The distributional role of small business in development

Abstract

Economic growth, without distributional measures and policies, engenders inequality and concentration. National income may be distributed either through the establishment of a proper welfare system, or by the encouragement of and incentive for economic activities and policies with built‐in distributional factors. The prerequisites for sustainable income distribution are fair distribution of assets, investments and power. The main outcome of the growth‐based developing theories and activities are concentration of production, people and financial and political power. These concentrations are the sources of many problems of both developing and industrialised countries. Although there have been countless studies about development, few have made an attempt to investigate the social and economic interactions of small business with sustainable development. Small business’ contributions to the process of development, in terms of distribution of economic and non‐economic resources, are substantial. This article will explore the economic and political distributional power of small business and their roles in the process of socio‐economic development.