Entrepreneurship, for many, is a viable alternative to employment, especially in contexts where employment opportunities are few and wages and incomes low. The World Bank estimates that Micro, Small and Medium Enterprises (SMEs) contribute approximately 51.5 percent of GDP in high income countries-but only 15.6 percent in low income countries. The smaller “informal” micro-enterprise sector accounts for an average of 47.2 percent of GDP in low income countries, but just 13 percent in high income countries. Interestingly, higher income regions generate more SMEs per 1000 people than do lower income regions.
The imperative to earn and to generate an income propels many men and women into entrepreneurship in the developing world, where opportunities in the formal labor market are limited, and where working for oneself, or setting up micro and small enterprises, is often the only viable livelihood option. It is not surprising, therefore, that the majority of these enterprises in the developing world are informal and that owners, managers and workers labor without pensions, social protection and the rights afforded those in the formal economy. These challenges notwithstanding, micro and small enterprises sustain households and families and inject critical resources in local economies worldwide.
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