Small Business or Employment Better?

Recent post in Social Edge explored an important question of whether we should work with the poor as employees or entrepreneurs. This question has important implication especially to social enterprises that prepare the poor as entrepreneurs. As highlighted in the post, not all will want or have the characteristics to be entrepreneurs. The transition from welfare is challenging since entrepreneurial work is often associated with fluctuating income. Business education needed and learning cycle may also take away some earning potential. I think the key consideration to effectively blend entrepreneurial and employment characteristics can broadly fall into 2 areas.

Specific living context – Their poverty condition, their desire and capacity to run small business could yield initial insight, further assessment along the transition challenges from welfare to work, education and support that they need to follow through the intervention programs will provide firmer indication on how to blend effectively.

Programs and goals – Income generation does not necessarily mean intervention should incline toward business ownership, whether it's better to own small business or to be employed should not be turned into ideological debates. It takes evidence from practices to determine which route is actually more effective under different contexts. For example, locals recruited as sales agents in the rural supply chain obviously display entrepreneurial and employment characteristics but without the need to own the business. They have to be entrepreneurial to sell while they could be attached to outsourcing agencies or the product companies with stable basic income and support to work. 

No matter how much we want to leverage on market-based approach, I think another important aspect that we should not neglect is how to blend in welfare/ subsidized assistance throughout the intervention, which ideally should cease in significance as the poor make more progress.