13 Positive Role (Implications) of small scale industries
- They facilitate the exploitation and utilization of the idle local resources. This leads to the production of more goods and services hence economic growth and development.
- They increase government revenue through taxation. Small scale industries widen the tax base in form of employment opportunities created and various investments undertaken hence generating more tax revenue to the government. The revenue realized is used to construct social and economic infrastructure like hospitals, roads, schools, power plants, roads etc.
- They create employment opportunities. This is due to increased resource utilization and a number of production and other economic activities carried out. This increases the income of the people. This is true because most of the small scale industries use labour intensive” techniques of production.
- They facilitate technological development in the country. Small scale industries form the basis for the development of appropriate technology in developing countries through inventions and innovations. This increases efficiency hence production of better quality goods and services.
- They lead to the development of social and economic infrastructure. Small scale industries promote the development of social and economic infrastructure in form of roads, schools, hospitals, financial institutions etc. so as to facilitate trade in the economy. ‘
- They improve the balance of payment position of the country. Small scale industries increase the production of goods and services for domestic market. This helps to save the scarce foreign exchange which would be used for import purposes hence better balance of payments position.
- They help to improve the standards of living. Small scale industries produce a variety of quality consumer goods and services in the economy. This widens the choice of consumers at reduced prices hence better standards of living.
- They promote urbanization and monetization of an economy. This is because small scale industries promote trade and commerce in the economy.
- They promote inter sectoral linkages in the economy especially with the agricultural sector. This is because the small scale agro-based industries provide factor inputs to’ the agricultural sector and market for the products from the agricultural sector in form of raw materials.
- They promote balanced regional development. This is because small scale industries require little capital and they are widely distributed in the country. This promotes equitable distribution of income.
- They increase the GDP of the country. This is due to increased production and economic activities in the country which promote trade in the economy hence high levels of national income.
- They promote industrial development. Small scale industries form the foundation on which the modem large scale industries are built in the long run. ‘
- They help to create a class of entrepreneurs in the economy. The small scale industries act as a training ground for individuals through which they acquire the necessary practical skills required to operate modem industries. This promotes managerial capacity building and helps to reduce government expenditure on training costs.
CATEGORIES Economics
TAGS Dr. Bbosa Science
