Small-Scale Industry Promotion: Economic and Social Impact Analysis

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The end of 1960s has witnessed many developing countries with high level of unemployment and inequitable distribution of income. Several strategies have been emphasized, the most popular of which is the promotion of small-scale industries (SSE). These industries are labor-intensive and are therefore suited to labor-abundant countries such as the Philippines. It has also been argued that these improve income distribution and promote rural and regional development. This paper examines the effects of small-scale enterprises on economic and social concerns focusing on the government’s effort for its promotion and its economic and social impacts. Results indicate that while SSE’s contribution to development may have been overstated, support rendered to it is worthwhile. It has been found out that SSE has significant positive impact on employment, production, energy efficiency and income. However, its impact on health, fertility, migration and environment is difficult to determine and is therefore not conclusive.