Tanzanian youths being the majority in the country’s labor force, they are still challenged in issues around pursuing their destiny through decent economic activities & employment, access to quality education and their participation in decision making processes.
In pursuing your dream, you will be the biggest factor in your own success – your ability to identify an opportunity, execute an idea or deliver a service. In this section we will consider the all-important question: What are the qualities and personality traits that come together to make the successful entrepreneur?
Many studies have been conducted that delve into the personality of entrepreneurs. The results of these studies can help us begin to build the profile of the successful entrepreneur. For example: they were most likely the first born in their family; they held their first job before they were fifteen; and while they are college graduates, they were average students.
These kinds of studies of the entrepreneurial psyche may be interesting, but as you evaluate your entrepreneurial potential, you need to know more. After all, being the second born in your family, or being at the top of your class, does not preclude entrepreneurial success.
While many of the key characteristics and attitudes that make up the entrepreneurial "right stuff" can be acquired or learned, the importance of innate attributes such as physical health, energy and emotional stability cannot be overlooked. The life of the entrepreneur is a demanding one and there is little distinction between professional and personal life. That they are comfortable in this all-consuming role is critical to the success of the business and the satisfaction of the individual.
In this chapter we will look at what have been described as the key elements of the entrepreneurial "right stuff" the characteristics that are essential to the successful entrepreneur. It is important that you evaluate yourself as objectively as possible. There is no right or wrong answers and an honest evaluation will help you map your characteristics against those that define the successful entrepreneur.
Is It You? Ask yourself if you agree with the statements listed in the "Is It You?" section following each characteristic description. The more strongly you agree with the statements, the more closely your characteristics match those of the successful entrepreneur.
Determination, dedication, perseverance, commitment– many consider these to be the most important of all the characteristics of the entrepreneur. In fact, strength in these areas can make up for many other areas of "weakness".
Starting a new business is never easy and these characteristics are necessary tools for those who persevere through the difficulties of start-up – the practical implications of which can put anyone’s dedication and determination to the test.
Is It You?
"An entrepreneur must be prepared to spend long hours and be the last in line to collect dollars from a venture." Michael Mulhall
"There are lots of smart people in business, but the ones who succeed never give up. In business, perseverance is the key to success."Ron Connelly
Successful entrepreneurs combine natural optimism with a healthy dose of realism. They are very self aware and possess a keen sense of their own strengths and weaknesses. They are objective and can examine themselves and their ideas impartially. They know when they are beyond their capabilities and have no problem seeking help from experts. In pursuing opportunities, the entrepreneur is not fool- hardy or stubborn.
In fact, despite their dedication and determination, they will give up the pursuit of an opportunity more quickly than most if they perceive it will not deliver the promised benefits. This – combined with the fact that the entrepreneur possesses a keen understanding of their competitive environment and an intimate knowledge of their customers – means that entrepreneurs do not waste their efforts.
Is It You?
Studies have shown that many successful entrepreneurs have had businesses that have failed in the past. This statistic speaks to one of the key defining characteristics of a successful entrepreneur: the ability to bounce back and respond positively to challenges.
Entrepreneurs do not take failure personally. In fact, for them there is no such thing as an unmitigated failure– every experience is a lesson and every challenge an opportunity. They quickly come to terms with a defeat and learn from their mistakes in order to ensure that the same problems do not reoccur. They have the ability to pick themselves up, dust themselves off, and begin again – armed with new information that makes them stronger and better at what they do.
Entrepreneurs meet change head-on. When they meet with failure, they are able to objectively analyze the situation and identify what should have been done differently. In evaluating how things should be done differently, they are creative thinkers: unconcerned with rules, hierarchy or how things have been done in the past.
Entrepreneurs have an insatiable desire to know how they are performing. Quantitative evaluation is more important to them than qualitative; they want to see sales figures and profit margins. They seek out constructive criticism from those they respect. They are good listeners and quick learners.
Is It You?
"Trial and error are the ways of progress. A capacity to enjoy the trial and error adventure is a common characteristic of successful entrepreneurs."Grant Hooker
Entrepreneurship has no built-in status and no guaranteed perks or income level. Entrepreneurs therefore are not motivated by status or money, but instead they have a high need for achievement.
Their greatest satisfaction is derived from the excitement and challenge of creating and building a business. For this reason, they are never content with the status quo and are not comfortable resting on their laurels. They always feel that things could be done better, more efficiently, more effectively — and they are constantly solving problems and improving their practices.
Entrepreneurs have a strong success orientation but it is their own definition of success that is important and that definition is a constantly moving target. They are not content with just being better than others; they want to be better than their own best results. They are action-oriented and want to begin achieving results immediately.
Successful entrepreneurs need not only be self-motivated, but must also be able to motivate others. They are visionaries with a clear idea of what they want to achieve. Because, as we have seen, they have little time for hierarchy, entrepreneurs can exert influence without a formal structure. They are able to inspire people to work towards a solution; they are skilled in conflict resolution.
They understand that a substantial business cannot be achieved by one person. Because they have a strong understanding of their own strengths and weaknesses, entrepreneurs seek out those that complement their skills — and inspire those people to become part of the team. They are hero builders: happy to reward members of their team by sharing credit for success and giving them more responsibility. After all, it is not status that motivates the entrepreneur.
Is It You?
Entrepreneurs have tremendous confidence in their own abilities. They are optimistic and believe they can achieve anything. In fact, they believe that the impossible just takes a little longer to accomplish. They believe that they have been the most important factor in their own success and feel that luck (although welcome) has not been a major contributing factor.
During the course of their lives, entrepreneurs have not been heavily involved in team or group activities. They do not have a great need for affiliation. They can get along with many different personalities but do not need to have a lot of friends. Their belief in their own abilities means that they do not need to seek approval in making decisions and they are comfortable with the fact that it is “lonely at the top”.
Is It You?
As we know, there are no guarantees of success for entrepreneurs starting out.
In the same way that status and perks are not of great importance to them, they are not overly concerned with job security and retirement. They are tolerant of uncertainty and ambiguity.
There is a commonly held misconception that entrepreneurs are risk-seekers but this is not the case. Entrepreneurs are comfortable accepting moderate and calculated risk — and they deal with stress effectively. They are able to make decisions quickly under pressure but they exhibit the patience and exert the self-control necessary to maintain their vision.
Is It You?
"Entrepreneurship is responsible risk-taking... the leadership of responsible risk-taking." John Kelly
Integrity and reliability are the characteristics that are rated most highly among entrepreneurs as the quality that they most respect.
Trust is the single most important ingredient in building the strong business relationships that are key to success. Successful entrepreneurs are honest and forthright. They expect and reward the same from those they work with, both customer and suppliers.
Is It You?
While this section outlines what are commonly held as the key characteristics of a successful entrepreneur, weakness in some areas does not forestall success. As we outlined at the beginning of this section, many of the characteristics of the successful entrepreneur can be learned or acquired– and knowledge and understanding of your areas of weakness can help you improve.
"In business if you don’t dream of doing more, you’ll just end up doing more of the same." Jim Cummings
The tax structure is one importance aspects of the multifaceted concept of the quality of taxation. It deals with the design of tax policy to achieve desired policy objectives, while at the same time promoting economic growth, minimizing distortions and reducing the cost of tax collection. This insight focuses on he effects of taxation on Economic Growth.
The COVID-19 crisis has impacted the MSME sector with several challenges. Here are a set of ideas for MSMEs that can help accelerate the development of a robust sector that will boost economic development.
The success of the MSME sector is critical to achieving goal of emerging as an economic superpower. The sector is credited with large-scale employment generation and nurturing entrepreneurial spirit, helping it become an economically self-reliant nation. It continues to hold a lot of promise despite a challenging business environment.
The COVID-19 crisis has impacted the MSME sector with challenges such as stress on cash flow, new safety norms, and government regulations, increase in online business models coupled with an increase in cyber threat, restriction on travel and movement, and a slowdown in the local and the global economy, etc.
The following are a set of ideas for MSMEs that can help accelerate the development of a robust sector that will boost economic development.
Power of collective focus
As most MSMEs are small and fragmented, they do not enjoy the benefits that scale offers in areas such as marketing, sales operations, and new product development. A collective or a combined approach in these areas can be harnessed in many innovative ways, for example, by helping a town or village focus all its resources on manufacturing one particular product or type of product. This strategy helps leverage the collective might of these MSMEs.
As part of a cluster, MSMEs can benefit from economies of scale and enjoy easier access to capital from traditional lending channels. Most importantly, in a cluster, MSMEs mostly face the same/similar business challenges and can collectively devise a solution strategy that benefits all in the cluster. Clusters can spur healthy competition among businesses.
While MSMEs as a whole are highly varied in the type of products produced or nature of service rendered, at certain geographical locations, there are concentrations of common skill sets or types of industries. These can be clubbed into clusters with common characters.
Internet as equaliser
The rising internet penetration has tremendously contributed to the rapid growth of MSMEs, especially during the COVID-19 pandemic. By shifting their businesses online and adopting digital payment facilities, MSMEs were able to maximise customer convenience and create value for them.
An online presence also helps increase the discoverability of a small business by potential customers.
Online marketplaces and B2C platforms have enabled MSMEs to further expand to new markets and serve new customers by putting them at par with products offered by large multinational companies.
MSMEs can use digital marketing techniques like media promotions, social media marketing, content marketing, online client testimonials etc., which is a significant advancement to word-of-mouth marketing in the digital marketing era.
Building on niche
Building a niche is at the core of every successful business enterprise and MSMEs are no exception to this rule. A successful business enterprise has to first identify its niche either in terms of its product or service. A niche market involves serving a specific target audience to satisfy a specialised need.
Concentrating on niche market segments also helps MSMEs optimise their limited resources and focus on the limited management bandwidth available on the chosen market or niche product/service to help achieve better business results through specialisation.
By nature, MSMEs are well-equipped to service a niche set of customers as they are close to their customers and always have an ear to the ground. It would be great for MSMEs to think beyond the boardroom dilemma of ‘thinking big’ and having to satisfy a big mainstream audience's needs and choose to focus on building a niche instead.
Instead of competing with large companies, MSMEs can stand out by focusing on untapped opportunities rather than the mainstream areas of the market. That way, despite the stiff competition from other players, all of whom want the same piece of the pie, MSMEs can succeed with product/service differentiation.
Small can be powerful
While MSMEs may miss out on economies of scale, they can still use their size to their advantage. Successful MSMEs know that their size gives them the advantage of being nimble, agile, and increases their ability to adapt to changing landscape and respond faster to evolving customer needs.
Owing to their small size MSMEs have the biggest advantage of having the business owner being present at the core of the operations. Customers can interact directly with SME owners instead of intermediaries and share their feedback and complaints, which helps owners do a quick course correction and adapt policies as needed, more quickly.
As a result, the key stakeholders are more likely to trust the brand. In the absence of stringent procedures and policies, MSMEs are more flexible in their operations and aided by their agility and nimbleness; they can demonstrate innovativeness admirably.
Collaboration is key to growth
Encouraging the sharing of information, ideas, and research among MSMEs would go a long way in making them more dynamic and helping themselves integrate into global value chains. Collaboration among MSMEs is a real win-win for all parties involved as they can benefit from each other’s strengths and can identify and address their genuine on-ground problems and find innovative ways to grow together, a feat that might be difficult, if not impossible, when operating alone.
MSMEs should also be open to establishing strategic alliances with foreign players as well. Joint Ventures with foreign firms are a good way for MSMEs to expand their presence in the current era of rapid globalisation. Joint Venture with foreign players also helps MSMEs adopt new technologies and at the same time, take advantage of skilled workforce.
Successful collaboration helps companies complement each other’s strengths and tap into markets and opportunities beyond their reach when working individually. It can also create an ecosystem of healthy competition.
Strong DNA of innovation
One of the paths to success for a business, regardless of its size, is constant innovation. Developing new ideas is essential for any company to stay relevant, enhance its efficiency and processes, improve infrastructure, introduce new, improved, and more cost-effective products and services into the market, and increase profitability and establish a strong brand identity.
MSMEs may be small in size compared to MNCs, but they have a huge potential to introduce innovative, out-of-the-box ideas, successfully market them and scale up quickly.
Innovation plays a very critical role in making MSMEs more sustainable and prosperous. By adopting an innovation strategy, MSMEs can produce world-class products and services at lower costs and be more viable. The connection between innovation and demand is fundamental.
While all the innovations in the business world are directed towards fulfilling a certain need, small businesses have often come up with game-changing ideas that can transform the outlook of an entire industry besides fulfilling certain compelling needs.
MSMEs, especially micro businesses, can consult TICGL regularly for their professional advice and technical expertise in a multitude of core areas, making their ‘adviser, confidant, analyst, facilitator and educator to their clients’ A successful collaboration between MSME and Consultant-TICGLis the need of the hour to deliver value constantly for all stakeholders in the long run.
Tanzania has emerged as one of the fastest-growing economies in Africa in the early twenty-first century. Despite this rapid growth, however, structural transformation of the economy remains the country’s central challenge.
Doing business report aim is to help entrepreneur to have knowledge of and comply with applicable regulation.
Entrepreneurs may not be aware on what to be done or how to comply with regulation and may lose considerable time trying to find out.
Doing a Business
The results show that average of 167 of the respondents which equal to 49.5% respond that starting a business in Tanzania regarding it’s procedures, time,cost and paid in minimum capital to start as a limited liability company are FAIR, and average of 110 respondents which equal to 32.6% respond hat the environment are GOOD. This implies that regardless of having other setbacks but their is a chance of at least starting Doing a Business.
Dealing with Construction permitting
The results show that average of 190 of the respondents equal to 55% said procedures, time and cost to complete all formalization to build a warehouse and the quality control and safety mechanism in the construction permitting system is GOOD, while average of 80 of the respondents which gives 23.18% respond to FAIR, This implies that the environment of getting approved construction permit are good and provided fair.
Getting social services
The results show that average of 150 of the respondents which is equal to 43.98% respond that the easy getting social services eg. Electricity, water etc. to business is GOOD this including procedures, time and cost to get connected to the electricity but also the reliability of the electricity supply and the transparency of tariff , while average of 110 of the respondents which equal to 32.2% of the respondent says it is GOOD procedures.
Employing workers
The results show that the average of 180 of the respondents equal to 52.94% respond to EXCELLENT on flexibility in employment regulation and employ workers, while the average of 120 of the respondents equal to 35.29% respond that the situation of employing workers are GOOD.
Getting credit
The results show that average of 137 of the total respondents which is equal to 39.25% respond that getting credit (access to finance) both with movable collateral laws and credit information system are GOOD, While average of 90 respondents gives 25.7% respond to FAIR and average of 72 of the respondents for about 20.63% respond to BAD, this implies that despite that the general results show and respond to good but their is setbacks for a business to access credit from financial institution and this could be the way they demand to due to collateral issues and interest rates.
Protecting minority investors
The results show that average of 151 of the respondents which gives 44.25% respond minority shareholders right related to transaction and in corporate governance are FAIR while average of 90 of the respondents which equal to 26.52% respond GOOD and average of 70 responds gives 20.52% respond to BAD,this implies that despite of having fair respondents but also the results shows that there is a setbacks on protecting minority investors situation in Tanzania.
Paying taxes
The results show that the average of 179 of the respondents in 51.73% respond that payment, time and total tax and contribution rate for a firm to comply with all tax regulation as well as post filling procedures are BAD, this implies that Doing business in Tanzania one of the setbacks are paying taxes, while 120 of the respondents gives 34.6% respond to paying tax system is FAIR.
Trading across borders
The results show that average of 180 of the respondent which gives 52.17% responds to that time and cos to export the products of the comparative advantage and to import is FAIR while average of 90 of the respondent equal to 26.08% respondent that the situation of trade across borders are BAD, this implies that their is setbacks on Doing business in Tanzania across borders and need to be addressed.
Registering property
The results show that average of 170 of the respondents which gives a 48.9% respond that registering property such as procedure, time and cost of registering property business are GOOD, but this also including cost of transfer property and the quality of the land administration system while average of 120 of the respondents which equal to 34.58% respond to procedure , cost and time is FAIR.
Enforcing contracts
The results show that the average of 150 respondents which gives 54.7% responds to measure time and cost for resolving commercial dispute through a local first instance court and the quality of judicial processes respond to FAIR, while average of 120 respondents gives to 43.79% respond to GOOD on time and cost to resolve a commercial and the quality of judicial processes.
Resolving insolvency
The results show that average of 150 of the respondents equal to 63.8% respond to FAIR on time, cost, outcome and recovery rate for a commercial insolvency , while the strength of the legal framework for insolvency, while average of 65 of the respondents equal to 27.6% respond to GOOD on insolvency financial distress in which business is unable to pay the bills.
Understanding economic growth, And why is it so important?
This article presents the data and research to make progress against the world’s largest problems.
This post draws on data and research discussed in our entries on Income Inequality, Global Extreme Poverty and Economic Growth.
Good health, a place to live, access to education, nutrition, social connections, respect, peace, human rights, a healthy environment, happiness. These are just some of the many aspects we care about in our lives.
At the heart of many of these aspects that we care about are needs for which we require particular goods and services: think of those that are needed for the goals on that list above – the health services from nurses and doctors, the home you live in, or the teachers that provide education.
Poverty, prosperity, and growth are often measured in monetary terms, most commonly as people’s income. But while monetary measures have some important advantages, they have the big disadvantage that they are abstract. In the worst case monetary measures – like GDP per capita – are so abstract that we forget what they are actually about: people’s access to goods and services.
The point of this text is to show why economic growth is important and how the abstract monetary measures tell us about the reality of people’s material living conditions around the world and throughout history:
• In the first part I want to explain what economic growth is and why it is so difficult to measure.
• In the second part I will discuss the advantages and disadvantages of several measures of growth and you will find the latest data on several of these measures so that we can see what they tell us about how people’s material living conditions have changed.
What are these goods and services that I’m talking about?
Have a look around yourself right now. Many of the things you see are products that were produced by someone so that you can use them: the trousers you are wearing, the device you are reading this on, the electricity that powers it, the furniture around you, the toilet that is nearby, the sewage system it is connected to, the bus or car or bicycle you took to get where you are, the food you had this morning, the medications you will receive when you get sick, every window in your home, every shirt in your wardrobe, and every book on your shelf.
At some point in the past many of these products were not available. The majority did not have access to the most basic goods and services they needed. A recent study on the history of global poverty estimates that just two centuries ago roughly three-quarters of the world “could not afford a tiny space to live, food that would not induce malnutrition, and some minimum heating capacity.”
A few centuries ago the only way to produce a book was for a scribe to copy it word-for-word, by hand. Book production was a slow process; it took a scribe about eight months of daily work to produce a single copy of the Bible.It was so laborious that only very few books were produced. The chart shows the estimates of historians.
But then in the 15th century the goldsmith Johannes Gutenberg combined the idea of movable letters with the mechanism that he knew from the wine presses in his hometown. He developed the printing press. Gutenberg developed a new production technology and it changed things dramatically. Instead of spending months to produce one book, a worker was now able to produce several books a day.
As the printing press spread across Europe, book production soared. Books, which were previously only available to a tiny elite, became available to more and more people.
This is one example of how growth is possible and what economic growth is: an increase in the production of goods and services that people produce for each other.
Before we get to a more detailed definition of economic growth, it’s helpful to remind ourselves of the astonishingly wide range of goods and services that people produce. I think this is helpful because measures of economic output can easily become abstract. This abstraction means we easily lose the mental connection to the goods and services such measures actually talk about.
This list of goods and services isn’t meant as a definitive list, but it helped me to think about the relevance of poverty and growth:
At home: Light in your home at night; the sewage system; a shower; vacuum cleaner; fridge; heating; air conditioning; electricity; windows; a toilet – even a flush toilet; soap; a balcony or a garden; running water; warm water; cutlery and dishes; a hut – or even a warm apartment or house; an oven; sewing machine; a stove (that doesn’t poison you); carpet; toilet paper; trash bags; music recordings or even online streaming of the world’s music and film; garbage collection; radio; television; a washing machine; furniture; telephone; a comfortable bed and a room for one’s own.
Food: The most fundamental need is to have enough food. For much of human history a large share of people suffered from hunger and millions still do.
But we also need to have a richer and varied diet to get all of the nutrients we need, unfortunately billions still suffer from micronutrient deficiency.
Also, think of clean drinking water; reliable markets and stores with a wide range of available goods; food that rarely poisons you (pasteurized milk, for example); spices; tea and coffee; kitchen utensils and practical ingredients (from a bag of flour to canned soups or a yogurt); chocolate and sweets; fresh fruit and vegetables; bread; take-away food or the possibility to go to a restaurant; ways to protect your food from spoiling (from the cold chain that delivers the goods to the cellophane to wrap it with); wine or beer; fertilizer (very important); and tractors to work the fields.
Knowledge: Education from primary up to university level; books; data that allows us to understand the world around us; newspapers; vocational training; kindergartens; and scientific knowledge to understand ourselves and the world around us.
Infrastructure: Public transportation with buses, subways, and trains; roads; paved roads; airplanes; bridges; financial services (including bank accounts, ATMs, and credit cards); cities; a network of competent workers that can help you to fix problems; postal services (that delivers fast); national parks; street cleaning; public swimming pools (even private pools); firefighters; parks; online shopping; weather forecasts; and a waste management system.
Tools and technologies: Pencils, ballpoint pens, and paper; lawnmowers; cars; car mechanics; bicycles; power tools like drills (even battery-powered ones); a watch; computers and laptops; smartphones (with GPS and a good camera); being able to stay in touch with distant friends or family members (or even visiting them); GPS; batteries; telephones and mobiles; video calls; WiFi; and the internet right here.
Social services: Caretakers for those who are disabled, sick, or elderly; protection from crime; non-profit organizations financed by the public, by donations or by philanthropies; insurances (against many different risks); and a legal system with judges and lawyers that implement the rule of law.
There are also a wide range of transfer payments, which in themselves are not services (they are transfers), but which become more affordable as a society becomes more prosperous: sick leave and disability benefits; unemployment benefits; and being able to help others with a regular donation of some of your income to an effective charity.
Life and free time: tents; travel and holidays; surfboards; skis; board games; hotels; playgrounds; children’s toys; courses to learn hobbies (from painting to musical instruments or courses on the environment around us); a football; pets; the cinema, theater or a music concert; clothes (even comfortable and good-looking ones that keep you warm and protect you from the rain); shoes (even shoes for different purposes); shoe repair; the contraceptive pill and the ability to choose if and when to have children; sports classes from rock climbing to pilates and yoga; cigarettes (not all goods that people produce for each other are good for them); a musical instrument; a camera; and parties to celebrate life.
Health and staying well: Dentists; antibiotics; surgeries; anesthesia; mental health care from psychologists and psychiatrists; vaccines; public sewage; a haircut; a massage; midwives; ambulances; modern medicine; band-aids; pharmaceutical drugs; sanitary pads; toothbrushes; dental floss (some do floss); disinfectants; glasses; sunglasses; contact lenses; hearing aids; and hospitals – including very well-equipped, modern hospitals that offer
CT scans, which include intensive care units and allow heart or brain surgery or organ transplants.
Specific needs and wishes: Most of the products listed above are generally helpful to people. But often the goods and services that are most important to one individual are very specific.
As I’m writing this I have a big cast on my left leg after I broke it. These days I depend on products that I had no use for just three weeks ago. To move around I need two long crutches and to prevent thrombosis I need to inject a blood thinner every day. After I broke my leg I needed the service of nurses and doctors. They had to rely on a range of medical equipment such as X-ray machines. To get back on my feet I might need the service of physiotherapists.
We all have very specific needs or wishes for particular goods and services. Some needs arise from bad luck, like an injury. Others are due to a new phase in life – think of the specific goods and services you need when you have a baby or when you take care of an elderly person. And yet others are due to specific interests – think of the needs of a fisherman, or a pianist, or a painter.
All of these goods and services do not just magically appear. They need to be produced. At some point in the past, the production of most of them was zero, and even the most essential ones were extremely scarce. So if you want to know economic growth means for your life look at that list above.
What is economic growth?
So, how can we define what economic growth is?
A definition that can be found in so many publications that I don’t know which one to quote is that economic growth is “an increase in the amount of goods and services produced per head of the population over a period of time.”
The definition in the Oxford Dictionary is almost identical: “Economic growth is the increase in the production of goods and services per head of population over a stated period of time”. And the definition in the Cambridge Dictionary is similar. It defines growth as “an increase in the economy of a country or an area, especially of the value of goods and services the country or area produces.”
In the following footnote you find more definitions. Bringing these definitions together, and taking into account the economic literature more broadly, I suggest the following definition:
Economic growth describes an increase in the quantity and quality of the economic goods and services that a society produces.
I prefer a definition that is slightly longer than most others. If you want a shorter definition you can speak of ‘products’ rather than ‘goods and services’ and you can speak of ‘value’ rather than mentioning both the quantity and quality aspects separately.
What are economic goods and services?
Many definitions of economic growth simply speak of the production of ‘goods and services’ collectively. This bypasses a key difficulty in its definition and measurement. Economic growth is not concerned with all goods and services, but with a subset of them: economic goods and services.
In everything we do – even in our most mundane activities – we continuously ‘produce’ goods and services in some form. Early in the morning, once we’ve brushed our teeth and made ourselves toast, we have already produced one service and one good. Should we count the tooth-brushing and the toast-making towards the economic production of the country we live in? The question of where to draw the line isn’t easy to answer. But we have to draw the line somewhere. If we don’t, we end up with a concept of production that is so broad that it becomes meaningless; we’d produce a service with every breath we take and every time we scratch our nose.
The line that we have to draw to define the economic goods and services is called the ‘production boundary’. The sketch illustrates the idea. The production boundary defines those goods and services that we consider when we speak about economic growth.
For a huge number of goods or services there is no question that they are of the ‘economic’ type. But for some of them it can be complicated to decide on which side of the production boundary they fall. One example is the question of whether the production of illegal goods should be included. Another is whether production within a household should be included – should we consider it as economic production if we grow tomatoes in our backyard and make soup from them? Different authors and different measurement frameworks have given different answers to these questions.
There are some characteristics that are helpful in deciding on which side of the boundary a particular product falls. Economic goods and services are those that can be produced and that are scarce in relation to the demand for them. They stand in contrast to free goods, like sunlight, which are abundant, or those many important aspects in our lives that cannot be produced, like friendships. Our everyday language has this right: we don’t refer to the sun or our friendships as a good or service that we ‘produce’.
An economic good or service is provided by people to each other as a solution to a problem they are faced with and this means that they are considered useful by the person who demands it.
And a last characteristic that is helpful in deciding whether you are looking at an economic product is ‘delegability’. An activity is considered to be production in an economic sense if it can be delegated to someone else. This would include many of the goods and services on that long list we considered earlier, but would exclude your breathing, for example.
Because economic goods are scarce in relation to the demand for them, human effort is required to produce them. A shorter way of defining growth is therefore to say that it is an increase in the production of those products that people produce for each other.
The majority of goods and services on that long list above are uncontroversially of the economic type – everything from the light bulbs and furniture in your home to the roads and bridges that connect it with the rest of the world. They are scarce in relation to the demand for them and have to be produced by someone, their production is delegable, and they are considered useful by those who want them.
It’s worth recognizing that many of the difficulties in defining the production boundary arise from the effort to make measures of economic production as comparable as possible.
To give just one concrete example of the type of considerations that make the discussion about specific definitions so difficult, let’s look at how the production boundary is drawn in the housing sector.
Imagine two countries that are identical except for one aspect, home ownership. In Country A everyone rents their homes and the total sum of annual rents amounts to Tsh 2 billion per year. In Country B everyone owns their own home and no one pays rent. To provide housing is certainly an economic service, but if we only counted monetary transactions then we would get the false impression that the value of goods and services in Country A is Tsh 2 billion higher than in Country B. To avoid such misjudgment, the production boundary includes the housing services that are provided without any monetary transactions. In National Accounts, statisticians take into account the “imputed rental value of owner-occupied housing” – those households who own their home get assigned an imputed rental value. In the imagined scenario, these imputed rents would amount to Tsh 2 billion in Country B so that the prosperity of people in these two countries would be judged to be identical.
It is the case more broadly that National Account figures (like GDP) do include important non-market goods and services that are not included in household survey measures of people’s income. GDP does not only include the housing services by owner-occupied housing, but also the provision of most goods and services that are provided by the government or nonprofit institutions.
How can we measure economic growth?
Many discussions about economic growth are extraordinarily confused. People often talk past one another. I believe the reason for this is that the discussion of what economic growth is, gets muddled up with how it is measured.
While it is straightforward enough to define what growth is, measuring growth is very, very difficult.
In the worst cases measures of growth are mixed up with a definition of growth. Growth is often measured as an increase in income or inflation-adjusted GDP per capita. But these measures are not the definition of it – just like life expectancy is a measure of population health, but is certainly not the definition of population health.
To see how difficult it is to measure growth, take a moment to think about how you would measure it. How would you determine whether the quantity and quality of all economic goods and services produced by a society increased or decreased over time?
Finding a measure means that you have to find a way to express a huge amount of relevant information in a single metric. As the sketch shows, you have to first measure the quantity and quality of all the many, many goods and services that get produced and then find a way to aggregate all of these measurements into one summarizing metric. No matter what measure you propose for such a difficult task, there will always be problems and shortcomings of any proposal you might make.
In the following section I will show four possible ways of measuring growth and present some data for each of them to see how they can inform us about the history of material living conditions.
Measuring economic growth by tracking access to particular goods and services
One possible way to measure growth is to make a list of some specific products that people want and to see what share of the population has access to them.
We do this very often at Our World in Data. All of these statistics measure some particular aspect of economic growth.
The advantage of measuring growth in this way is that it is concrete. It makes clear what exactly is growing, and it’s clear which particular goods and services people gain access to.
The downside is that it only captures a small part of economic growth. There are many other goods and services that people want in addition to water, electricity, sanitation and cooking technology.
You could of course expand this approach of measuring growth to many more goods and services, but this is usually not done for both practical and ethical considerations.
One practical reason is that a list of all the products that people value would be extremely long. Keeping lists that track people’s access to all products would be a daunting task: hundreds of different toothbrushes, thousands of different dentists, hundreds of thousands of different dishes in different restaurants, and many millions of different books. If you wanted to measure growth across all goods and services in this way you’d soon employ half the country in the statistical office.
In practice any attempt to measure growth as access to particular products therefore means that you look only at a relatively small number of very particular goods and services that statisticians or economists are interested in. This is problematic for ethical reasons. It should not be up to the statisticians or economists to determine which few products should be considered valuable.
You might have realized this problem already when you read my list at the beginning of this text. You might have disagreed with the things that I put on that list and thought that some other goods and services are missing. This is why it is important to track incomes and not just the access to particular goods: measuring people’s income is a way of measuring the options that they have, rather than the choices that they make. It respects people’s judgment to decide for themselves what they find most important for their lives.
Measuring economic growth by tracking the ratio between people’s income and the prices of particular goods and services
To measure the options that a person’s income represents we have to compare their income with the prices of the goods and services that they want. We have to look at the ratio between income and prices.
Before the invention of the printing press in the 15th century the price was often as high as several months of work. The fact that books were unaffordable for almost everyone should not be surprising. It corresponds to what we’ve seen earlier, that it took a scribe several months to produce a single book.
This shows us how an innovation in technology raises productivity and how an increase in production makes it more affordable. How it increases the options that people have.
Global inequality: How do incomes compare in countries around the world?
In the previous section we measured growth as the ratio between income and the price for one particular good. But of course we could do the same for all the many goods and services that people want. This ratio – the ratio between the nominal income that people receive and the prices that people have to pay for the goods and services – is called ‘real income’.
Real income = Nominal income / price of goods and services
Real income grows when people’s nominal income increases or when the prices of goods and services decrease.
In contrast to many of the other metrics on Our World in Data, a person’s real income does not matter for its own sake, but because it is a means to an end. A means to many ends in fact.
Economic growth – measured as an increase of people’s real income – means that the ratio between people’s income and the prices of what they can buy is increasing: goods and services become more affordable, people become less poor. It is because a person has more choices as their income grows that economists care so much about these monetary measures of prosperity.
The two most prominent measures of real income are GDP per capita and people’s incomes as determined through household surveys.
Before we get back to the question of economic growth, let’s see what these measures of real income tell us about the economic inequality in the world today.
Both measures show that global inequality is very large. In a rich country like Denmark an average person can purchase goods and services for $47.80 in a day, while the average Ethiopian can only afford goods and services that cost $2.80 per day.
Both measures of real incomes in this chart are measured in ‘international-dollars’, which means that they take into account the level of prices in each country (using purchasing power parity conversion factors). This price adjustment is done in such a way that one international-$ is equivalent to the purchasing power of one US-$ in the US. An income of int.-$2.80 in Ethiopia, for example, means that it allows you to purchase goods and services in Ethiopia that would cost US-$2.80 in the US. All dollar values in this text are given in international dollars, even though I often shorten it to just the $-sign.
If you are living in a rich country and you want to have a sense for what it means to live in a poor country – where incomes are 20-times lower – you can imagine that the prices for everything around you suddenly increase 20-fold. If all the things you buy suddenly get 20-times more expensive your real income is 20-times lower. A loaf of bread doesn’t cost $2 but $40, a pair of jeans costs $400, and an old car costs $40,000. If you ask yourself how these price increases would change your daily consumption and your day-to-day life, you can get a sense for what it means to live in a poor country.
The two shown measures of real income differ:
Income as a measure of economic prosperity is much more abstract than the metrics we looked at previously. The comparison of incomes of people around the world in this scatterplot measures options not choices. It shows us that the economic options for billions of people are very low. The majority of the world lives on very low incomes of less than $20, $10, or even $5 per day. In the next section we’ll see how poverty has changed over time.
How does the income of the poorest compare with GDP per capita?
GDP per capita vs Daily income of the poorest 10%
GDP per capita vs Daily average income
Global poverty and growth: How have incomes changed around the world?
Economic growth, as we said before, describes an increase in the production of the quantity and quality of the economic goods and services that a society produces. The total income in a society corresponds to the total sum of goods and services the society produces – everyone’s spending is someone else’s income. This means that the average income corresponds to the level of average production so that the average income in a society increases when the production of goods and services increases.
Average production = average income
In this final section let’s see how incomes have changed over time, first as documented in survey incomes and then via GDP per capita.
Measuring economic growth by tracking incomes as reported in household surveys
The data shows that global poverty has declined, no matter what poverty line you choose. It also shows that the majority of the world still lives on very low incomes. As we’ve seen we can describe the same reality from the production side: the global production of the goods and services that people want has increased, but there is still not enough production of even very basic products. Most people in the world do not have access to them.
GDP per capita is a broader measure of real income and in contrast to survey income, it also takes government expenditures into account. A lot of thinking has gone into the construction of this very prominent metric so that it is comparable not only over time, but also across countries. This makes it especially useful as a measure to understand the economic inequality in the world as we’ve seen above.
Another advantage of this measure is that historians have reconstructed estimates of GDP per capita that go back many centuries. This historical research is an extremely laborious task and researchers have dedicated many years of work to these reconstructions. The ‘Maddison Project’ brings together these long-run reconstructions from various researchers and thanks to these efforts we have a good understanding of how incomes have changed over time.
It is no accident that the shape of this chart is very similar to the chart on book production at the beginning of this text – very low and almost flat for many generations and then quickly rising. Both of these developments are driven by changes in production.
Average income corresponds to average production and societies around the world were able to produce very few goods and services in the past. There were no major exceptions to this reality. As we see in this chart, global inequality was much lower than today: the majority of people around the world were very poor.
To get a sense for what this means you can again take the approach we’ve used to understand the inequality in the world today. When incomes in today’s rich countries were 20-times lower it was as if all the prices around you today would suddenly increase 20-fold. But in addition to this you have to consider that all the goods and services that were developed since then disappear – no bicycle, no internet, no antibiotics. All that’s left for you are the goods and services of the 17th century, but all of them are 20-times more expensive than today. The majority of people around the world, including in today’s richest countries, lived in deep poverty.
Just as we’ve seen in the history of book production this changed once new production technologies were introduced. The printing press was an exceptionally early innovation in production technology; most innovations happened in the last 250 years. The starting point of this rise out of poverty is called the Industrial Revolution.
The printing press made it possible to produce more books. The many innovations that make up the Industrial Revolution made it possible to increase the production of many goods and services. Compare the effort that it takes for a farmer to reap corn with a scythe to the possibilities of a farmer with a tractor or a combined harvester; or think of the technologies that made overland travel faster – from walking on foot to traveling in a horse buggy to taking the train or car; or think of the effort it took to build those roads that the buggies once traveled on with the modern machinery that allows us to produce the corresponding public infrastructure today.
The production of a myriad of different goods and services followed trajectories very similar to the production of books – flat and low in the past and then steeply increasing. The rise of average income that we see in this chart is the result of the aggregation of all these many production increases.
In the past, before societies achieved economic growth, the only way for anyone to become richer was for someone else to become poorer; the economy was a zero-sum game. In a society that achieves economic growth this is no longer the case. When average incomes increase it becomes possible that people become richer without someone else becoming poorer.
This transition from a zero-sum to a positive-sum economy is the most important change in economic history (I wrote about it here), and made it possible for entire societies to leave the extreme poverty of the past behind.
In the top left panel you can see how global poverty has declined as incomes increased; in the other eight panels you see the same all world regions separately. The starting point of each trajectory shows the data for 1820 and tells us that two centuries ago the majority of people lived in extreme poverty, no matter where in the world they were at home.
Back then it was widely believed that widespread poverty was inevitable. But this turned out to be wrong. The trajectories show how incomes and poverty have changed in each world region. All regions achieved growth – the production and quality of goods and services that people need increased – and the share living in extreme poverty declined.
This historical research was done by Michail Moatsos and is based on the ‘cost of basic needs’-approach as suggested by Robert Allen (2017) and recommended by the late Tony Atkinson.21 The name ‘extreme poverty’ is appropriate as this measure is based on an extremely low poverty threshold. It takes us back to what I mentioned at the very beginning; this historical research tells us – as the author puts it – that three-quarters of the world “could not afford a tiny space to live, food that would not induce malnutrition, and some minimum heating capacity.”
Since then all world regions have made progress against extreme poverty – some much earlier than others –, but in particular in Sub-Saharan Africa the share living in deep poverty is still very high.
The last two centuries were the first time in human history that societies have achieved sustained economic growth and the decline of global poverty is one of the most important achievements in history. But it is still a very long way to go.
That the world has made substantial progress but nevertheless still has a long way to go is the case for many of the world’s very large problems. I’ve written before that all three statements are true at the same time: The world is much better, the world is awful, and the world can be much better. This is very much the case for global poverty. The world is much less poor than in the past, but it is still very poor and it remains one of the largest problems we face.
Some writers suggest we can end poverty by simply reducing global inequality. This is not the case. I’m very much in favour of reducing global inequality and I hope I do what I can to contribute to this. But it is important to be clear that a reduction of inequality alone would still mean that billions around the world would live in very poor material conditions. Those who don’t see the importance of growth are not aware of the extent of global poverty. The production of many crucial goods and services has to increase if we want to end it. How much economic growth is needed to achieve this? This is the question I answered in this recent text.
To solve the problems we face, it is not enough to increase overall production. We also need to make good decisions about which goods and services we want to produce more of and which ones we want less of. Growth doesn’t just have a rate, it also has a direction and the direction we choose matters – for our own happiness and for achieving a sustainable future.
I hope this text was helpful in making clear what economic growth is. That it is necessary to remind ourselves of that is a consequence of the fact that we mostly talk about poverty and growth in monetary terms. The monetary measures have the disadvantage that they are abstract, perhaps so abstract that we even forget what growth is actually about and why it is so important. The goods and services that we all need are not just there – they need to be produced – and economic growth means that the quality and quantity of these goods and services increases, from the food that we eat to the public infrastructure we rely on.
The history of economic growth is the history of how societies leave widespread poverty behind by finding ways to produce more of the goods and services that people need – all the very many goods and services that people produce for each other: look around you right now.
The main thrust of the women's development activities would be to assist women in the sustainable establishment of income generating activities to be undertaken in or near the home.
This could be also one of the main objectives of the self-help female groups formed with the support of the Project through its reinforcement of group promotion activities. IGAs tend to give women a higher status within the family and studies generally indicate that the greater the amount of income under women's control the greater amount devoted to their children's education, heath and nutrition. As previously mentioned generally incomes of women are used for the increase of the well being of the family. However it is essential to guarantee that women will have the control of the funds (saving funds loans etc) and the free disposal of them to implement IGAs. During the feasibility study project staff should be very careful on not raised expectations.
As we have previously focused on, the identification of income generating activities should come from a bottom up approach. An IGA should correspond to the needs of women, the failure of this kind of project generally comes from a gap between identifying women's needs and designing viable project. This means that it may be implemented after some steps have already been carried out with the Project's support like: PRA with women to identify problems, elaboration of a negotiated development programme, group promotion. All these activities should be carried out using participatory methods. In this context and according to the suggested strategy, it seems more appropriate to focus on planning, organizing and supporting IGAs than to give a list of activities. Furthermore the following reasons make that the suggestion of potential IGAs should be taken with caution and in any case should not be considered as an exhaustive list:
To the benefits for women, IGAs to be supported should be those traditionally undertaken by women, and located in or near the home. Potential IGAs should concern activities where women can use skills they already possess. Rural women have skills to do small-scale plant and agricultural and animal production, processing and preservation. Areas for potential promotion include home gardens (aromatic and medicinal plants and herbs vegetables), indoor plants, flowers, fruit tree nurseries, animal production dairy products, sewing, knitting embroidering, carpet making. Of course potentialities are various according, to the specific conditions of the village. Marketing must be careful!! considered before undertaking any of these rural enterprises since lack of marketing expertise is the major weakness of this kind of programme.
1) Food drying. processing and preservation
In many rural households women are seasonally involved with these activities. They preserve surplus production for household consumption and for marketing when the family needs more cash. However, the regular production of a standardized product for the market is still rare and a wide of local products which could be produced are absent. Most notable of these are:
The solar drying of fruit and vegetables is restricted to a few minor crops such as chilies, usually for household consumption. However vegetables such as tomatoes, eggplants can be dried, as well as many fruit, such as figs, grapes, apricots and peaches. The market for these is as yet poorly developed but the world market is expanding every year. There is also a large market for edible and medicinal herbs which remains poorly supplied from local sources.
Production of jams, pickles, vegetable pastes, fruit juices could all increase farm income and women's income in particular since this would generally make use of existing skills and technology.
Packaging is probably important in attracting consumers for local products when they must compete against imports. Producers need advice about moving dried and processed products from rural areas to larger outlets in towns. These activities could be implemented in some appropriate areas of the Project, especially those where fruit-tree plantations are widespread.
2) Preparation and marketing of dairy products
Small-scale milk processing enterprises could be established in villages where there is a surplus of milk. Some NGOs have already developed small credit projects in support of this. Milk processing is one area of traditional female responsibility and production of local cheese is done by women. The knowledge of production techniques is already widespread in several families. Sheepishly milk products are generally preferred but locally goat products maybe more popular. One of the main items that store well and is widely sold is jeemid (kind of dried yoghurt).
As with agricultural food processing, the main needs are to mobilize women to produce hygienic products of consistent quality and to match their output to local markets. A range of various products can be made: butter, ghee, cream, cheese, yoghurt, etc.
They may be some possibility of reprocessing locally made cheese and packaging and marketing it through urban food stores where traditional local cheeses are not now sold.
3) Agricultural production
Some agricultural production activities can be carried out in order to provide income such as: vegetables, aromatic and medicinal plants, flowers, indoor plants and fruit tree nurseries. The market for aromatic and medicinal plants seems to be important. Vegetables and medicinal plants should be linked with processing and packaging activities. Different groups of women could implement these activities according to their own interests and skills, one specialized in production, the other in processing and packaging.
Flowers and indoor plants production could interest villages located close to towns where there is a market for this kind of production. Fruit-tree nurseries could be established by women (Some areas this activity cannot be profitable as far as the prices of seedlings are highly subsidized), but the constraint is the necessity to obtain a licence. There is a market for high quality fruit-tree seedlings and a few women have competencies in this area.
Biological produce (fruit and market garden produce) could be an interesting' alternative where a market seems to exist later.
4) Establishment and improvement of livestock and poultry raising,
The first priority of many women (most of them belonging to the target group "low educational older women" is to establish or improve their animal production by buying cows or small ruminants or improved poultry (particularly laying hen). Several NGOs support this activity in providing credit facilities and technical assistance, especially for sheep and goats.
Of course this activity should be the object of caution especially for goat raising and considered according to the fodder disponibilities and grazing land availability. However we emphasize that it is one of the most fitted to a category of women. Many, of them want to buy, only one cow or a few small ruminants, especially in remote villages. The implementation of livestock raising should be linked with improved forage production for efficient production of milk and meat. Furthermore it can allow at the same time fodder shrubs plantation in rangelands, what consequently should imply more involvement of women, in natural resources management. One of the principal constraints is the animal health problem which can happen. Improved animals like goats are generally more fragile and need more care. In that case poultry, which needs less investment, is less risky.
5) Other activities relevant to agricultural and animal production
We gather in this heading potential activities which were not mentioned by women either they do not know them or the participants did not seem interested (what does not mean that no woman were interested).
6) Handicrafts
Support to develop handicrafts at village level is the priority request of young women in all visited areas of concern carpet manufacturing, knitting and sewing. These activities are traditional and integrated in the cultural context. Knitting and sewing development is firstly wanted to satisfy the household consumption. Consequently, these activities are within competencies of social services (welfare societies, women's union, etc.). However the Project could support the setting up of micro and small-scale enterprises. There is a gap between domestic handicrafts and those aiming at marketing, which needs business skills and of course entrepreneurship development will not be appropriate for all women. This aspect should be emphasized by the Project in order to avoid the frustration of women who imagine that handicrafts are IGAs which are the easiest to cam out.
In development of small carpet units at village level could be a viable strategy and would allow women to share their time between economically productive activities and domestic responsibilities. Specific looms, smaller than those used in development centres. could be provided. Studies should be carried out to know the potentialities of marketing: contracts with public or private sector, direct sales to consumers? etc. It is recommended to develop this activity at self-help groups level, the final objective being to establish a sustainable women's group which would be able to manage and run itself its own small enterprise. The same strategy might be carried out for sewing and knitting.
7) Shopkeeper activities
One of the main problems expressed by women was the lack of basis medical services. The possibilities to train one or few women in this field could be explored in order to establish a small people's dispensary at village level or at least a village pharmacy with basic medicines. Investigation should be made to know the feasibility, of this activity and the possible legislation constraints in that area.
But also, the implementation creation of a bakery could be envisaged according to the supplying difficulties, linked to the setting up of improved ovens.
1) General characteristics of IGAs
The general tendency is for women to work in the home and produce goods for domestic consumption not for the market. However the aim of an IGA is to produce for the market and furthermore it can be called micro or small-scale enterprise, whether it is managed at individual or group level. One of the main criteria to choose an IGA should be its profitability.
If the Project is providing assistance to these small enterprises, the emphasis must be on orientating them from the social welfare perspective and towards the provision of business development services in order for this strategy to succeed, it is essential that a clear distinction be made between the social welfare assistance and a development strategy that focuses on tapping the economic potential of women producers. The difference between these both activities has important implications in teens of target audience and in teens of overall project design. With regards to welfare assistance, IGAs are generally targeted at a group of beneficiaries that has no prior involvement in the cash economy; IGAs offer women the opportunity to join the labour force and to learn necessary, skills for involvement in economic activities.
These activities, however, are designed with a reliance on outside grants built into the project. They are not designed to be self-sustaining business operations. On the contrary business development focuses on a certain level of profitability to ensure self-sustainability women involved in small business development generally should have knowledge of the prevailing economic environment and business conditions.
IGAs can be seen as the initiation phase in the progression to small business development. It is difficult to make the transition from being unemployed and lacking in skills to being self-employed and capable of managing a business operation. The first step is TO acquire specific technical skills. Once women have this experience the next step is to upgrade those skills and introduce women to basic business concepts and procedures.
The transition from a social welfare to a micro and small enterprise approach is reflected by a market-driven approach.
Not all women will have ability and potential to become entrepreneurs, and should be not forced to do so. However, those women who do show the interest and determination to make the move self-employment should have access to training programs that will provide upgrading from technical skills to business skills. The progression would follow this course: unskilled worker - skilled worker - experienced worker- entrepreneur
As before mentioned, IGAs should be in priority those traditionally undertaken by women and located in or close to the house in order to be as far as possible accepted in the cultural context. As any innovation, the implementation of IGAs is going to modify the traditional context, since it means the increase of the economic and consequently social role of the woman at the household level. It is obvious that a social change is a long process, generally, conditioned by economic imperatives. In a patriarchal structure of the family where men are decision makers in the household, there is no chance of success for the implementation of IGAs if the,' remain suspicious and not convinced of their interest for the family. Therefore it is essential during all steps of the IGA setting and especially from the beginning (identification and feasibility) to integrate males in the process.
Awareness should be made to inform them about the advantages for the family (increase in living standards, incomes and food security). Resources for women represent resources for food security (experience has shown that resources in the hands of women often have a greater nutritional benefit to children than the same resources controlled by men and they are more likely than men to spend a given income on food for the family...) Reducing gender disparities by enhancing the human and physical resources commanded by women leads to growth in household agricultural productivity, greater income and better food and nutrition security for all. Awareness with case studies in order to show the advantages of the IGA setting is essential to allay men's suspicions. At the beginning it is likely that only broad-minded men will accept the innovation, but good results should gradually decrease the resistance of the others and involve more and more households in the project. It is very important to proceed with caution and this is one of the main conditions for the success of the project.
The same method, based on the awareness and the demonstration of the advantages. should be implemented to raise the resistance of many women to group-based activities. Only economic advantages can be an incentive. Awareness should show that the best results at individual level can be obtained with group-based activities. It is obvious that a severe reglementation should be set up at the group level, by the members themselves. Coopting should be the rule for the participation in group-based activities. Anyway, during the interviews in the villages, some women (generally single higher educated women) have spontaneously expressed the wish to start group activities. The Project should begin the activities with the voluntaries because, as we have before mentioned, the success of the experience is the best method for extension.
2) Target groups and participation of beneficiaries
Two target groups can be identified according to the skills: women who have already technical skills and those who have no specific skills but seem extremely motivated, generally young women with a good level of education. In the first group there are for example a few women in a villages. In both cases the determination of women will be the main criterion to develop an IGA. Group promotion will be encouraged for the implementation of IGAs which are more efficient to be run by several women. This does not mean that the production process must entirely be at group level (in many cases, such as animal production, individual production is much more efficient) and only one stage of the process can be run at group level, such as marketing. It is almost certain that young high-educated women will be more inter-active, since a lot of them have the wish to develop group-activities, like craft and food processing.
Each IGA (individual or at group level) should be considered as a project and beneficiaries should take part in all stages of the project, from the identification to the implementation according to the bottom up approach above described. This is essential to reinforce the capacities and assure the self-reliance of the individuals or groups and in the same time allow the sustainability of the activity.
3) Main steps of the IGA setting
a) Identification
The participants should ask themselves how they can obtain income from an activity, and identify the factors contributing to the success of IGAs. At the same time they should ask themselves if they are already involved in the activity. They need to be aware of these factors and to gauge them own skills when they consider embarking on an activity. (Trainers or promotors should allow participants to express themselves freely and note all suggestions at this stage).
b) Technical feasibility
This involves finding out whether the women suggesting the activity have the required technical skills and, if not. whether they can acquire them rapidly. The necessity of a minimum of professionalism should be emphasized to allow a minimum profitability of the activity (good quality and competitive goods should be produced). Once the skills of each individual or group have been identified, other prerequisites for a technically feasible operation have to be established (for example water for home gardens, raw materials for handicrafts, feed for animal raising...) Management skills should not be forgotten since an IGA is an economic venture which needs specific skills in management.
c) Economic and financial profitability,
In addition to being technically feasible, the IGA should be profitable, that is to say they should produce income or a surplus (profit) and work without subsidies (sustainability). A profit-making activity should be profitable, in other words, returns should be higher than costs so as to produce a profit. Potential market should be identified and involved risks considered.
The feasibility study is essential and should be conducted before starting any IGA (the results will allow to find out whether a proposed activity is a good idea or not!. It is a simple exercise because at this stage it concern only a very small scale activity run at local level in some pilot villages (that is to say it is not necessary a feasibility study at national level for each IGA run at pilot level). But this does not mean anyway that the general socioeconomic context should be ignored. On the contrary the IGAs should be integrated in this context especially for some activities (such village carpet unit).
d) Planning
Once the activity has been carefully chosen all the operations should be identified and listed in logical and chronological order. These operations should be scheduled and a timetable should be drawn up. This means that all facilities and resources needed to carry out a given operation must be available in good time to avoid delay and ensure that the other operations begin on schedule. All tasks vocational training courses should be planned in details.
e) Plans for marketing
Products should be of good quality and competitive. Potential markets should be investigated.
f) Ways of financing
Since we are focusing, on profitable activities we should see the possibility of activities financed by the beneficiaries own funds and sources of potential forms of credit. Some project areas it will be difficult for most of women to support start-up costs by themselves according to the lack of savings. It is important that the real costs are supported by beneficiaries. Nevertheless an initial grant to cover start-up costs can help the establishment of the IGA in specific cases (high poverty for example) Grants and subsidies should carefully used because they distort the real costs and consequently the profitability of the IGA. In addition they can undermine the self-reliance of the beneficiaries.
Credit may be distributed in several ways and different sources may be explored. Some NGOs have developed original systems of credit as the following: funds provided at village level are used to provide loans for families and repaid loans guarantee the continuity of the project; savings-credit Project executed by Care allows groups of women to turn their savings into loans for themselves), Traditional banks give credit through normal channels providing the beneficiaries have guarantee. Some projects give facilities which can be suitable for some women particularly women heads of households.
TICGL Project can help women to follow the procedures and apply for a credit and propose specific other ways of credit particularly where NGOs are not developed as the following:
The different kinds of loans (rotative revolving or group) could be made according to the specifities and the wishes of the different villages. The procedures advantages and drawbacks of the different kinds should be clarified. It is difficult at this stage to recommend one. Even in some of the projects relevant on the field of credit for IGAs have been recently implemented and are at an experimental stage. However the first results seem to show the effectiveness of the revolving loans. It is recommended to encourage savings although this is not popular. Indeed savings promoting should be made because they reduce the dependency of outsiders and increase the self-reliance of individuals and groups. Savings are the source of credit and consequently represent the heart of development.
4) Group promotion
Emphasis should be made on IGA as a process to enhance capacities of women and to promote and train sustainable self-help groups. As women may not be treated as passive recipients of assistance it is essential 20 build up their confidence in their own abilities and promoting their self reliance.
To promote groups we can propose the following steps:
The Project will play the role of intermediary between the women's groups and the private or public organizations (and persons! who should be involved in the process. especially for training and financing and partnership agreements will be discussed in details. As we already said the Project has not enough resources to support all activities prerequisites to the launching of the IGA but should identify the resource institutions and persons in order to mobilize the existing competencies.
1) Beneficiaries
Different types of awareness and training can be carried out according to the level of competencies of the potential beneficiaries:
2) Staff in charge of this component
a) Staff needs
Until now there are no gender competencies in the Project level to implement the IGAs in the field. That is the main reason the Project should establish relations with other partners in order to maximize use of resources. Nevertheless minimal female staff are necessary for the monitoring and follow up of the activity at different levels, as following:
In both Regions links should be developed with the representatives of Women's Unions (at local, district and governorate level) who should be involved in group promotion and implementation of IGAs.
b) Training and capacity building needs
The training programs for the staff should be carried out in priority, particularly the ones concerning the female promotor at village level since minimal skills are essential to initiate the activity at grass roots level. The programs should include the following matters:
Different training modules should be organized for both target groups village promotors and gender persons (extensionists at field unit, district and/or governorate who belong to the Ministry of Agriculture as well as responsibles of Women's Unions concerned by the gender activities in the areas covered by the Project). For village promotors the program should emphasize: participatory techniques, group promotion, local and community development, general information on IGAs and the different stages of IGA. For gender persons it should focus on participatory techniques (particularly, PRA, socio-economic surveys, entrepreneurial management and IGAs.
Priority should be given to identification of institutions and resources persons in the fields needed to provide training as the following (not exhaustive list):
International experts who implement the Local Community Development project could be resource persons for local community approach as well as participatory techniques.
The regional nature of the Project is a good opportunity for transfer of competencies. Since there are more institutions engaged in women's activities as well in using participatory approach, they could be engaged to provide technical support. Study tours could also be organized in projects involved in group promotion and IGAs.
International consultants should be used only if there are no national resources. Nevertheless international consultancy should be appropriate to develop training models and organize a seminary on participatory approach and methods.
3) Extension material
Some guides could be developed by the Project, such as the following:
#IncomeGeneratingActivities
©️Amran Issa Bhuzohera
Local Economic Development offers local government, the private and not for profit sectors, and local communities the opportunity to work together to improve the local economy. It focuses on enhancing competitiveness, increasing sustainable growth and ensuring that growth is inclusive. Local Economic Development encompasses a range of disciplines including physical planning, economics, and marketing. It also incorporates many local government and private sector functions including environmental planning, business development, infrastructure provision, real estate and development.
In order for Local Economic Development to be effective, we need to identify and consider the community’s economic strengths, weaknesses, opportunities and threats, and agree a shared strategy. Local Economic Development strategic planning offers communities the opportunity to work together to improve the local economy and enhance competitiveness, thereby encouraging sustainable and inclusive growth. The training focused on the improvement of local staff capacity on how to analyze the opportunities on improving local economic in their respective cities/regencies.
The purpose of local economic development (Local Economic Development) is to build up the economic capacity of a local area to improve its economic future and the quality of life for all. It is a process by which public, business and non governmental sector partners work collectively to create better conditions for economic growth and employment generation.
While “economic development” is often confused with economic growth or industrial development, it is generally accepted to be a proactive collaborative process within which there are a multiplicity of efforts that collectively serve to improve economic progress and quality of life as such, economic development can and often does involve a number of stakeholders, government, nonUgovernment, community and private sector organizations, focused on a variety of outcomes such as new business startUups, greater sectoral diversification, job creation, increased productivity, sustainable growth, improved quality of life and so forth.
Local Economic Development refers to the process in which the local government, or some agency, authority or organization on behalf of the local government, engages to enhance a community’s capacity to effect economic progress in both a quantitative and qualitative manner.
The success of a community today depends upon its ability to adapt to the dynamic local, national and international market economy. Strategically planned Local Economic Development is increasingly used by communities to strengthen the local economic capacity of an area, improve the investment climate, and increase the productivity and competitiveness of local businesses, entrepreneurs and workers. The ability of communities to improve the quality of life, create new economic opportunities depends upon them being able to understand the processes of Local Economic Development, and act strategically in the changing and increasingly competitive market economy.
Each community has a unique set of local conditions that either enhance or reduce the potential for local economic development, and it is these conditions that determine the relative advantage of an area in its ability to attract generate and retain investment. A community’s economic, social and physical attributes will guide the design of, and approach to, the implementation of a local economic development strategy. To build a strong local economy, good practice proves that each community should undertake a collaborative process to understand the nature and structure of the local economy, and conduct an analysis of the area’s strengths, weaknesses, opportunities and threats. This will serve to highlight the key issues and opportunities facing the local economy.
TICGL Mission Focus on the following:
1. To enhance inclusive Local Economic Development
2. To build green and sustainable business and local government capacity in promoting SME
3. Strengthening entrepreneurship
TICGL has the objectives:
1. To encourage good governance
2. To reduce the gender inequality gap in Local Economic Development
3. To facilitate municipal governments Small and Medium Enterprises (SMEs), and civil
society to build networks and partnerships
4. To create ecosystems for SMEs and inclusive Local Economic Development development
5. To facilitate and mentor the new and existing entrepreneurs to encourage Local Economic Development
6. To adapt informal rules and regulations to accommodate informal sector, minimizing its negatives while boosting its positive contributions
Local Economic Development Enabling Policies
Local economic development is arguably affected by all local government activities.
However, local economic development policy is usually more narrowly as special activities, undertaken by public or private groups, to promote economic development.
1. Providing customized assistance targeted at individual businesses that are thought to provide greater economic development benefits; and
2. Strategic initiatives in which more general tax, spending, and regulatory policies of government are changed to promote local economic development.
Even without these government efforts, local economic development will often occur.
However, local economic development programs are argued to increase the quantity or quality of local economic development.
Local economic development is increasingly regarded as a major local government reUsponsibility. Many believed that “bringing about economic development” is a major responsibility of local governments. The “First priority goal” for local economic development is “increasing jobs located in the city”, increasing the local tax base, and diversifying the local economy.
Key Elements in Local Economic Development
Various Local Economic Development Approaches
Good practice tells us that Local Economic Development should always be guided by a strategy. A Local Economic Development strategic planning process has Five stages:
Stage 1 :Organize the Effort
Stage 2 :Conduct a Local Economic Assessment
Stage 3 :Develop the Local Economic Development Strategy (includes vision, goals, objectives, and programs, projects and action plans)
Stage 4 :Implement the Local Economic Development Strategy
Stage 5 :Review the Local Economic Development Strategy
The strategy areas of economic opportunity and obstacles to overcome information that will guide the direction of the Local Economic Development initiative and potential interventions.
Summary of Key Messages
Local Economic Development is best achieved through a partnership of governmental authorities and agencies, private sector businesses, not for profit organizations, and citizen engagement; each partner has an important role to play. The most successful Local Economic Development organizations take a collaborative approach and supplement their activities through close relationships with other representative groups that can aid or even take on part of the Local Economic Development effort. Local Economic Development can be a heavy burden requiring immense dedication and commitment, substantive resources and unique expertise. Pursuing avenues in which that burden can be shared and where synergies can be achieved is critical.
Local Economic Development is a highly competitive and complex process. Success is not about waiting for some thing to happen; rather it is about going out and making things happen. To do this effectively requires significant dedication and commitment, a broad and diverse range of experience and expertise, and significant human and Financial resources. These characteristics are seldom in a single organization; therefore, broad community collaborations and partnerships are essential prerequisites to successful Local Economic Development.
Gender equality can drive economic growth and increase productivity. Transparency and accountability contribute significantly to the effectiveness of Local Economic Development efforts. When individual citizens and stakeholders know what is happening they are more likely to get involved and support the process.
The greater the community commitment to the process, the more effective the effort will be. Transparency requires inclusiveness, open communication and ready access by individual citizens to information on Local Economic Development efforts. With transparency, accountability is implied.
Improving access to post basic education has been a high priority for most of the government, which would also like to expand the higher education sector in order to widen access to higher education and meet need for highly trained personnel. Public resources are tight, however, and so Higher Education Institute have to try to meet expectations regarding research and innovationwith very limited budgets. Proper guidance and better regulations are needed to support their attempts to enhance the development of research and innovation.
The higher education system is expanding in size, but it remains small by regional standards.
There are also some serious concerns about its quality. While various policy dialogues between the government and its development partners have discussed the importance of research, but limited follow-up actions have been taken. Most public universities do not yet have sufficient capacity to provide doctoral programmes.This is not only due to a lack of human resources such as qualified supervisors and technical staff, and physical resources such as laboratories, but also to the lack of a research culture and weaknesses in management and leadership. Private universities have taken a lead in providing graduate degree programmes, but these programmes are rarely backed up by a strong institutional commitment to research.
Most of the students enrolled in graduate degree programmes are public servants and professionals in both development organisations and private businesses. The graduate studies programmes offered by universities in the fields of education, law, economics, business management and development studies are directed mainly at the needs of professionals upgrading their knowledge and skills for the purposes of professional effectiveness and eventual promotion. These programmes are constrained by the limited availability of advanced scholarly literature, and by the fact that materials available in other languages may not be relevant to the context.
Within public universities there are no visible incentives for research by lecturers and there is no link evident between research achievements and either promotion or pay rises. A new policy on academic promotions is pending approval by the Office of the Council of Ministers, but it is difficult at this stage to see how this policy could address the many gaps that exist in research capability.
The gaps come in many forms. First, there is a lack of strong political commitment, which combines with a weak national research capacity to push the responsibility for research and innovation onto public universities and public research institutes. The level of understanding of the importance of research is not high among political and institutional leaders. Policy decisions, for example, are more often than not based more on assumptions, values and personal experiences, rather than on systematically collected data. More broadly, there is not a sound appreciation of the relevance of research and innovation to the future economic independence and prosperity of National .At present, it is easier to buy solutions for complex problems in agriculture and industry from abroad, rather than invest in the development of a strong national research capacity.
Second, the capacity for research and innovation is not yet well developed. Universities are commonly understood to be producers of research but across higher education system the faculty are under qualified. Augmenting this capacity is a major challenge. There are limited opportunities in universities for making research presentations, obtaining proper guidance from supervisors, or accessing research equipment and materials. Not surprisingly, most aspiring doctoral candidates prefer to do their studies abroad, whether self-financed or with the support of scholarships. Of the lecturers with doctorates. Opportunities for study abroad are scarce, though, which limits the supply of developed research talent. Most senior and highly qualified full-time lecturers in public Higher Education Institute also teach part time in various private universities, which pay them on an hourly basis. The income they earn is a valuable supplement to their government salary of around USD 150-200 per month, which is not enough to support a family. There are no promotional or financial incentives for lecturers in public universities to conduct research and publish. Their major commitment is to teaching, and preparing for promotion to a management position.
Third, As a national continues to struggle with the idea of academic freedom. At National peace is fragile and there are sensitive topics (for example anything related to borders with neighboring concerning government corruption) on which research is not generally encouraged. Furthermore, it is difficult to find any local peer-reviewed journals that published.
External development agencies and some of the government’s policy advisory agencies are needed to expand research capacity. The UNDP, World Bank, Development Bank, and the International Cooperation Agency should invested significantly in research and development.Tanzania Investment and Consultant Group Ltd-TICGL official high-level think-tank, is playing a key role in drafting and advising on a national strategic development plan. In doing so, TICGL is working closely with Different Organizations and a number of key development partners to influence national policy and development. Partnerships to conduct research within government institutions and public universities have been sought for mutual benefits and with a view to building research networks and communities for knowledge management.
There is very little research co-operation between universities themselves, or between universities and either public or private enterprises. However, Development Organizations Agency, a non-government agency, has been providing valuable support for young researchers, especially for those fresh back from abroad. TICGL publishes the National Outlook Brief, in partnership with the The Economist Review and Acedial International Ltd. This publication is a key resource for many policy makers and decision makers in National Development . There are very few other instances of the skills of highly qualified persons being utilised in this way. In future, though, international and regional co-operation through networks will make it more likely for highly qualified to become engaged in research-based collaborations with colleagues from other countries.
Conclusions
Recent developments in the higher education sector have seen an increase in enrolments and an increasing number of graduates moving from the bachelor to the doctoral levels. The slowness of the government’s approach to policy development and implementation regarding research and innovation is, however, a concern.
Building a research and innovation culture is likely to be a long-term challenge.National has had an Education Law , a Policy on Research and Development in the Education Sector and the Five-year Master Plan for Research and Development. This legal and policy framework aims to guide universities, researchers and research institutes to expand and commit to research and development towards turning into a knowledge-based society.
It is commonly understood that research prepares the ground for reforms and for improvements in the quality and effectiveness of policy processes and implementation. Public universities need financial commitment from the government and external assistance agencies if they are to make any progress in developing their research and innovation capacity. While the government has made some financial commitment to enhance research and innovation, it is difficult to trace exactly how large the commitment is. Against this backdrop, any donor-driven research investments need to be made conditional upon the publication of high-quality research outcomes.
The financial and political commitment to research and innovation is weak for various reasons. The government has little capacity to fund priority research areas and innovation. Furthermore, the government has little appreciation of the benefits of a knowledge society, or of evidence-based decision making.
Research is most likely to be funded by development partners on a project basis. The World Bank’s has continuously urged investment in and more public attention on research and development. Future policy must focus on the development of properly funded public research universities that are autonomous in their governance and management. Performance standards for lecturers in these universities should stress the importance of quality in both teaching and research.
The management of research and innovation is currently not very effective. This situation arises from a lack of understanding of and a lack of political commitment to expanding research and innovation opportunities, particularly in any areas deemed to be politically sensitive. Policies and legal documents expressing a commitment to research and innovation are not supported in practice. There are almost no incentives for scholars and other highly qualified persons to engage in research and innovation.
Research achievements in universities do little to help staff climb the career ladder. Universities are required to play more of a role as business enterprises, delivering teaching services, to the detriment of research. They may also be producing graduates who lack the research skills needed for future national development or for the labour market of the future.
Public and private partnerships are not being sufficiently explored and developed. The private sector has a big stake in the quality of education and training, and could also be an important consumer of the research services if the universities were able to provide them. It should, therefore, be arguing for, and investing in, the development of a research and innovation culture and capacity in universities and research institutes.
For the moment, however, its voice is subdued.
In order to promote research and innovation at a policy level some measures/strategies that should be considered are as follows:
Leadership by government
The typology covers leadership in research and innovation (R&I) by government. This is a complex area and requires changes beyond training to address the gaps. These gaps are:
Research commitment and achievements now feature prominently in human resource planning and management. Academic promotion, career tenure and remuneration all take account of research capability and performance. The university’s autonomous status allows it to determine rules, regulations and guidelines for academic staff management that permit active and productive researchers to climb the academic career ladder more rapidly, and to acquire financial benefits as a consequence of their research productivity.
Individual staff members get a large proportion of any financial returns from the exploitation of their intellectual property and from patents. They are also recognised and rewarded for quality research outputs such as publications and citations.
Research programme planning and management
Senior administrators at the university are well aware of research trends, policy settings and funding opportunities for research, both within and outside. National is still establishing legislation and restrictions on and requirements for some types of research activity, but the university is contributing to their development and its administrators and major researchers are well aware of them. Researchers at large, however, have different levels of awareness. The implementation of financial auditing, compliance, and performance reporting needs more rigour and scrutiny although the requirements are understood. The university exercises its autonomy by having committees responsible for formulating research policy, mechanisms and for implementing research evaluations.
Strategic planning for research and innovation has been in operation for many years, but the rigour of its implementation varies. Even though the university has been working towards becoming a significant research institution for the past 30 years, it will take more time for it to fully establish a real research culture and ethos. Its risk management processes concerning research and its products have only been initiated during the past four years and are still limited. It has had a goal of university-industry collaboration for several years, but this remains largely at the policy level, with not many significant instances of implementation. Collaboration would require different mindsets and expectations from both sides – academics aim at excellence and perfection, while industrialists base decisions on utility and profits. The university would have to build trust with private sector over its ability to deliver in a timely fashion and the quality of its research outputs.
The university has increasingly active channels for communication internally and with external stakeholders, as well as with the public at large, with a special office responsible for this area. The efforts of this office appear, however, to lag behind the rapid rate of change and the growth in new opportunities. The University has a popular radio station, for instance, with a capacity for broadcasting programmes over the Internet, but now it must look at the prospect of having to develop a multimedia television station.
Mechanisms to support university-industry linkages remain at a conceptual level, or are implemented on a grant-by-grant basis. Truly collaborative ventures need further exploration to suit the local conditions and culture. Researchers, inventors, engineers, manufacturers, marketing experts and investors, as well as users, all have different points of view which need to be distinguished, and a culture of teamwork needs to be developed.
Gaps at University
There are a number of gaps in both institutional leadership and research management in University. Research and development is fairly well addressed, but innovations need more emphasis. Frequent changes in administrators mean that the skills for the implementation of strategies need to be constantly developed. Research management training must be an on-going activity. There needs to be a concerted effort to develop the rules, and guidelines for good research practice that are appropriate for the local conditions. International collaboration could be further strengthened with new knowledge and skills. A big gap exists in relation to the scaling up of research and innovation to a commercial level, as well as in marketing and entrepreneurial activities. In particular these gaps include:
Discussion
As a developing country that has long recognised the need for research in support of national development. For many years it has been developing its universities and research institutes, but with inadequate financial and human resources, and with inappropriate structures and mechanisms. Although the higher education system started about a century ago, its research function came late, starting with the creation of the National Research Councils. Inadequate structural planning has resulted in an unbalanced, fragmented and redundant structure. There are serious gaps in the country's innovation platform and a lack of adequate mechanisms for innovation development. Spending on R&D is low compared with international statistics and very low when compared with developed and other emerging Asian countries. Private-sector investment in R&D is also very low. While the shortage of R&D personnel in Thailand is recognised as a problem, it will take a long time to remedy.
As a national we needs to reform its research system if it is to meet the challenges of a more competitive world and if research, development and innovation are to play their part in national competitiveness. It also needs to improve the quality of its research management. Senior executive programmes for high-level policy makers would improve policy formulation and implementation, including financing and human resources development. These should place particular emphasis on the sources of funding and how to mobilise them. Even though granting agencies, universities and research centres have developed their research managers, middle managers still need additional training to enable them to take on a broader range of functions, including funding mobilisation and quality measures. Improving the quality of research processes and outputs will require standards and appropriate flexibility. Quality evaluation of research results and innovations, both by peer review and by other stakeholders, must be strengthened. The need for training of research managers must, therefore, be recognised and actively pursued. It is also crucial to offer researchers a career structure.
Scaling up and commercialising research results and innovations is complex, involving many steps. It needs supporting infrastructure and investment in the process. Training would improve knowledge and skills in the strategic management of the utilisation and marketing of innovations as well as intellectual property matters, including licensing, incubation, start-ups, joint ventures, and other commercial alternatives. Collaborations between universities and industry and between individual academics and entrepreneurs collaboration would benefit from sensitive development.