local markets are flooded with the products of too many copycat businesses. The situation is aggravated by lack of design innovation and production skills, so product quality and consistency is often poor. A flooded market and poor products means low turnover and consequent low profitability. Expensive raw materials also keep profits down, and social obligations to provide for weaker members of the extended family consume any surplus cash a business may generate. The result is lack of investment and lack of business growth, keeping most businesses at the bottom of the market, where there are already too many. Lack of financial and business management skills increases the effects of the other factors at every stage.

The "whirlpool effect" is compounded by a split in the Zimbabwean economy between the formal and informal sectors, where economic contact is restricted to purchase of formal sector tools and raw materials by the informal sector. There is little mutual trading, or opportunities for informal sector investment and business growth through a more regular flow of work from formal businesses. Informal businesses may sink or swim, but they have no way up out of the whirlpool.

To address these mutually-reinforcing constraints, ISTARN’s areas of major activity are:

The "traditional" apprentices programme assists in the direct creation of new employment, addresses the constraint of lack of production skills, gives young people marketable skills and at the same time establishes contact between ISTARN and a range of businesses. It seeks to copy and improve on traditional African forms of apprenticeship, in the belief that a spontaneously-arising practice is inherently more sustainable. Traditionally a young person is taken on by a business owner and trained informally. The apprentice may be paid a small allowance, may not be paid, or may have to pay for training while supporting him or herself.

The scheme began by offering a short college-based technical training plus a subsistence allowance to the apprentice, but the allowance attracted some applicants who were not motivated to go into business or to learn skills. It was dropped, and apprentices are now required to pay their own way or find a sponsor. As a further test of their commitment they must also find their own host business. These tougher requirements mimic traditional practice more closely and have reduced the cost of the programme without reducing demand for places.

Selection of participants is designed as the first screening for self-employment. More weight is given to signs of commitment and initiative than to academic qualifications. Applicants negotiate their own conditions of attachment with the business owner they have found. They are then given one or two weeks of basic training in a skill area: carpentry, metalwork, dressmaking, radio and TV repair, hairdressing, motor mechanics, or refrigeration. Certain trades require apprentices to take additional short formal modules during their attachment. ISTARN staff visit each host business to ensure that it is an appropriate training environment, and make regular follow-up visits. At the end of the attachment the apprentice is formally assessed, and in some cases has the opportunity to take a Trade Test.

The programme also provides a short basic business training to the enterprise owner, in the form of the "Township MBA".

Having graduated, those trainees who take positive steps towards going into business (e.g. obtain secure premises and orders for work) are given access to a "hire-to-buy" credit facility for tool purchase, repayable over one year. They are also encouraged to participate in the business training and advisory support offered by the SBA programme, and to join their local Informal Sector Association (see Sections 3 and 4 below.)

The intention of the project is to broaden accessibility to a naturally-occurring process. The pilot phase of the project has achieved an annual throughput of approximately 150 apprentices per year. A tracer study of the first and second intakes has yielded the following results: 57% self-employed; 33% employed. There is now far more demand for places than are available on the programme. This may indicate that word has spread of the excellent employment outcomes.

The programme is essentially a business start-up initiative. Total recurrent costs vary according to trade but are well under US$1,000 per trainee on average, inclusive of failures. This is cheaper than a conventional vocational training course by a factor of 10, and includes the cost of workplace creation. It is therefore an interesting vehicle for potential investment in new job creation by the state.

The programme is popular and successful in creating new businesses. What is not known is how many apprenticeships would have spontaneously arisen without any intervention, or how many new businesses they would have started. There is a need for further research.

Several state colleges have started their own TA programmes spontaneously, and are covering their costs. But it may be politically difficult for them to maintain the "no pain, no gain" aspect of the project, which is considered vital to apprentice motivation.

The tool "hire to buy" scheme is unlikely to be taken over by colleges, and now needs a suitable local or national home, possibly a lending institution or a private business initiative.

There is a problem of apprentice saturation in popular trade sectors, and a challenge for state training institutions to respond quickly to market demand for apprentices with new and non-traditional skills. For these reasons private training providers may also be suitable vehicles for replication of the traditional apprentices programme.

The practice of finding out what is already there on the ground and emulating it, which originated in the traditional apprentices program, has become a core principle of ISTARN’s work in all programme areas.

3. Small Business Advisors (SBAs)

The small business advisors programme forms a major component of the ISTARN approach. SBAs have two functions. The first is to work with client businesses to identify problem areas, impart key management skills both formally and informally, and give appropriate practical advice to business owners. The second function is to systematically collect financial and other data from client businesses over time, in order to track business performance and to establish whether a correlation exists between interventions by the project and subsequent business growth. The two functions reinforce each other. Each SBA has a caseload of clients. SBAs are expected to visit their clients regularly, with a review every six months to monitor business progress and focus future support.

A financial monitoring field tool, the business information form or busiform, was developed by the first SBAs and tested on approximately 70 businesses, (ISTARN secretariat’s caseload at the time), then refined and simplified. The busiform provides a good snapshot of the business over a period. It enables instant comparisons with previous performance to be made and relevant questions put to the business owner.

The results of the busiform data are processed in a purpose-designed database. It is possible to produce reports on individual businesses and on businesses by sector, by gender, by advisor, by network partner, by turnover, and by other selection criteria. Data is analysed statistically and graphically and presented clearly and comprehensively for the purpose of monitoring and evaluation, and for use by the businesses and their advisors.

The busiform helps to develop a mutual understanding of the business in financial terms, facilitating constructive dialogue between SBA and business owner, and improving planning and decision-making on a range of day-to-day business management issues. It also allows the SBA to assess improvement in the owner’s understanding and management of the business, and his/her need for additional training. One measure of the success of the SBA service has been the development of a remarkable degree of trust between ISTARN and its clients, as business owners realise that ISTARN is serious about understanding their problems and assisting them wherever possible.

A credit-giving NGO, Zambuko, opened an office in Masvingo in 1997. ISTARN established a fund within Zambuko for lending to its own clients, which are recommended for loans on two grounds. Firstly, that they can prove, using their busiform records, that they are reasonably well-organised businesses with potential for growth. Secondly, that they need the loan for working capital to meet firm orders. At this stage the SBAs concentrate on preparing clients for credit, so that they are aware of the pitfalls and understand the procedures. The too-easy availability of loan finance can over-burden a fledgling business with debt. ISTARN will only put forward for loans those businesses it knows to be fundamentally strong. On this basis Zambuko has agreed to make higher first loans to ISTARN clients, and has found that they are better at repayment, achieving an average repayment rate over the first 2 years of 97.2%.

Results from busiform monitoring of 53 businesses in 1996/7 show that there were significant average increases in turnover (34%) and net asset value (219%). Employment opportunities increased, representing 69 new jobs, (1.3 new jobs per business on average). This analysis showed that the busiform is a valuable tool for gathering information about individual businesses, for comparing performance between businesses of a similar type, and for analysing the performance of a group of businesses. The busiform now forms a core part of the business advice service offered by all the project partners. It has created a standard for collecting financial data and using it to develop an understanding of the business by both advisor and owner. And it has given the supporting organisations the ability to track performance of their clients, and the potential to measure the impact of their interventions on business growth, with some degree of objectivity.

In a time of general economic decline, the informal sector in Masvingo is showing strong indications of growth, and at least part of this can be attributed to the range of support ISTARN provides. The environment in which businesses are operating is open to so many influences that any change in performance is unlikely to be caused by a single factor operating in isolation. However, the first busiform results give strong supporting evidence for the case that ISTARN’s work is helping businesses to grow.

The busiform uses figures to measure a business. There are other ways of measuring the impact of interventions, such as assessing owner capacity and attitudes in areas such as planning, risk management, understanding business finances, etc. At the time the busiform was designed, an attempt was made to formalise these methods, but the SBAs themselves decided that the results were too subjective to be useful, as they differed widely between SBAs according to their own skills, experience and perceptions.

The project strategy is to develop and prove the effectiveness of an approach, then "export" the model to partner organisations, in this case district-based training NGOs and the Ministry of National Affairs, Employment Creation and Co-operatives. The project provides capacity building support but leaves the problem of ongoing sustainability to the partner organisations. This process is currently underway in Masvingo.

SBAs currently offer a "Rolls-Royce" service to businesses which, while extremely useful for monitoring during the experimental phase of the project, may not be sustainable unless more costs can be recovered. As presently constituted the service is supply-driven rather than demand-led, since clients don’t pay for most of it. There are also question-marks over how beneficial it is to offer general advice, and over the benefits of collecting comprehensive information via the busiform, compared with cheaper methods of monitoring such as a yearly visit to count employees and make a spot assessment of net asset value.

Charging for aspects of the SBA service is a market discipline for assessing their perceived usefulness to the target business. SBAs can make charges when preparing a business plan, when providing formal training, and after preparing a successful loan application on behalf of a client. There are difficulties in charging for the general advisory service, the impact of which is varied, unpredictable and often not immediate. It may be possible to recover some costs through annual subscriptions, and to offer periodic "business audits" using the busiform, at a specific cost to the business.

To address one of these areas, ISTARN is developing a range of critical interventions, mostly in the form of very short courses aimed at specific areas of business need, such as market appraisal, product design, selling skills, costing and pricing, stock control, cash management, credit control. These will be run in place of the general SBA advice and will be fully cost-recovering. The idea is to develop high quality content and then sell the course packages to private training providers to run commercially.

SBA services provided through commercial training and consultancy companies are seen as the way forward. The traditional SBA service of general advice is largely unsustainable, and it is considered vital for sustainability to encourage provision of discrete demand-led commercial services rather than general project-based supply-driven ones.

For clients with the potential to grow more quickly, the provision of higher level specific advisory inputs, with cost sharing between the project and the client, is under development. This will require consultancy from trade specialist advisors in production and marketing.

4. Informal Sector Associations (ISAs)

To create bodies that could represent the interests of the informal sector locally, and to develop an organised client base, ISTARN facilitated the formation of informal sector business associations (ISAs) in the seven district centres of the province. The ISAs purchase raw materials wholesale, offering good prices for cash to their members and to other businesses. This generates profits which gives the ISAs financial sustainability, the money to expand their range of materials, and to venture into other activities to promote their members’ interests. ISTARN has supported these trading activities by providing loans to buy opening stocks.

ISA wholesaling operations have been very profitable to date, particularly in the areas of timber and steel. The reasons for this include location in the heart of the informal business areas, the existence of previous near-monopolies which gave rise to high prices, and the low cost of ISA operations. ISA wholesale operations have made a major contribution to increasing profitability of those businesses which they supply, and have also increased the level of understanding of the business environment amongst members.

The ISA in the most densely populated district is now finding it difficult to make profits from wholesaling. This is a sign of the overall success of the wholesaling intervention. Having broken the previous monopoly by white-owned suppliers, ISAs have stimulated copycat businesses to such good effect that they are being pushed very hard themselves. A market inefficiency has thus been thoroughly eradicated by a self-sustaining development intervention.

An area of ISA success is support of members to get serviced stands from local authorities. One ISA has been pro-active in establishing a fund from trading profits, to lend on a short term basis to members who need a certain bank balance before they are allocated a stand by the district council. ISAs also make a contribution towards the tool "hire-to-buy" scheme mentioned in Section 2 above, a facility which is available to all ISA members. When a member has 20% of the price of a tool they wish to purchase, ISTARN contributes 40% and the ISA matches this, and the member repays over one year.

There is a marked tendency by ISAs to concentrate on making profits from wholesaling rather than providing services such as advocacy and lobbying. This has resulted in a narrower focus in practice than was envisaged in the original concept of such associations.

A related problem has been the way in which some ISA committees have restricted access to benefits, or used the financial success of the associations to benefit themselves in various ways.

Another persistent criticism has been the male bias of ISA committees. Women entrepreneurs involved in hairdressing and clothes-making have found it difficult to influence the stock-buying policies of their local ISA, but have not yet organised themselves separately as a response. There is a clear case for the development of gender-based and/or sub-sector-based associations in future, rather than the current structures which combine district, sectors, genders, and wholesaling in one all-purpose organisation. But there needs to be a push for this from the unrepresented businesses owners.

Financial sustainability of the ISAs has been achieved in most cases, although performance of wholesaling operations varies from district to district. The ISA establishment loans were at no interest, which was probably an unnecessary subsidy.

The next step is to turn existing ISA wholesaling operations into private shareholder companies, so that restrictive or corrupt behaviour of committees is converted into activities for shareholder benefit.

A threat to organisational sustainability is the culture of power and patronage which permeates representative structures in ISAs. ISA responsiveness to the demands of members is very dependent on the quality of leaders, which usually means founders. Wider relevance of the ISA model will be dependent on the success of ISA democratisation and member mobilisation, a process which is beginning to be undertaken.

Developing a representative organisation is more complex and takes longer than starting a wholesaling business. In developing future associations of informal business people, the process of building democratic values and practices will be a primary focus.

To address this market constraint, a recent ISTARN initiative is a programme to experiment with setting up intermediary marketing operations in specific sub-sectors, to sell informal sector products into the much larger market offered by formal sector customers. The purpose is to find ways to break the bottleneck which has built up in the districts, where there are too many entry-level businesses fighting each other over tiny markets. The potential is to begin to break the artificial barrier between the informal and formal sectors, to increase and speed up the flow of money throughout the economy, to create pre-conditions and opportunities for the development of a more dynamic local economy, and to create more employment in the process.

The assumption behind this programme is that informal sector businesses are unlikely to start trading with the formal sector spontaneously, or vice-versa. There are numerous barriers. Almost 20 years after independence, cultural barriers, including that of language, remain high between the different strata of Zimbabwean society. There are problems of lack of knowledge, understanding and trust of one sector by the other. Informal businesses lack capacity to undertake large orders, they lack management expertise, product consistency and quality control, capital, credit, production equipment and premises, and secure storage of finished goods. Other difficulties include formal-sector payment delays, the high cost of borrowing, and the difficulty of communication and problem-solving between a large corporate customer and numbers of small producers. The existence of closed networks based on personal relationships within the formal economy also militates against informal inter-trading with the formal sector.

In order for any inter-sector venture to have a chance of working, an intermediary function is believed necessary. But what kind of intermediary function? What kind of structure, staff, responsibilities, stakeholder involvement? Which sectors, which products, which businesses? These are questions ISTARN has set itself to answer, by a process of action research.

The activities of a marketing intermediary operation need to include the following:

Sector-based marketing intermediaries give commercial customers a professionally managed, legally established business to contract with. The advantages of this include: increased opportunities for just-in-time stock management, reducing the need for customer working capital; competitive prices due to low overheads in the informal sector; and political goodwill as a result of buying products from local indigenous businesses.

The major advantage for producers is a steady flow of work which will allow them to invest for growth, and gradually expand production, creating more employment in the process. In the longer term, informal businesses are expected to improve their management and production practices and gain the skills necessary to compete in the formal sector on their own account.

In 1997 ISTARN identified an opportunity for a marketing intermediary. Zimbabwe’s national telephone parastatal had given a contract to a Danish telecommunications company to install fibre-optic phone lines throughout Zimbabwe. The programme started in Masvingo, and ISTARN made contact with the local manager. He expressed interest in sourcing a range of simple metal components for cable manholes from informal manufacturers. Mrs Makonese, a local businesswoman with connections to ISTARN, agreed to act as the intermediary between the construction contractor and a team of informal manufacturers. A trainer at Masvingo Technical College carried out detailed product costings and trained a number of informal business people in producing the components. The contractor accepted a tender for a small pilot contract. Three informal manufacturers agreed to split the first contract between them. Mrs Makonese’s company, MT Marketing, made credit available for materials and transport to the producers, and carried out liaison, material-sourcing, troubleshooting and product assembly functions. The first contract was successfully completed in June 1998, and the sub-contractor awarded a second contract for 10 times the value of the first.

Several of the notional roles of the marketing intermediary were here carried out by ISTARN. Preliminary research, making contact with the customer, costing, tendering, product training, all were carried out by ISTARN, so this was not yet an example of a full-scale marketing intermediary in action.

Problems with the pilot contract centred around pricing, and the profit structure of the (unwritten) contract between MT Marketing and the informal producers. The researched costs, and thus the tender, were too low, and various inefficiencies, particularly transport of raw materials, pushed up production costs. Access to equipment was a problem. Expensive mistakes were made when a critical drilling operation was delegated to metalwork students at the Technical College.

MT Marketing took a fixed percentage of the contract value while the manufacturers got whatever was left after all costs and the marketing percentage had been deducted. The risk of contract compliance was taken by MT Marketing, but the risks of mistakes in the costings and of unforeseen costs was taken by the producers. In the event this meant that the producers made much less profit from the pilot contract than they had been led to expect. MT Marketing also charged a comparatively high rate of interest on the credit it advanced to the producers.

These are characteristic behaviours of middlemen, (a more traditional term for marketing intermediaries). They carry out an essential business function, but their powerful position in the marketing chain enables them to minimise risks and costs while maximising profits, usually at the expense of small producers. Despite this, the producers here entered a second contract willingly, on the basis that the first contract had suffered teething problems. It is certainly the case that the producers will quickly gain experience through this process, and will not be satisfied with an obviously unfair allocation of profits in the longer term.

The second contract encountered a more major problem: the contractor went into liquidation, and the work was never paid for. This is a fairly common occurrence in the construction industry worldwide, and Zimbabwe is no different. Even this setback has not put the businesses involved off, and they are planning further tenders, in association with Mrs Makonese.

To lower the risk of exploitation of producers, it is important that several competing private intermediaries are facilitated and encouraged.

Encouraging and facilitating a private company or individual to get into the marketing intermediary business is practically simple. A conceptual problem is that of replication. How does the promoting agency find suitable candidates for this role? What would constitute a transparent process for recruiting and supporting entrepreneurs in taking advantage of these opportunities? It is fairly easy to address the standard criticism that such an activity is interfering with the mechanisms of the free market, since the free market as it currently operates is denying jobs and opportunities to very large numbers of people. The more difficult question is that of selection of the beneficiaries of such a programme. This aspect needs further work, since this is a very promising direction, combining existing entrepreneurial activity with commercial sustainability in a competitive environment.

Part of the idea of marketing intermediaries is to create mechanisms that allow small producers to make what the market wants, rather than trying to sell what the producer makes into an already overcrowded local market. With this in mind, an area under exploration is manufacture of workwear for the huge workforces on the commercial sugar estates of Masvingo’s lowveld. The thinking behind this initiative is that an area of major agro-industrial activity, with several very large companies engaged in a multi-million dollar industry, should provide opportunities for the local informal sector to show its competitive advantage of fast-response, low-overhead local production.

In practice this is proving more difficult than anticipated. Local informal clothes manufacturers do not have the sophisticated industrial machines, the premises, the production processes or the trained workforces to meet the high standards demanded by the customer. It may be possible to upgrade certain well-managed businesses with concentrated training and support, or it may prove uneconomic for informal businesses to carry out this kind of contract.

Manufacture for the formal sector means orders that demand delivery of quality and quantity on time. In order to qualify for such orders, informal producers need to have carried them out already. In order to learn how to carry them out, they need to undertake them. It is not easy to design interventions to assist in this iterative, self-reinforcing process.

Marketing intermediaries are a complex area for a development project, and work on them is still at an early stage. They are attractive because, where successful, they will have more impact on the economy than any previous intervention. They will create jobs and lift existing businesses out of the informal sector, making room for new entrants at local level, the strongest of which will have a route to grow beyond that level.

A principle with wider application is the importance of studying what is already there, and working with that. Proven examples of this are traditional apprentices and raw material wholesaling. Areas for investigation include self-organised associations, self-employed sales-people, private business trainers. An understanding of what has arisen spontaneously, and where the gaps are, can suggest small interventions which make a big difference.

It has also become clear that initiatives must respond to local conditions. What works in Masvingo town may not work in the lowveld. What works in clothing may not work in metal fabrication. The search for a universal model is counter-productive where it drains resources from developing many excellent specific initiatives and learning as much as possible from those.

Sustainability is both financial and institutional. It is increasingly important to develop market-led initiatives which are capable of cost recovery or profitable operation. Examples of initiatives which already have or can soon become self-supporting include commercial business training, business planning and finance-raising services, and private sector marketing intermediaries. Equally important is the development of cost-effective initiatives which can be taken over by existing institutions with few resources, such as the traditional apprentices scheme, which creates jobs by starting new businesses at minimal cost.

What ISTARN is attempting with the marketing intermediaries concept is a particularly difficult task. It flies in the face of all sorts of received wisdom, in terms of conventional thinking about business and also in terms of attitudes embedded in peoples’ cultures. Because of these difficulties and because of our inexperience there will be failures. But we need to persist with and build on these experiments, because we do not know enough about how to promote and support small enterprise development. We need to act like a good business ourselves, and take some calculated investment risks in order to learn more about our task.

In Zimbabwe the population is growing by at least 2.5% per year net. The formal economy is at best static in terms of employment. A recent study by Anglo American Corporation of the top 100 businesses in southern Africa predicts a net loss of formal sector jobs in the region over the years to 2010. This is disastrous news for the quarter-million people who come onto the job market in Zimbabwe every year.

Small businesses, including informal businesses, form the only sector of the economy with the dynamism and ability to create new jobs in large numbers, and make a significant contribution to the growth of economies, in Zimbabwe and elsewhere. This well-researched fact is agreed by development practitioners, business people and economists worldwide. The small enterprise sector holds out the only true hope for healthy economies, employment, and sustainable wealth generation.

Governments and aid agencies have been slow in translating this established consensus into any significant allocation of resources to develop strategies and instruments for encouraging and improving small businesses and their operating environment. Programmes for social welfare, health, food, environmental protection, education, housing, water and sanitation or transport, while necessary, do not create jobs or put money into people’s pockets in a sustainable way. Small businesses can. It is beneficial in every way to governments and societies if small enterprises thrive. Instead of being on the fringe, small enterprise development should be at the centre of government and aid policy, in the developing and the developed world. With the accelerating decline of government and big business as mass employers, small business is the only show in town.