Small scale businesses in Zambia: their role in employment creation

Abstract

The study investigated Zambian government’s belief that small manufacturing firms can provide employment particularly to the ever growing jobless school drop-outs. The objectives were to: (a) measure the job creation capacity of small firms; (b) determine the attitudes of Copperbelt University's School of Business and Industrial Studies’ (SBIS) students and graduates towards starting business and adequacy of educational received; (c) examine effects of the Zambian leadership code on the creation of small businesses; (d) find out the role of government and small business support institutions in promoting small businesses. The four main results were firstly, that small firms significantly generated more employment than large firms over ten years. Secondly, among the four main entrepreneurship theories discussed, Chells’ environmental-situational-personal model, was more applicable to Zambia since no single model explained the process of entrepreneurship. This however demanded, 'inter alia’, a high level of education and own capital. Thirdly, government’s role in small business promotion, directly and through its agency (SIDO), was practically negligible and to some extent negative. Financial institutions and local authorities had virtually no programmes for small firms. Fourthly, SBIS students and graduates had, on the whole, positive attitudes towards starting businesses and educational preparations received at SBIS for working in large or small firms(but not for business ownership). Over a period of six years, none had selected entrepreneurship as a career upon graduation. Only one initiated a business later. Training of graduates for work in small and large firms through the Bachelor of Accountancy degree (BAe) was found to be unacceptable to employers. Major recommendations included firstly, the need for the government to : (a) take a greater promotional role; (b) abolish the Zambian leadership code; (c) encourage local authorities to be more responsive and (d) promote entrepreneurship in higher educational institutions, among government’s and parastatals’ employees. Second, SBIS was strongly advised to: (a) re-evaluate some courses; (b) introduce small business majors and Graduate Enterprise Programme ; (c) extend the present Bae into a professional qualification and co-ordinate with professional bodies; (d) enable academic staff gain industrial experience.