MODULE 4: INDUSTRIALISATION AND URBANISATION informal sector of the economy

and suggest possible solutions;

TOPIC GENERAL SPECIFIC OBJECTIVES - Compare and contrast the process
OBJECTIVES and impact of urbanisation in
Learners should be Learners should be able to: Botswana to that of other
able to: developing countries in the SADC
Industrialisation Describe the process of - Explain the industrialisation; region.
industrialisation and its - Evaluate different strategies for
impact on industrialisation including import
development. substitution, export oriented INDUSTRIALISATION
industries, small and large scale
enterprise, multi-national An industry is the production of everything (goods & services) other than
companies, local investment and those produced in agriculture.
joint venture;
- An industry is any activity which is aimed at economic gain but
- Describe the characteristics of
modern industries including
particularly applied to manufacturing industry.
mechanisation, advanced Industrial production is the making of goods and provision of services on
technology, a wide range of raw a large scale using mechanical energy
materials, synthetic products, Industrial production is the making of goods and provision of services in
division of labour, automation, factories on large scale using mechanical energy or advanced technology
robotics, feminisation of the Industrialisation is the process of setting up organisations for the making
labour force, sub-contraction, of goods and provision of services, especially in the introduction of
cottage and co-ordination of manufacturing industry.
specialised tasks; Industrialisation is the process of growth of large-scale machine
- Discuss the effects of production and the factory system.
industrialisation;
This is done through manufacturing, mining, construction, assembling, and
- Discuss the successes and
energy/power and service production.
challenges of newly industrialised
countries;
- Investigate the impact of HISTORICAL BACKGROUND
industrialisation on their locality. Industrialisation started in Europe in the early 18th century. The main aim
Urbanisation Explain the dynamics - Explain urbanisation, urban was to speed up the production of clothes from cotton and wool. Later on
of urbanisation and its growth, rural-urban, urban-urban similar methods to those in the textile industry were employed in the
impact on development migration and primates cities; production of other goods and services. By the end of 19th century many
in Botswana and the - Discuss the effects of countries of Western Europe, North America and Japan had started to
SADC region. urbanisation; industrialise.
- Suggest possible solutions to
problems of urbanisation; In Botswana, industrialisation is still at infancy or primary stage. The
- Explain the formal and informal
country only started to industrialise after attaining its independence. It is
sectors of the economy;
therefore in the category of industrialising or developing countries.
- Account for the growth of the
formal and informal sectors;
- Discuss the problems of the

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
 THE STRATEGIES FOR INDUSTRIALISATION - Providing the necessary infrastructure such as telecommunications,
water and power.
- The government investing directly in heavy industries which are of
strategic importance or which cannot attract private investors.

Other Advantages of Import Substitution Industrialisation (ISI)

Strategy

- There is creation of employment.

- Improved infrastructure.
- A country earns foreign exchange if it produced surplus goods
which could be exported.
- Workers acquire skills and knowledge.
- Local raw materials can be used. So the goods may be cheap.
There are two broad strategies for industrialisation which have been used - A country saves money which could be used for other economical
successfully by many industrialised and Newly Industrialised Countries activities.
(NICs).
These are Import Substitution Industrialisation (ISI) and Export Oriented THE DISADVANTAGES OF IMPORT SUBSTITUTION
Industrialisation. INDUSTRIALISATION
These could be implemented through Multi-National Corporations, Local - Home market is too small and expansion is limited.
companies, Small scale and large scale, and joint venture. - A country still needs to import expensive machinery or technical
knowhow to produce goods.
IMPORT SUBSTITUTION INDUSTRIALISATION (ISI) - A country does not earn foreign exchange.
Import Substitution Industrialisation (ISI) is when the country starts - Depletion of local raw materials.
making goods itself instead of importing them from elsewhere. - There could be limited variety of goods.
A deliberate effort is usually done to local industries through :
EXPORT ORIENTED INDUSTRIALISATION (EOS)
- Putting high tariffs on imported goods. Export Oriented Industrialisation (EOI) is whereby a country develops
- Providing loans and grants to local business people by the industries directed towards exports, for example, products in high demand
government. in the outside world.
- Encouraging students to specialise in science and technology, so as This done for many reasons:
to provide the much needed skills. - to generate the high required foreign exchange.
- Starting national research centres to encourage technical - to create job opportunities for the locals.
inventions. - to encourage research, innovation and development skills.
- Inviting Multi-National Corporations to invest in the country to - to encourage economies of scale, for example, they can produce
produce for the home market. more for a bigger market and be able reduce the prices while still
- Controlling the workers so as to ensure stability at the work place. making profit.
- Protecting individual property rights at all times, thus reducing fear - to make more profit in using cheap local labour and export goods
from the private companies that their property may be nationalised. which may not find market locally.

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
 THE DISADVANTAGES OF EXPORT ORIENTED INDUSTRIES
- Local people’s needs may not be met because a country is only THE ADVANTAGES OF MULTI-NATIONAL
concentrating in goods for export. COMPANIES/CORPORATIONS (MNCs)
- Local raw materials may get depleted.  They bring with them capital, skills and technology.
- If products are not of good quality they may not compete well in  They reduce reliance on imported goods, for example, they can be
the world market. part of import substitution industrialisation.
- If the countries which buy the goods find an alternative goods or  They pay taxes to the host countries, thus generating income.
substitute the market may decline.  They create job opportunities.
NB: The two strategies can be achieved by various means, such as  They provide goods and services of better quality and variety to
Multi-National Corporations, Local investments, Joint Enterprises, the customers.
small scale and large scale industries.  They export and earn foreign exchange for less developed
MULTINATIONAL CORPORATION/TRANS NATIONAL countries-export oriented industrialisation.
CORPORATION  They widen the country’s income base, increase GNP.
 Some local clubs, teams, individuals usually benefit from this
There are large companies or firms usually based in the industrialised
obligations, for example, scholarship and sponsorship.
countries, with branches in some other parts of the world. These companies
THE ADVANTAGES OF MULTI-NATIONAL
are so huge that their annual turnover is bigger than GDP of most countries
COMPANIES/CORPORATIONS (MNCs)
including developed countries.
 They often use local saving which could be used for the benefit of
TNC COUNTRY OF PRODUCTS
the locals.
ORIGIN
 They often pay locals little salaries and take most profits back
Roche Switzerland Pharmaceuticals
home.
Honda Japan Motor cars and motor  Less Developed Countries (LDCs) often compete for MNCs, by
De Beers Republic of South Africa cycles providing them with incentives such as tax holidays, grants and
Sony Japan Diamonds loans. MNC’s move their products between countries so as to
Kodak USA Electronic goods avoid responsibilities and enjoy incentives from different
Nestle Switzerland Photographic equipment countries.
Bayer Germany Food stuffs  Some MNC’s are too powerful for local governments to control.
Exxon (Esso) USA Chemicals and medicines  MNC’s sometimes take advantage of ignorance of the locals to use
Phillips Netherlands Oil products methods which are not appropriate to the local environment and
General Motors USA Electrical goods conditions, for example, using capital intensive technology and
IBM USA Motor cars expertise.
Volkswagen Germany Computers  At times goods are produced are irrelevant to the local community
Coca Cola USA Motor cars or domestic market.
Unilever Netherlands Soft drinks  MNC’s encourage dependency and neo-colonialism through
Monsanto USA Foodstuffs and household dependence on foreign technology, foreign markets, foreign
products capital, foreign expertise etc.
Agri-chemicals and  They bribe and corrupt the host government or even interfere with
biotechn. goods in their politics.

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
 LOCAL COMPANIES LARGE SCALE INDUSTRIES

Local individuals or group of individuals can organise themselves and start This refer to huge production of goods, it involves machinery as well as a
businesses. lot of mechanical power.
THE ADVANTAGES OF LARGE INDUSTRIES
THE ADVANTAGES OF LOCAL COMPANIES  Encouraging mass production.
 Create linkages, for example, growth of interconnected industries.
 They are eager to make profit so they are prepared to work harder.  Economies of scale.
 They are flexible and respond well to local demands.  Quality production due to competition.
 They find out what people need and they try to meet their  Training of labourers.
demands.  Development of infrastructure.
THE DISADVANTAGES OF LOCAL COMPANIES
DISADVANTAGES OF LARGE INDUSTRIES
 They are profit oriented and they can exploit the locals. @REFER TO SMALL SCALE INDUSTRIES
 They face the problem of raising capital for technology.
 Locals usually prefer foreign goods than locally made ones. PARASTATAL
 If they produce in small quantities the cost of production may be
high leading to high prices. These are state owned corporations which are set if the government fails to
attract private inventions or it wants to “de-commercialise” the essentials
SMALL SCALE INDUSTRIALISATION commodities and services.
This refers to production done on small scale basis and involves the Examples in Botswana are: Botswana Telecommunications, Bank of
production of crafts work, for example, sculpture, curving, pottery, basketry Botswana, Air Botswana, Water Utilities etc.
etc.
THE ADVANTAGES SMALL INDUSTRIALISATION THE ADVANTAGES OF PARASTATALS
1. Their aim is not to generate profit but to provide essential services.
o They generate income as products are usually bought or purchased 2. If there is profit it is reinvented for the benefit of the whole
by pursuits. country.
o Employment creation in rural areas. 3. Effort is made to train and employ local workers at all levels of
o Utilisation of local resources, for example, raw materials and production.
skills. 4. The produce is made and sold at affordable prices.
o Reduction of rural-urban migration as they are usually rural based. 5. There is job satisfaction and security.
THE DISADVANTAGES OF SMALL INDUSTRIALISATION THE DISADVANTAGES OF PARASTATALS
i. Single or uniform products do not satisfy everyone’s taste or
 Unreliable markets or poor marketing strategies. wants.
 Lack of managerial skills. ii. Goods produced are usually of poor quality.
 Destruction of environment. iii. Civil servants usually lack motivation as they work for salary
 Financial constraints or lack of capital. rather than for prize.

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
 JOINT ENTERPRISES different tasks. In other words each worker has to specialise in small part of
the whole task.
A joint venture involves two or more business organisations or individuals
who combine their resources to form a new business operation. *Automation and robotics: In modern industries most of the machine
That is when an individual or the government join hands with foreign processes are controlled by computers. Such industries are called High Tech
individuals, companies, or government to form or start business, for industries. In such industries goods are not handled by people at all during
example, the whole production process. Only a few highly skilled workers are
- Debswana- Debeers and Botswana government required to ensure that the machine does its work properly.
- Bolux- Botswana and Luxembourg
- BCL-Botswana and Anglo-American *Feminisation of labour force: In industries today women are increasingly
- Murray &Roberts doing the jobs hitherto regarded as men’s work, and consequently their
THE ADVANTAGES OF JOINT VENTURE numbers are constantly increasing. This is because increased mechanisation
has done away with much heavy labour. Women excel in work requiring
(a) Economies of scale precision and delicacy of touch; they tend also to tolerate long hours of
(b) Encourage mass production machine-minding than men.
(c) Quality production
(d) Create job opportunities *Synthetic products: new technology has made it possible to replace
natural products with artificial ones, for example, synthetic fibre and
THE CHARACTERISTICS OF MODERN INDUSTRIES synthetic rubber made from hydro carbons derived from petroleum.

Modern industrial production is complex and highly mechanised. In order to * Sub-contraction: Because of high specialisation in industries some
industrialised, a country must have natural resources [land], human companies find it increasingly hard to complete some tasks alone. They hire
resources [labour], financial resources and entrepreneur skills to help in the some companies to do part of the job.
production of goods and services. Here are some of the characteristics of
modern industries: *Cottage industries: the manufacturing wholly or partly carried out at the
home of the worker. Here a big industry could supply raw materials to the
*Raw materials: Raw materials may determine the location of an industry, cottage industry operator, to turn them into finished goods for a fee and then
for example, industries using large quantities of bulky raw materials such as return it to the big industry for selling. This is done to minimise costs.
cement factory, brick work, iron making, will be influenced by the location
of the raw materials, for example, fruit and vegetable canning. *Coordination of specialised tasks: Large scale industries are made up of
large numbers of independent specialists, for example, in a mining industry,
*Advanced technology: Modern industries require complex technology. there are people specialising in engineering, research, sales, accounting,
The machinery is very complicated and expensive, it requires special skills advertising, etc.
to produce and repair it.

*Mechanisation: Modern industries require factory buildings, machinery

and various types of equipment.

*Division of labour and specialisation: for the factory to be more efficient

and to make products within a short time it needs to divide its workers into

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
 THE EFFECTS OF INDUSTRIALISATION Examples of newly industrialised countries are South Korea, Brazil, Egypt,
Industrialisation and development are closely related. Development can be India, Argentina, Singapore, Hong Kong, Taiwan, China etc
either negative or positive and so do industrialisation.
THE ARGUMENT FOR INDUSTRIALISATION (POSITIVE SUCCESSES
EFFECTS)  There is creation of employment.
- Through industrialisation the country can produce more goods and  Introduction of new technologies.
services, so the GDP will increase.  More exports.
- More jobs can be created. There will be different jobs for the  More foreign exchange.
locals. CHALLENGES
- The standard of living will increase since people will have more  Competition with developed countries.
choices.  Local people do not have the buying capacities.
- The government can collect more money to spend on welfare  Shortage of buyers in the international market because of low
services. quality and environmental pollution.
- When a country has its own industries it is more independent.
- Industry can produce surplus for further investment. CASE STUDY-BRAZIL
THE ARGUMENT AGAINST INDUSTRIALISATION (NEGATIVE
EFFECTS ON PEOPLE) Brazil is one of the examples of successful industrialised countries of the
South. She managed that through the help of her motor industry, through
- People have to change their way of life, move into cities and often which she managed to implement import substitution and export oriented
lose touch with family and friends industrialisation strategies.
- Work has to match the pace of the machine. Some jobs are Brazil invited Multi-National Corporations such as Ford, Volkswagen, and
repetitive and boring. General Motors to set up industries in its territory.
- People may become greedy for more and more goods. Wealth These industries were attracted through grants, loans, flexible rules allowing
becomes more important than human relations. companies to send profit home.
- Industries tend to use up natural resources, like minerals and fossil A 200% tariff was levied on all imported cars, making them three times
fuels which are non renewable. expensive in Brazil.
- They may forget the importance of agriculture and craft The government gave loans to the Brazilian companies to set up support
production. companies such as battery companies, tyre companies and wire companies.
- Traditional culture may be lost or changed. The government built heavy industries such as steel mills to supply car
THE EFFECTS ON THE ENVIRONMENT industries with locally made steel.
Large cities grow up around the industries often with problems of poor The government also developed infrastructure such as roads, railways, sea
housing, overcrowding, bad sanitation, diseases. ports and imported oil.
Industries pollute the land, air and water. BENEFITS
THE SUCCESSES AND CHALLENGES OF NEWLY
INDUSTRIALISED COUNTRIES  Jobs were created.
 New technology was brought into the country.
These are countries with new and fast growing industries. They are third  Research and design were created for new inventions.
world countries which started industrialising after the Second World War.  Standard of living rose.
 Export market grew.
 Profit used to diversify production.

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
PROBLEMS

 Gap between the haves and the have nots widened.

 Workers worked for a long time but paid very little.
 Urban poverty increased.
 Workers not allowed to strike.
 Working conditions crowded and unhealthy.
 Damaged caused to the equatorial forests and tribal cultures.
 The country not able to pay its loans due to high interests and low
production.
 Corruption grew or money stolen / misused by leaders.
 Severe imported inflation, for example, due to rise in petrol prices.

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
 URBANISATION THE CHARACTERISTICS OF A PRIMATE CITY

EXPLANATION OF CONCEPTS: - The characteristic of a primate city is that of an area where

government would normally aet up its administration, for example,
 URBANISATION-an increase in the proportion of the people parliament
living in towns and cities.
- Primate city is an area where a national university and technical
 URBAN GROWTH-the increase in the physical size of urban training schools are located.
area.
- Primate city has the best infrastructure, for example,
The difference between the two is that urbanisation means an increase in the communication networks and most of financial investment.
percentage of the population, whereas urban growth may not necessarily
affect the percentage of the population, even though the physical size of the - Primate city is an area where many private companies headquarters
urban area increases. are found or is a centre of commerce

 TOWN-a small urban settlement. - More industries

 CITY-a large urban settlement.
- More population
NB: The criterion for classification of a settlement into either an urban or
rural one varies from one country to the other. For example, any settlement THE CAUSES OF URBANISATION
of 5000 or more people, with about 75% of its labour force involved in non- The main ones are:
agricultural employment is regarded as urban in Botswana. In contrast the 1. Natural Increase
United Nations regard a settlement with 20 000 or more people as urban. The population increase in this case is caused by birth rate being higher than
death rate.
 PRIMATE CITIES-originally these were ports which were set up It is calculated by subtracting the rate of death from the rate of birth (BR-
by colonial governments as their administration centres. DR=NI).
The incidence of this can be attributed to improved health facilities, diets,
Over the years, these settlements attracted a lot of people from water and sanitation and the general standard of living.
rural areas, and most of the economic activities in these
settlements are more industrial than agrarian. 2. Migration
Examples are Lagos, Accra, Freetown, Abijan, Dakar, Dar es This is the process of moving from one area to the other with the intention
Salaam and Addis Ababa. of staying at the area of destination for a reasonable length of time.
Permanent migration is when one moves from one area to another without
What is a primate city? the intention of moving elsewhere, or returning to their place of origin.
Temporary migration is when one moves from place to the other to stay
- Primate city is the largest urban centre or areas whose population for a short period of time.
is at least twice or double that of the second largest in a country. Internal migration is when one moves within the same territory or
country.
External migration is when one moves across borders or territorials
boundaries.

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
 (b) NEGATIVE

 Migration deprives rural areas the much needed labour in

agriculture since most of the migrants are the able-bodied men and
women in the community.
 Division of labour has changed in rural areas as a result of
migration. In the past, women were only responsible for the small
livestock like goats and chickens, but with the absence of men,
they now look after cattle.
 Disruption of family life due to the ill discipline of children
Migration may be a result of push factors (negative things that force people especially boys left with their mothers in rural areas.
to move) such as inadequate social amenities (education, health facilities,  There is an imbalance in the sex ratio. Most of those left in rural
etc), desire to break away from traditional way of life, poverty, poor areas are women.
farming methods, lack of investment opportunities, lack of employment,  Traditional way of life is in most cases not practised since a lot of
higher prices of goods in rural areas, wars, drought and poor harvest. people prefer the modern way of life. In some instances this comes
with the bad behaviour of urban life.
Pull factors such as improved social amenities in urban areas, high
opportunities of getting a job or investing or better-paying jobs, relatively THE EFFECTS OF MIGRATION ON URBAN AREAS
cheap prices of goods, security, high opportunities for modernity. (a) POSITIVE
- Migrants provide the much needed labour in urban centres,
2.1. RURAL-URBAN MIGRATION especially unskilled and semi-skilled, for example, in factories,
This is when people move from rural areas and settle in urban areas. homes, etc.
- Migrants increase employment opportunities in urban areas when
2.2 URBAN-URBAN MIGRATION they use some of their earnings for investments, for example,
This is when people move from urban areas and settle in other urban areas. starting up their own businesses.
- Migrants bring in some new ideas or survival skills to urban areas,
THE EFFECT OF MIGRATION ON RURAL AREAS for example, how to survive on very little means.
- Increase in population in urban areas may result in increase and
(a) POSITIVE improvement in the infrastructure in urban areas.
 Migrants send some money or remittance home. In some cases this - Migrants provide the markets for the goods and services in urban
is the only source of income in rural areas. areas.
 Migrants who work outside the country sent remittance in the form (b) NEGATIVE
of foreign currency, thus earning their country of origin foreign Migration in most cases results in rapid urbanisation (tendency of having
money. more people living in urban areas than in rural area at a rate that the national
 Migrants bring in new and advanced technology back to their economy cannot sustain). This brings a lot of problems:
communities. - Pressure on social amenities, for example, schools and hospitals
 Migrants can invest their income in rural areas, for example, by - Increased crime and social unrest.
building some residential houses, shops, etc, thereby creating - Shortage of clean water.
employment. - Poor sanitation services.
- Shortage of housing.

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
 - Pollution - The jobs often require skill and training.
- Increased unemployment rate. - Production is usually done on a large scale basis.
- Traffic congestion. - Employees receive regular wages or salaries.
- Diseases are spread at very high rate. - Complex technology is often used.
- Increased poverty, or low standard of living
ASSIGNMENT: Discuss the advantages and the disadvantages of the
THE POSSIBLE SOLUTIONS TO PROBLEMS OF RAPID formal sector
URBANISATION THE INFORMAL SECTOR OF THE ECONOMY

 Systematic and well planned towns and cities.

 Management of the growth and use of private vehicles in urban
areas.
 Improvement of public transport.
 Establishment of a housing corporation that will build low cost
houses so that everyone will have decent and affordable house to
live in.
 Abolition of squatter locations.
 Setting up of more industries to create more employment
opportunities.
 Establishment of public work schemes in rural area to provide
work for rural dwellers in order to reduce rural-urban migration.
 Commercialisation of agriculture in rural areas.
 Encouraging rural-urban trade.

THE FORMAL SECTOR OF THE ECONOMY This sector of the economy is organised by individuals, and not the
government nor registered companies.
The formal sector is the part of the county’s economy that is organised by
the government and large firms.
It consists of small, locally owned workshops and home factories, fruits,
It consists of modern activities such industries, business and commercial
vegetable, clothes and jewellery markets, selling of firewood etc.
activities and government agencies.
CHARACTERISTICS
THE CHARACTERISTICS OF THE FORMAL SECTOR THE  The people are usually self-employed or provide service on small
ECONOMY basis for others.
 The wages are not guaranteed.
- The workplace is up-to-date and in most cases permanent.
 The jobs and workers do not belong to trade unions.
- The private companies pay tax to the government and run
according to the state laws.
ASSIGNMENT: Discuss the advantages and the disadvantages of the
- Workers get regular wages and are protected by the country’s laws.
informal sector.
- Workers have written contracts with their employees.
- Employees are free to belong to trade unions.

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
 THE POSSIBLE SOLUTIONS TO PROBLEMS OF THE - Informal sector is unregistered whilst the formal sector is
INFORMAL SECTOR registered or documented or the owners hold licence to do it.
- The registration of some jobs. - Informal sector is unprotected by the law whilst the formal sector
- They encourage skill acquisition training for all economic is protected by the law.
activities. - Informal sector has flexible working hours whilst the formal sector
- They encourage the use of appropriate technology and the local has fixed working hours.
resources. - Informal sector uses simple technology whilst formal sector uses
- They provide environmental education in order to reduce pollution complex technology
of the environment. - Informal sector is done on small scale whilst the formal sector is
done on a large scale
THE DIFFERENCES BETWEEN INFORMAL AND FORMAL - Informal sector is done in temporary shelters or in the open whilst
SECTORS OF THE ECONOMY formal sector has permanent buildings
- In informal sector, workers use natural talents while in the formal
sector people are trained for the work
- In the informal sector, taxes to the government are unpaid or
ignored but in the formal sector tax is paid
- In the informal sector, there is lack of trade unions but in the
formal sector trade union exist
- Wages in the informal sector are unguaranteed or irregular but in
the formal sector wages are regular/ guaranteed.

THE PROBLEMS FACED BY THE INFORMAL SECTOR

- Lack of capital/small gain/profit

- Lack of entrepreneurship skills
- Lack of proper shelter for operation so production is disturbed by
harsh weather
- Little market/competition for the formal sector/ competition among
themselves
- Lack of security so cases of theft are common
- Goods of poor quality due to poor technology
- Harassment by law officers
- Lack of credit worthiness
- Lack of recognition by the government.

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4
WOMEN CONTRIBUTION TO ECONOMIC DEVELOPMENT IN
THE INFORMAL SECTOR IN BOTSWANA

- Dominate specific important enterprises like catering,

dressmaking, child care/ provide services
- They utilise their natural skills like cleaning, cooking, weaving/
traditional skills/ use less business skills
- They create jobs for other people/self employment
- They provide a market for producers of specific materials like
cotton, wool, reeds for weaving/ increases market
- They can develop into cottage industry, for example, making cakes
at home for supermarkets
- They train themselves/ others/impart knowledge and skills to
others
- They form self help groups

THE REASONS FOR THE RAPID GROWTH OF INFORMAL

SECTOR IN DEVELOPING COUNTRIES

- The informal sector requires little capital to start

- They utilises natural skills/traditional skills/uses less business
skills
- There is less requirements for registration and licensing/ less paper
work
- There is high unemployment/ little expansion in the formal
sector/creation of employment for the unskilled
- The goods are attractive for their traditional value, for example,
arts and crafts.
- Their operations can be done anywhere.
- The goods are mostly affordable
- They Use simple and intermediate technology

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MASUNGA SENIOR SECONDARY SCHOOL DEVELOPMENT STUDIES MODULE 4