The role of small business in employment generation : a Manawatu study : a research paper presented in partial fulfilment of the requirements for the degree of Master of Philosophy in Development Studies, Massey University

Abstract

Unemployment rates in NZ have increased steadily throughout the recessionary period dating back to the early 1970s. This study, using both quantitative and qualitative anysis, examines what role small businesses can play in both regional and national economic revival. In the literature review it is demonstrated both internationally and regionally, that small businesses contribute significantly to employment opportunities during recessionary periods - far more than large firms. This was supported in a Manawatu study of 56 small businesses. Quantatively small firms in the region are, albeit slowly, expanding their workforces despite the economic climate. The chances of setting up a small firm are still not too difficult. Qualitatively these small businesses are found to be positive and dynamic environments. Nearly all respondents had little difficulty in retaining workers and all stated that the working environment was based on 'friendship and trust'.Thus small firms not only contribute to the quantitative expansion of employment but also significantly improve the qualitative nature of the workplace. Finally, while government assistance in the form of direct financial assistance, has not been significant in these findings, it is argued that the role of government policy is critical in the role and success of small enterprises in the economy.