Importancia de la calidad de vida en los adultos mayores

According to David, Ulrich, Zelezeck and Majoe (2013:14), while there are disagreements on the definition of the informal businesses, most definitions nevertheless emphasise a number of characteristics, namely, small scale, low level of organisation, low productivity and operations outside of the state licensing and regulation framework. David, et al. (2013:14) further pointed out that informal businesses are broadly characterised as consisting of units engaged in the production of goods or services with the primary objective of generating employment and income to the persons concerned. David, et al. (2013:14) accentuated that these business units typically operate at a low level of organisation, with little or no division between labour and capital as factors of production and on a small scale. Furthermore, David, et al. (2013:14) highlighted that labour relations, where they exist, are based mostly on casual employment, kinship or personal and social relations rather than contractual arrangements with formal guarantees.

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According to Wong and Ho (2007:44), while studies have done much to shed light on the characteristics of informal businesses, the studies are mainly based on samples from highly industrialised Organisation for Economic Corporation and Development (OECD) countries which may not accurately reflect the characteristics of informal businesses in developing countries. Based on samples from Singapore, Wong and Ho (2007:44) distinguished between two types of informal businesses, namely, business angels and family businesses. Business angels are defined as individual financed businesses based on the individual’s personal wealth where that individual has no family ties, while family businesses are defined as those financed by the family member or relative within the past three years. In both cases, Wong and Ho (2007:44) excluded the purchase of publicly traded shares or mutual funds. Hence, Wong and Ho (2007:44) suggest that soliciting venture capital from individuals, whether a relative or not, is one of the basic characteristics of informal businesses.

In complement to Wong and Ho (2007:44), Diaz-Moriana and O’Gorman (2013:631) noted that the most common source of funds used by informal businesses owners is their own finance on top of which they may use other sources of equity capital, including equity investments from family and friends who typically provide small amounts of funds at the start-up stage. Diaz-Moriana and O’Gorman (2013:631) further stated that informal businesses have an opportunity of soliciting capital from business angels, who typically invest larger amounts of funds at the start-up and early stages of development of new businesses.

Sookram and Watson (2008:1531) stated that informal businesses are a source of income for the poor. It is also associated with not being productive. Furthermore, it is underscored that informal businesses are not just a survival mechanism for the poor, but a means by which the educated and skilled individuals evade income taxes. Therefore, the way informal businesses operate may not be by nature, for instance due to limited capital, but may be deliberate to hedge risk from external forces such as taxation and other government regulation. Sookram and Watson (2008:1531) affirmed this by highlighting that an increase in the size of the tax burden and the consequent desire to

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evade such taxes is one of the main motivating factors behind participation in businesses within the informal sector.

Abdelhamid and Mahdi (2003:1) noted that informal businesses are both unpredictable and unstructured. In the category of informal businesses, Abdelhamid and Mahdi (2003:1) cited a range of examples that included street vendors, garbage collectors, parking men, petty traders, casual labourers, shoeshine boys, rickshaw pullers, unlicensed small producers, service providers, retail and wholesale traders, and kiosk owners. Abdelhamid and Mahdi (2003:1) further noted that all informal businesses are small operators who are productive and sometimes innovative, although Ligthelm (2013:59) states that not all small businesses are informal businesses as some are registered and operating formally.

Abdelhamid and Mahdi (2008:1) commended the fact that informal businesses are often able to generate employment opportunities for workers, family members and serve their communities both in terms of employment and goods and services. However these authors pointed out that one of the most common features of informal businesses is that they all struggle with cumbersome, expensive and complex entry regulations that are primarily imposed by governments and their affiliate legal apparatuses. Abdelhamid and Mahdi (2003:1) agreed with Sookram and Watson (2008:1531) that informal business owners make the conscious and deliberate decisions to avoid complying with legal procedures and therefore operate informally.

In line with Abdelhamid and Mahdi (2003:1), Chirisa (2013:1) noted that informal businesses are carried out by the road side, in homes and by mobile operators as they move around. Chirisa (2013:1) further notes that these transactions are usually not documented and those who participate in such trade do not pay taxes to the revenue authorities. Chirisa (2013:1) further acknowledged that the closest informal businesses come to being registered is through the subscriptions or hawker’s licenses payable to the City Council. Chirisa (2013:1) further emphasised that only those who sell their products at designated areas usually pay these subscriptions while the majority flee every time they see the council officials approaching.

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Ademola and Anyankora (2012:219) established that informal businesses are characterised by small scale operations, labour intensive techniques, low-income families, private and indigenous ownership of enterprises that are largely unprotected by government. Ademola and Anyankora (2012:219) further highlighted that the main features of informal business units are: ease of entry; small scale of the activity; self- employment; little capital and equipment; labour intensive technologies; low skill; low level of organisation with no access to organised markets, formal credit, education and training or services and amenities; low productivity and low income. Ademola and Anyankora (2012:219) concluded that informal business owners generally live and work in dreadful, often dangerous and unhealthy conditions, usually without basic sanitary facilities, in the shanty towns of urban areas.

The Uganda National Household Survey (2010:143) noted that the informal sector covers all business activities, as specified in the International Standard Industrial Classification (ISIC Rev IV). The survey further noted that these businesses are normally characterised by the absence of final accounts, having less than five employees, no fixed location, in most cases not registered and sometimes such businesses are operational for only six months or less. The Uganda National Household Survey (2010:143) thus concurred with Chirisa (2013:1) and Abdelhamid and Mahdi (2003:1) that the majority of informal businesses are not formally registered, operate as mobile businesses and employ less people.

In concurrence with Chirisa (2013:1), Botha (2012:3) stated that the general understanding among formal sector participants is that informal sector businesses are characterised by, among others, a level of unethical behaviour or conduct such as bribery, deception, untrustworthiness, theft and coercion.

It is thus evident from the review of literature (Chirisa, 2013:1; Abdelhamid & Mahdi, 2008:1; Sookram & Watson, 2008:1531; Uganda National Household Survey, 2010:143; Wong & Ho, 2007:44) that informal businesses are largely characterised by lack of legal registration, tax evasion, temporary workplaces which are mobile in most cases, and that they are family businesses employing immediate family members or relatives.

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Moreover, it is evident that informal businesses do not prepare final accounts and employ few employees (less than five people) (Chirisa, 2013:1; Abdelhamid & Mahdi, 2008:1). Hence informal businesses are generally characterised by small scale of operations, employment of few workers, limited government legislation, tax evasion and temporary work structures. However, informal businesses are of significant importance as these businesses generate employment opportunities for family members and other workers, and serve their communities with jobs and goods and services. In order to convincingly conclude about their importance, it is necessary that a review of the importance of these businesses is provided. The following subsection therefore is a review of the importance of informal businesses.