Características de la calidad de vida

Deen-Swarray, Ndiwalana and Stork (2013:1) compared informal businesses in the developing and developed world. They specifically note that informal businesses in the developed world are mainly seen as undesirable, linked to tax invasion and illicit labour practices, while in the developing world they constitute the main source of jobs and livelihood for the poor. Deen-Swarray, et al. (2013:1) further noted that formal businesses in developing countries often only employ a small share of the total workforce while informal businesses provide the workforce for the formal sector on either an occasional or permanent basis.

According to Delbiso (2013:1), informal businesses play an important role in urban poverty alleviation through creating jobs while they also provide a wide range of services and produce a variety of basic goods that can be used by all classes of consumers, especially by the low income groups. Delbiso (2013:1) added that alongside the above identified roles, these businesses can serve as a breeding ground for new entrepreneurs and can absorb the labour force that is excluded from the formal sector employment. They can also contribute significantly to reducing urban crime and violence through providing incomes to the would-be idlers.

While it is argued that people’s involvement in informal businesses has a negative impact on local and regional economies due to unfair competition of those involved as

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they do not pay taxes, informal businesses provide additional disposable income to households and individuals thereby lowering poverty levels (Llanes & Barbour, 2007:12). Furthermore, Llanes and Barbour (2007:12) noted that informal businesses may also play a part in the economic dynamism of a depressed local economy and encourage entrepreneurial activity and skills development.

Wiid, Cant and Van Niekerk (2013:1087) complemented Llanes and Barbour (2007:12) by stating that informal businesses have a vital role to play in the growth and development of any country and further state that this may be more so in third world countries. Wiid, et al. (2013:1087) further noted that informal businesses have become the principal element of job creation in many countries and pointed out that in some cases up to 80% of employment is vested in informal businesses.

Van Broembsen (2010:260) noted that informal businesses also play a critical role in contributing to the national Gross Domestic Product (GDP). Van Broembsen (2010:260) stated that although estimates of the size and contribution of informal businesses to the GDP vary considerably, every ten households in informal settlements engages in some kind of informal income generation activity that contributes to the country’s GDP. However, such findings cannot be generalised as the author’s results were based on one nation’s economy.

Onwe (2013:63) highlighted that informal business in developing countries plays an important economic role in stimulating the growth of the market economy, promoting a flexible labour market, stimulating productive activities and absorbing retrenched labour from the formal sector. Furthermore, informal labour has become a convenient means of pursuing the global agenda of privatisation and liberalisation. Bukaliya and Aleck (2011:57) complemented Onwe (2013:63) by stating that the importance of informal business activities in the economic development of poor countries has been recognised in nearly all countries of the world. Bukaliya and Aleck (2011:57) further pointed out that informal business operations deserve due attention especially in developing countries as they provide cheap labour and the means of production owned by a few foreign companies.

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Lamba (2011:252) stated that the emergence of the informal sector in urban areas is considered as an effect of labour growth in the area and notes that the owners of informal businesses aim at seeking employment and creating income. In addition, Lamba (2011:252) points out that although the owners of informal businesses are generally impoverished, low-educated and unskilled migrants with less investment capital, most of them have successfully developed their businesses and ultimately provided employment and income to the urban populace.

Thus, Lamba (2011:252) concurred with Wiid, et al. (2013:1087) who noted that informal businesses have become the principal element of job creation in many countries. The same view is shared by Willemse (2011:1) that, in many developing countries and through-out most of Africa, the informal economy contributes significantly to the provision of employment to people. On the other hand, Ferreira-Tiryaki (2008:91) stated that informal businesses have become a significant part of the economic activity of many countries as they act as intermediaries between formal businesses and the households and final consumers of formally produced goods and services.

Tshuma and Jari (2013:250) asserted that informal businesses in developing countries not only make a significant contribution towards the gross domestic product, but are also a major potential source of entrepreneurship, hence a source of income to especially the less educated and less skilled. DeMolay and Anyakora (2012:219) highlighted that the informal sector is generally viewed as another sector, outside the normal organised formal sector, that provides employment and sustainability through engaging in a variety of activities such as street trading, hawking, local manufacturing and cobbling.

From the review of literature it is noted that informal businesses play various but vital roles ranging from provision of employment to the majority of family members and relatives (Deen-Swarray, et al. 2013:1; Delbiso, 2013:1), to provision of disposable income to owners and workforce (Llanes & Barbour, 2007:12) and, although not registered by official tax bodies, contribute to the GDP especially through consumption (Tshuma & Jari, 2013:250). Despite their significance, literature shows that the majority of informal businesses do not grow and survive for long in business (Uganda National

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Household Survey, 2010:143). The following section therefore examines in detail previous research regarding the growth of informal businesses in order to identify the factors influencing the growth of informal businesses.