Reinventing Cities: How Small Business Drives Urban Renewal

REINVENTING THE CITY:
THE ROLE OF SMALL SCALE ENTERPRISE
Asia Branch
Dean Pallen
2001

April 2001
Catalogue No.: E94-310/2001
ISBN: 0-662-65663-6
Printed in Canada
The information contained in this document does not necessarily reflect the policies of the
Canadian International Development Agency.

TABLE OF CONTENTS
Acronyms
Executive Summary
1.0 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Place of Small Scale Enterprise in a New Era of Urban Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 A Changing Development Context and the Rational for this Document . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Regarding the Content of this Publication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Chapter Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.0 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 The ‘Survival Economics’ of Urban SSEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 The Home as a Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Community Space as a Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Transportation and Urban SSEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.5 The Blurring Distinction Between Urban and Rural Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.6 The SSE Sector and Housing Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.7 Local Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.8 Environmental Impacts of SSEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.8.1 HBEs and the Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.8.2 Local Government and the Environmental Standards of SSEs . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.8.3 The Environment and SSE Recycling Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.8.4 Environmental Problems in Peri-Urban Zones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.8.5 The Safety of the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.9 The SSE Paradox . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.10 Summary of Key Points . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.0 Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.1 The Participation of Entrepreneurs and Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.2 The Participation of Women . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.3 The Importance of Starting Small . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.4 Improvisation, Innovation and Imitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.4.1 Improvisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.4.2 Imitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.4.3 Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Chapter One Introduction
Chapter Two Working in the City
Chapter Three
Facilitating Innovation and Opportunity — The Environment
and Entrepreneurship in Cities

TABLE OF CONTENTS (cont’d)
3.5 Promoting More Responsive Municipal Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.6 Informal Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.7 NGO Involvement in the SSE Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.8 Land Tenure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.9 Enterprise Incubation and Extension Programmes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.10 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.0 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.1 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.2 Facilitating Sustainable Home Based Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.3 Supporting SSE Outside the Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.4 Selective Greening in Support of SSE Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.5 An Ideal Community Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.0 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
5.1 Occupational Health and Safety Standards for SSEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
5.2 From Waste to Green Pastures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.3 Clustering and Common Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.4 A New Look at Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.5 Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
5.6 Appropriate Environmental Management Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5.7 Eco-Industrial Parks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
5.8 New Environmental Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
6.0 In Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Bibliography
Chapter Four Redesigning Communities
Chapter Five Improving the Environmental Performance of SSEs
Chapter Six Conclusion

Acronyms
ADB Asian Development Bank
CIDA Canadian International Development Agency
CMCH Centre for Minimum Cost Housing, McGill University
EA Environmental assessment
EIP Eco-industrial park
GNP Gross National Product
HBE Home based enterprise
HUDCO Housing and Urban Development Corporation
IADB Inter-American Development Bank
ILO International Labour Organization
LME Large and medium size enterprise
NGO Non-governmental organization
NMV Non-motorized vehicle
OHS Occupational Health and Safety
PRA Participatory Rural Appraisal
SSE Small scale enterprise
UNDP United Nations Development Programme
UNEP United Nations Environment Programme
UNICEF United Nations Children’s Fund
UNIDO United Nations Industrial Development Organization
WHO World Health Organization
WISE Work Improvements in Small Enterprises

Executive Summary
An important characteristic of the urban environment in developing countries is the level of small scale economic activity that
takes place. Small scale enterprise (SSE) is an important fact of economic and social life in these cities. SSEs operate in a variety
of permanent and non-permanent settings, from the home (HBEs) to small scale factories. They are great sources of economic
ingenuity, and are creating employment for a growing percentage of urban populations. The varied economic opportunities
offered by the largely unregulated SSE sector are a critical weapon in the struggle against poverty, particularly for women.
Another important characteristic of SSEs within the urban and peri-urban environment is their potential to contribute to poor
environmental standards. It is the proverbial vicious circle, with many SSEs operating with poor technology in substandard
conditions, while receiving few services from municipal governments to help counter the negative environmental impacts of their
productive activities. As a result, SSE environmental standards have become a source of tension between local authorities and
entrepreneurs.
This document looks at these two governing characteristics of economic life in cities in developing countries, making a case for
the role of SSEs within urban development plans and strategies, showing both the positive and negative aspects of HBEs and
SSEs, illustrating what is already being done to improve environmental standards, and explaining what more could be
accomplished.
Issues that are explored in some detail include spatial considerations related to HBEs and SSEs, appropriate transportation
services and energy sources, occupational health and safety issues, convergence of urban and rural SSE activities, selective
greening of cities to mitigate polluting elements, sector clustering to combine services, the relationship between SSEs and other
types of industry, environmental management, and the role of local governments and development practitioners.
This document presents its case for the role and potential of SSEs through the use of numerous examples, demonstrating what
needs to be done in terms of improving the performance and standards of this sector, and what is already being done in
communities around the world. The essential message is that SSEs, if properly supported, can improve the environmental and
living standards of cities. These flexible and creative sources of employment are clearly meeting a need and should not be
excluded from new urban planning strategies.

1.0 Background
Increasing concern is being expressed over the state of
urban centres in developing countries. National and local
governments, community groups and aid agencies are
searching for answers to mounting problems related to
the environmental and living standards of cities. Cities are
in peril as a result of high levels of pollution, decaying
infrastructure and transportation systems, and housing
shortages. The physical environment of cities, and the
economic and social opportunities offered by cities, are all
being compromised. In cities of all sizes, places of work,
play and socializing — and indeed places of beauty — are
being negatively reshaped by urban decay.
Although cities remain engines of economic growth,
ingenuity and employment for an increasing percentage of
the world's population, they create what are considered
by many as the most harsh and brutal living conditions
known to humankind. The degradation of the physical
urban environment is helping to entrench long-standing
economic and social inequities. A growing percentage of
the burgeoning population of urban centres is poor, and it
is this sector of the population, more than any other, that
is carrying the burden related to the problems of urban
decay.
In many respects urban centres throughout the Southern
hemisphere are in dire need of retooling and
regeneration. This is certainly true in terms of:
• how infrastructure is maintained and services de-
livered;
• where and how people are housed;
• how buildings and neighbourhoods are designed; and,
• how roads and transportation systems are planned
and maintained.
It is imperative that new ways are found to reinforce and
reorganize responsibility and capacity to address this
situation.
1.1 The Place of Small Scale Enterprise in
a New Era of Urban Planning
Over the last decade, a variety of new urban initiatives
have been launched by international, national and
community-based organizations in an effort to find ways
to solve mounting urban problems. This recent activity, as
well as insight provided by new theoretical approaches to
urban planning and urban environmental management
(UEM), are creating a much broader and more in-depth
knowledge and base of expertise. This is a first step to
forging new practices that are more flexible, localized,
democratic, sensible and responsive to the needs of the
poor, than those promoted in the past.
Yet, in a context where the assumptions guiding urban
planning are changing, it is important to re-examine all
fabrics of the urban milieu to see where solutions to
problems can be found. It is therefore appropriate to
consider a more prominent role for small scale enterprise
as a conduit for regenerating urban centres.
Small scale enterprise (SSE), for the purpose of this
document, encompasses both micro and small scale
enterprise activity. The definition is broad enough to cover
both productive and service-oriented enterprises of less
than 50 employees, which operate in a variety of settings
from the home to small factories.
A large percentage of SSEs thrive in the informal sectors
of urban economies. The characteristics of informal
enterprises can include: operating with lower overhead
costs and marginal capital investment; the absence of
formal regulation and tax systems; and, possibly, a non-
permanent worksite location. In addition to the informal
sector, there are a significant number of SSEs operating as
part of the formal economy that are registered, pay taxes,
and operate from established locations.
The combination of informal and formal SSEs represents
the most important economic component of the urban
economy. As the main entry point for entrepreneurial
activity, SSEs create more employment than any other
Reinventing the City: The Role of Small Scale Enterprise
1
Chapter One Introduction

sector of the urban economy. National governments and
donor agencies have recognized this fact by increasing
their support for small scale enterprise activity through
micro finance programmes and other innovative vehicles
such as incubator programmes.
In addition to creating employment, the SSE sector is
valued as a source of ingenuity and vitality, which in turn
influences urban communities beyond the realm of
economics. With the exception of housing, the ‘where’,
‘how’ and ‘why’ of SSE activity constitute the most
important factors in determining how urban space and
resources are used. It is therefore reasonable that the SSE
sector plays a greater role in new approaches to urban
planning.
In the area of environmental practices, many SSEs show
great resourcefulness in minimizing waste and in recycling.
Small operating budgets have made it necessary for
entrepreneurs to find ways to make ends meet, and this
invariably means making the best use of resources and
limited space. Moreover, most urban centres in the
developing world have active SSE sectors that provide
services in the areas of waste collection and recycling. In
some cities, the informal sector outperforms municipal
governments in waste collection. [Ali and Ali: 1993]
Yet, not all is environmental perfection with SSEs. In fact,
there are a vast array of environmental problems
associated with urban SSEs. There are far too many SSEs
in a variety of sectors — from tanning and electroplating
to artisanal activity — that can be the source of significant
negative environmental impacts on local communities.
The diversity, changing nature and growing number of
urban SSEs create an enormous array of environmental
challenges, both in terms of understanding and choosing
appropriate remedial methods.
Most often SSEs operate in surroundings characterized by
inadequate housing, transportation, water and sanitation
infrastructure, and health facilities. Cluttered streets, alleys,
commercial parks and inappropriate building space —
such as individual homes — often become makeshift
workplaces that can create unsafe conditions for workers,
family members and the broader community. It is within
the context of the precarious existence of SSEs that
solutions to environmental problems must be found.
Given the social and economic importance of SSEs, the
emphasis must be on introducing corrective measures to
reduce negative environmental impacts, and to ensure
that SSEs are at the centre of strategies which address
broader problems impacting on the urban environment.
Urban SSEs operate in an environment that can
experience rapid change through the adaptation of new
ideas and technologies. This dynamic provides a great
opportunity to create more sustainable patterns of
economic activity that can impact upon both the
entrepreneurial milieu and other aspects of urban life.
Finally, it is important to stress that making a stronger link
between the environment and SSE activity is not solely
about environmental standards. Efforts in this area should
be a part of a larger agenda to alleviate poverty, by
increasing and diversifying economic opportunities, and by
improving infrastructure, workplace and housing
standards. It is the intention of this document to
demonstrate how this is possible.
1.2 A Changing Development Context
and the Rational for this Document
Reinventing the City: The Role of Small Scale Enterprise is
designed to outline the conditions and factors that allow
small scale enterprise to play a larger role in improving the
living and environmental standards of cities. The
document highlights ideas, innovations and practices that
are realistic from a technical, economic, political and social
standpoint. A broad variety of options are presented on
how to incorporate small scale enterprise into schemes to
improve the physical environment of cities and eliminate
related conditions contributing to poverty. An important
theme of Reinventing the City is presenting solutions to the
environmental problems created by SSEs.
It would have been useful in developing this publication if
a vast array of information and project experience had
been available. This, however, was not the case.
Nevertheless, an extensive effort has been made to
collect and present as many key case studies as possible.
This document benefits greatly from the knowledge and
insight emanating from related spheres of activity, where
refinements and the emergence of new approaches are
creating new options for working with entrepreneurs,
workers, community groups and governments.
2

In the economic sphere, a great deal of knowledge and
experience has been accumulated in recent years on how
to assist SSEs. Micro finance, the practice of providing
small loans to individuals and community groups, has
opened up new possibilities for assisting the poor in
initiating and enhancing economic activities for their own
benefit. In addition, experiences with business incubator
programmes and related business services have shown
how cost effective instruments can be used to create new
enterprises, protect struggling ones, and introduce
technological change.
The renewed interest in participatory development, due
largely to the emergence of Participatory Rural Appraisal
(PRA), is setting new standards for development projects.
This emphasis on participation, combined with more
fundamental attempts to make governments more
democratic, accountable and responsive, has created the
possibility of tapping into previously under utilized sources
of collective and individual knowledge and skills.
Improvements in technology in a wide variety of areas,
such as renewable energy and the transportation sector,
are creating other possibilities. Yet the most important
development related to technology has been the shift in
thinking, from placing emphasis on the technology itself, to
understanding how technologies can be more successfully
integrated into the activities of family, community and the
workplace.
Although not traditionally focused on the SSE sector, the
field of occupational health and safety (OHS) offers great
insight on how changes can be made in the workplace to
improve safety standards and protect the environment,
while improving economic performance. Pilot activities,
undertaken by organizations such as the ILO, have
demonstrated an enormous potential to work with SSEs
to improve OHS standards.
Also, donor agencies such as CIDA are placing a greater
emphasis on developing practical tools and modifying
established practices for a more sustainable impact (e.g.,
environmental assessment to ensure that small scale
development activity is properly managed from an
environmental standpoint). The collective result of these
experiences is that much more is known about how to
work with individuals, communities, entrepreneurs and
local government to facilitate change.
1.3 Regarding the Content of this
Publication
It is important to underline a few key points concerning
this document. For reasons of expediency and focus,
Reinventing the City does not examine the role played by
SSEs in recycling and waste management. This subject is
relatively well documented and analyzed in a number of
publications [see Fernandez: 1997, Haan et al.: 1998 and
Furedy: 1990b]. Although much can be learned from the
experience of SSEs in this field, other topics and issues
need to be addressed to provide a more comprehensive
overview of the interrelationship between the urban
environment and SSEs, and the possibilities to promote
change. Nor will the use of command and control
legislation to police the activities of SSEs be explored.
Many would argue that the focus of this document should
be on the applicability of environmental measures,
regulations and controls. However, in the context of the
largely unregulated urban economic process in which SSEs
operate and flourish, it could be argued that the emphasis
should be on working with the possibilities provided by
this very situation. Despite a few notable exceptions, the
experience to date with regulation and enforcement of
SSEs has been overwhelmingly negative. Until local
governments are in a position to ensure adherence to
environmental standards in a judicious and effective
manner, the emphasis should be on working more
collaboratively, and finding other means to put pressure on
SSEs to adhere to better environmental practices.
1.4 Chapter Outline
In addition to introductory and concluding sections, this
document is organized into four main content chapters:
Chapter 2: Working in the City
To better understand the SSE sector, this chapter presents
information on statistics and trends regarding the place of
SSEs in the urban economy. The SSE sector is examined
in relation to housing and transportation practices and
standards, trends, spatial arrangements, and local
government resources and capacity. The chapter
concludes with an examination of the environmental
impact of SSEs in terms of resource utilization, and the
sector's contribution to pollution, overcrowding and the
faltering infrastructure of cities.
3

Chapter 3: Facilitating Innovation and Opportunity —
The Environment and Entrepreneurship in
Cities
This chapter provides an overview of the conditions and
development practices which could contribute to
ensuring that the ideas and suggestions presented in
subsequent chapters are properly implemented. The
chapter examines the inherent attributes of cities and the
urban entrepreneurial milieu conducive to facilitating
change, and the potential role of local government,
communities and entrepreneurs.
Chapter 4: Redesigning Communities
This chapter explores different ideas and approaches on
the spatial layout of communities, the housing and
transportation sectors, in relation to the improved
environmental integration of SSEs.
Chapter 5: Improving the Environmental Performance
of SSEs
This chapter focuses on the workplace and workers, and
ideas related to making urban SSE manufacturing activity
cleaner and safer. Topics covered include occupational
health and safety practices, energy use, sector clustering to
provide common services, and industrial eco-parks.
Each content chapter concludes with a summary of the
key points.
1.5 Terminology
Throughout this document, the terms ‘urban centre’ and
‘city’ will be used interchangeably. Other interchangeable
terms will include ‘slum’, ‘informal settlement’ and ‘low
income community’.
4

2.0 Introduction
The very apparent pollution, squalidness, poverty and
breakdown of services found in cities in developing
countries can easily shape negative sentiments about what
it must mean to live and work in such conditions. Cities
in developing countries can be awful places because of
these problems, but this does not tell the whole story.
They are also highly animated, full of life and vigour. Much
of the credit for this goes to the SSEs filling the streets,
alleys, markets, parks and buildings. A late evening traveller
to Dhaka, Lahore, or other South Asian cities, is struck by
the noise and vivacity of the commercial activity
emanating from the streets and other SSE workplaces.
On market day in countless African cities, the limits of the
transportation system and infrastructure are quickly
tested as the volume of commerce swells.
The resonating character of these cities is not the creation
of city managers and planners. As will be demonstrated
in this chapter, established planning grids and
neighbourhood designs have largely been ignored by
people to permit a more interactive and practical
relationship between the home, common space and
entrepreneurial pursuits. As such, SSEs tell us a great deal
about how urban centres could be designed differently.
Clearly, small scale entrepreneurial activity is not the only
factor that comes to define what cities are, but for a large
percentage of the urban population it is a major element.
This chapter attempts to provide insight into the
environmental, cultural, social, political and economic
dynamics shaping the character and extent of small
enterprise in cities. To help set the stage, the chapter
begins with a brief examination of some findings and
reflections related to the economic importance of urban
SSEs.
2.1 The ‘Survival Economics’ of Urban
SSEs
Below are a series of summary statistics and observations
regarding urban SSEs. They provide an interesting, if
occasionally contradictory, portrayal of the sector. Certain
of the points raised here will be elaborated upon in
subsequent sections of this document:
• Most enterprises categorized as urban SSEs are very
small. In a study of African SSEs, the majority were
classified as one-person operations. [Mead and
Liedholm: 1998, 62] Yet some SSEs can employ large
numbers of workers. Informal waste collection and
recycling operations are good examples of this.
• A large percentage of SSEs are home based
enterprises.
• The percentage of the urban population finding work
in the SSE sector is growing. The Asian Development
Bank (ADB) reports that three-quarters of all new
jobs in South Asian mega-cites are created by the
informal sector. [ADB: 1999, 38] A World Health
Organization (WHO) study found that 45%–95% of
the workforce in developing countries can be found
in small factories and related industries. [reported in
McCann: 1996]
• Although the majority of urban SSEs are engaged in
non-productive activity, there is a significant minority
involved in productive activity best described as
industrial.
• "In most countries the majority of (SSEs) are owned
and operated by women. Furthermore, since working
proprietors are the single largest category of the
labour force, the majority of workers are women."
[Mead and Liedholm: 1998, 64]
• Studies indicate substantial differences in economic
efficiency by enterprise size. In particular, the "returns
per hour of labour are significantly higher for
enterprises with 2-5 workers, compared to those
with one person working alone. This increase in
economic efficiency continues for the next higher size
group, those with 6-9 workers; thereafter, the results
are more ambiguous."
• "(SSEs) are in a constant state of flux. During any
given period, new firms are being created (new starts,
or enterprise births) while others are closing; at the
5
Chapter Two Working in the City

same time, some existing firms are expanding and
others are contracting in size. Since these individual
components of change can move in opposite
directions, figures on net change mask the magnitude
of the churning that takes place."
• The overall contribution of SSEs to Lao's Gross
National Product (GNP) is between 6-9%. [Daniels:
1999, 55] In a nationwide survey of Kenya, urban
SSEs were found to provide 50% of family income;
18% of SSEs provided all the household income.
[Daniels: 1999, 59] "One-third of all working persons
are employed in SSEs and the sector contributes 13%
to Kenya's Gross Domestic Product." [Daniels: 1999,
63] In Guatemala, it is estimated that the urban
informal economy accounts for 34% of the country's
GNP. In 1960, the informal sector accounted for only
5% of Guatemala's GNP.
[Villelabeitia: 2000]
• A study of informal enterprises in Nigeria
demonstrated that informal enterprises rarely have
written down conditions of work or fixed working
hours. [Faphounda: 1985, 79] Informal enterprises
have variable hours of operation, usually running for
about 11.5 hours every day. Only 4.4% of the
enterprises operated for exactly eight hours a day,
and about 7% operated for less than eight hours.
Even though the enterprises had long operating
hours, they usually worked for one stretch at a time,
rather than in shifts.
[Faphounda: 1985, 81]
• Most SSEs operate at low, often obsolete levels of
technology. However, even in the most advantaged
enterprises, progress can be made in technological
capacity.
[see King: 1996 and McCormick: 1998]
• In India, SSEs "produce crude, low price final products,
which are sold to consumers either directly or
through distribution channels. These firms are
sometimes found to compete with larger firms that
exist in the same industry segment, but which
produce differentiated products, that incorporate
special design features that make it stand out."
[Vachini: 1991, 26]
• Clustering, whereby a large number of enterprises
from the same or related sectors locate in the same
area, is an important phenomenon of the SSE sector.
Clustering occurs for a number of economic reasons
to allow SSEs to achieve economies of scale,and share
technology and labour. Clustering can take many
different forms. Clustering in Asia and Latin America
can be more sophisticated than that typically found in
Africa. [McCormick: 1998] For example, clusters in
Latin America and Asia have been known to become
important centres in the manufacturing of a wide
variety of goods (i.e., from footwear to medical
inputs). [McCormick: 1998, 11] While in Africa,
clusters can consist of thousands of micro enterprises
operating at a very basic technological level.
[McCormick: 1998, 11]
• There can be considerable economic interaction
between SSEs and medium and large scale
enterprises — e.g., SSEs are often relied on to
provide small implements in the production of larger
goods.
• Cultural, social and family considerations can be as
important as economic factors in determining the
location, size and number of SSEs working on or in a
particular street or dwelling. Co-operation and
mutual support can be found within enterprises that
normally one would perceive to be in competition
with one another.
[see Gough: 2000 and Benjamin: 1991]
The contribution of SSEs to the urban economy is
significant and growing. Although statistics vary, the
tendency is towards estimating a high percentage of the
population finding work in SSEs — somewhere between
one-half to three-quarters of the urban workforce. The
major problem in undertaking statistical work on SSEs is
studying enterprises that mostly operate in a clandestine
manner outside the formal economy.
Yet, the most important point to retain regarding urban
SSEs is their role in combating poverty. By supplementing
incomes and creating singular employment opportunities,
SSEs are in many ways a last line of defence against certain
poverty, especially for women. The availability of flexible
6

SSE opportunities is of tantamount importance for
women who must also contend with demanding domestic
responsibilities that tend to limit economic options.
2.2 The Home as a Workplace
Home based enterprises (HBEs) are the best example of
the economic convenience afforded by the SSE sector.
The concept of combining living and working space has
been around a long time, including in Europe where it was
very common up until the Renaissance period. This
arrangement served more than economic purposes,
contributing greatly to medieval society by making the
"medieval family a very open unit." [Schoenauer: 1992,
228] Lewis Mumford, one of the earliest critics of modern
urban life, described the European medieval home as
follows:
The medieval family included, as part of the normal
household, not only relatives by blood but a group of
industrial workers as well as domestics whose
relation was that of secondary members of the
family. This held for all classes ... for young men from
the upper classes who got their knowledge of the
world by serving as waiting men in a noble family;
what they observed and overheard at meal-time
was part of their education. Apprentices, and
sometimes journeymen, lived as members of the
master craftsman's family. If marriage was perhaps
deferred longer for men than today, the advantages
of home life were not entirely lacking even for the
bachelor.
[Mumford: 1961, 281]
The separation of the household from the workplace had
a profound and lasting impact on the future evolution of
cities in European countries. In developing countries, the
practice of integrating home and entrepreneurial pursuits
has been kept alive for both economic and social reasons.
It particularly thrives in places where strict rules about
land use are not enforced.
[Medina: 1997]
The home doubling as a workplace reduces costs. It
affords parents, mostly mothers, the opportunity to stay
close to and care for their children. Gough notes that "in
almost all low income settlements in (developing)
countries, people in HBEs can be seen cooking, sewing,
selling drinks and food, keeping animals, mending and
making shoes, manufacturing various goods, cutting hair,
giving injections, and renting rooms." [Gough: 1996, 95] In
the rapidly growing low income settlement of Madina
Ghana, located on the outskirts of Accra, two-thirds of all
dwellings have at least one HBE. [Gough: 2000] A study
of informal settlements in Port- au-Prince, Haiti,
determined that home based entrepreneurship was so
far-reaching that housing units were treated as places of
production. [Fass: 1977 quoted in Tripple: 1993] In
developing countries, HBEs can be found in middle-class
dwellings, especially in countries experiencing an
economic downturn.
[Olufemi: 2000]
A study of HBEs in a‘Bustee’ (Bengali for slum) community
in Calcutta describes the character of HBEs and how they
come to influence a neighbourhood's character:
• In the bustee, almost all of the homes located near
the main or secondary roads have some kind of small
business activity within their domestic space.
• Some households with interior locations are involved
in (productive) oriented activities like raakhi making,
bidi making, tailoring, agrabatti rolling, etc.. These
activities do not require formal shops for their
distribution.
• A number of shops (home based) selling the same
product can be sustained by high demand. Only
special services shops, such as metal repairs, can be
located away from main roads.
• Given the use of domestic space for HBE activity,
common spaces are shared by families for cooking,
washing and drying clothes, relaxing, playing and
sometimes eating. Thus a very close interrelationship
develops between houses and their spatial
surroundings. Spaces for domestic and income
generating activities exist and interact to the mutual
benefit of the bustee dwellers.
• Bustee dwellers sacrifice ‘living’ quality to a great
extent to accommodate their income earning activity,
since this is important to their survival. Prime space
is given over for income generation. The lack of
proper space forces them to adjust to the existing
conditions as best as possible, often involving
sacrifices in other daily living activities.
7

[Ghosh: 1994, 77-79]
Similar to Ghosh's findings, a study in Aba, Nigeria,
determined that "usable space takes precedent over
aesthetics and permanence, and both housing and
environmental quality in terms of construction standards
are of little significance, compared with employment."
[Nwankama: 1993] The drawing in Figure 2.2.1 is an
overview of the Gorcha bustee community in Calcutta,
India, which is the focus of Ghosh's study. Figures 2.2.2
and 2.2.3 are ‘section through’ drawings of two home
based entrepreneurs in Gorcha that established
enterprises in extensions of their homes.
Box 2.1 is an extract from a study of HBEs of a very
different kind, found in the Viswas Nager settlement of
East Delhi. Benjamin uses the term ‘neighbourhood-as-
factory’ to describe the entrepreneurial activity of HBEs
there. [Benjamin: 1991] The experience of Viswas Nager
is significant because it broadens significantly the
perception of what constitutes HBEs, and the role they
can play in building communities. InViswar Nager, a strong,
well organized SSE sector, led by HBEs, worked with local
officials to improve conditions in terms of infrastructure
8
Box 2.1 The Home Based Factories of East Delhi
In the East Delhi colony ofViswas Nager, the outward image is of a typical Delhi settlement in various stages of construction —
endlessly reproducing themselves through additions or subdivisions, and hectic movement of people and vehicles along the inner
streets. But these impressions are misleading. Inside the ‘houses’, generally in basements and on ground floors, are factories
reminiscent of the Industrial Revolution. Machines whir in the dim and often dusty light, their operators supervised carefully by
foremen.The cycle rickshaws that must be dodged in the streets are not only transporting people, but also raw copper stock
and semi-finished copper wire among hundreds of small (home based) factories.
The production system of Viswas Nager has developed into a neighbourhood-as-factory — a network of small firms located in
the same area, which both compete and co-operate with each other. There is the pervasive smell of new brickwork and the
noise of machinery in front room shops. Their productivity stimulates the markets and creates job, which leads to even greater
production levels and continues a cycle of successful economic growth.
To observers, its seems impossible that sophisticated manufacturing takes place in such a rudimentary environment. As of 1991,
up to 80% of the city's manufacturing was taking place in such neighbourhood factories. Industries support each other in East
Delhi. Copper wire and cable manufacturing industries depend on secondary manufacturing such as plastic recycling and cycle
rickshaw fabrication.
Although all modes of transportation are used, the cycle-rickshaw is the key. Typically, cycle-rickshaws are hailed from the street
as needed, but some entrepreneurs maintain their own fleet. The differentiated transport system is well suited to the diverse
conditions of the roads within the settlement. While heavy vehicles are efficient for transporting goods on high quality roads,
only cycle-rickshaws and animal driven carts are capable of traversing the narrow, unpaved and flood prone roads located in
sections of the settlement.
By 1991, the colony had a workforce, political strength, a diversified property market and a number of local money lending
associations. Viswas Nager is an example of difficult but successful co-operation between common people and institutions. The
efficiency of the colony's development by increments is a lesson for those who believe that massive public or private
interventions in land and industrial development are necessary for economic progress.
[Benjamin: 1991,4-100]

9
Figures 2.2.1. 2.2.2, 2.2.3
Overview of
Gorcha Bustee
in Calcutta
India
[Ghosh, 94]
Section through of two home-based enterprises in Gorcha Bustee [Ghosh, 94]

and sanitation.
2.3 Community Space as a Workplace
The first layer of outdoor SSEs are HBEs adjacent to
homes such as in figure 2.3.1 and 2.3.2. Nwankama notes
that in communities such as Aba, Nigeria, where HBEs
flourish, the physical distinction between the interior and
exterior of the home is artificial, influenced primarily by
"climate, the scale and organization of the outdoor space,
and the nature of work and size of the enterprise."
[Nwankama: 1993, 128]
HBEs attached to and surrounding dwellings are part of a
larger network of SSEs, operating in a diverse range of
10
Figure 2.2.4
Section through of another home-based enterprise and location in Gorcha Bustee. [Ghosh, 94]

outdoor locations and conditions. Some outdoor SSEs
operate with permits from established buildings and
locations in the same way small enterprises operate in
Canada.Yet most do not. Although mostly service oriented,
there can be very large, outdoor SSEs involved in heavy
industrial activity. [Pallen: 1997b] Depending on the degree
of by-law enforcement,any open or free space is a potential
workplace — i.e., alleys, streets, sidewalks, railway lines,
parks, intersections, markets, industrial parks and rooftops.
A study by McGill University’s Centre for Minimum Cost
Housing (CMCH) of two slums in Indore, India,
documented the diverse and complex variations of spatial
requirements needed by an equally diverse assortment of
outdoor work activities: "They varied from as small as 2
square metres, in the case of paper bracelets, to as much
as 36 square metres for the repair and refurbishment of
wooden crates. Some of the activities needed shelter,
others did not. Most required not only a work space, but
also a space for storing either raw materials or finished
products, or both."
[Rybczynski et al.: 1984, 21]
11
Figure 2.3.1
In Aba Nigeria, carpenter and
his apprentice use space at side
of house as a work space. The
workplace is highly visible to
passerbys. [Nwankama, 1993]

12
Figure 2.3.2
A beedi seller (Indian cigarette) sets up a stall along side a house in Gorcha Bustee
in Calcutta, India. [Ghosh, 94]

13
Figure 2.3.3
In Aba Nigeria, an overhead view
of two small shops, a breakfast
joint and used clothes store
alongside a work place. The work
place is used for bicycle repairs.
[Nwankama, 93]

There is also the phenomena of mobility: "There are
mobile shops — carts and moveable kiosks — that are
operated by hawkers and peddlers. The distinction
between mobile and fixed shops can be blurred, since
frequently the first stage of establishing a permanent shop
is simply to park a pushcart in one location, and eventually
to upgrade it into a semi-permanent structure."
Figures 2.3.3, 2.3.4, 2.3.5 and 2.3.6 are drawings from Aba,
Nigeria, demonstrating the variety of uses and shapes of
outdoor SSE space in that city.
To the outsider, the locations occupied by outdoor SSEs
can appear overcrowded and chaotic. The impression is
that nothing has been planned. However, this is most
often far from the truth. In fact, there is usually an innate
logic behind where and how enterprises are located. Post
describes the situation of SSEs operating in the town
centre of Kassala, Sudan, as follows:
An intricate network of interdependency relations has
developed, requiring that members of the same
professional group work at the same place (for
example, butchers, leather manufacturers, gold and
silversmiths, etc.). Tailors use the arcades in front of
fabric shops; retail grain sellers working the street are
near to their wholesale colleagues (where supply trucks
unload); soft drink and fruit juice sellers occupy sites
near the bus terminal; and craftsman are ideally situated
for direct contact with the consumer ... Street traders in
14
Figure 2.3.4
Space between a road and railroad is used for block-making in Aba Nigeria.
[Nwankama, 93]

particular rely on large streams of passers-by and
depend on small and frequent orders with suppliers. The
importance of mutual proximity has even increased over
the last few years due to the chronic shortage of all sorts
of commodities, making personal contacts and swift
communication vital in order to secure essential supplies.
[Post: 1996, 37]
The type of entrepreneurial networks and clusters
described by Post can be found in various shapes
throughout Africa, Asia and Latin America. From
neighbourhood to neighbourhood and street to street,
SSEs respond to the needs of local residents. At the same
time, cultural and family traditions can also intertwine with
economic factors to influence the shape and character of
streets and neighbourhoods [see Bishop and Kellet: 2000].
15
Figure 2.3.5
A wider street in Aba Nigeria is used for metal work and for auto repairs. [Nwankama, 93]

16
Figure 2.3.6
Small shops are built behind the railroad at a street intersection where tires, candies, gin and soft
drinks are sold. Places are also available for hair braiding and a food vendor. [Nwankama, 93]

17
It is also not uncommon to find a number of women
selling the same goods and services in streets, shops or
homes, in close proximity to one another. This type of
pattern may have more to do with mutual co-operation
and self-support, as opposed to the, by and large,
economic motivation behind clustering. Moreover, with
the absence of such public buildings as community
centres, and in some cases schools and religious buildings,
the premises of SSEs such as tea houses can serve a social
function, by providing people with public meeting spaces.
Figure 2.3.7
Scene of the daily market in the main passageway of the Gorcha Bustee in Calcutta, India. [Ghosh, 94]

The patterns and arrangements of outdoor SSEs have
developed slowly over time and Post appeals to urban
planners to be more appreciative of these ‘self chosen
locations’: "Although chosen under sometimes severe
economic, cultural and physical constraints, they
nevertheless demonstrate the rational of differing
settlement choices. Knowledge of the spatial logic of
survival is essential to the formulation and implementation
of any proactive planning on behalf of small enterprises."
[Post: 1996, 39]
2.4 Transportation and Urban SSEs
Although most entrepreneurs in the SSE sector would
prefer to own a motorized vehicle, the reality is that very
few do, or ever will. A variety of transportation modes are
available to SSEs, yet most rely on non-motorized vehicles
(NMVs). NMVs, such as those found in Figures 2.4.1 and
2.4.2, play an important part in the economic world of
SSEs and, indeed, in the overall economies of developing
countries. In Viswas Nager [see Box 2:1], a survey of
18
Figure 2.4.1
NMVs in Asia.
[World Bank, 1995, 9]

entrepreneurs revealed that a major reason for their
economic success was the availability and suitability of low
cost cycle-rickshaw transportation.
[Benjamin: 1991, 41]
As the World Bank points out, NMVs such as bicycles,
cycle-rickshaws, animal carts, push and pull carts, are "non
polluting, low cost mobility powered by renewable energy
sources that are well suited for short trips in most cities."
[World Bank: 1995, xii] In some cities and communities,
NMVs can provide the most mobility. In Yogyakarta,
Indonesia, almost 10% of the population live along the
Code River, where access between houses or access
outside the settlement to surrounding communities is
possible only by internal footpaths and narrow streets. In
other words, there is no access into and throughYogyakrta
by car.
[Nareswari: 2000, 3]
19
Figure 2.4.2
NMVs in Asia.
[World Bank, 1995, 8]

SSEs, like all enterprises, rely on existing transportation
systems to move goods, provide services, and facilitate
other economic activity. Yet today, neglected trans-
portation networks are being refitted to facilitate the
movement of commuters in automobiles, thereby adding
to the problems of congestion and pollution. At the same
time, more realistic and pragmatic approaches to urban
transportation, which consider the needs of all users, are
ignored.
[see UNDP: 1992]
The World Bank [1995, 1] undertook a study of ten major
Asian cities and identified the following trends that impact
negatively on the use of NMVs:
1. Increased motorization (including the increased use
of motorcycles) and a consequent reduction in the
street space available for safe NMV use.
2. Exclusion of NMV needs in urban transport
planning and investment programmes, resulting in
inadequate facilities for NMVs.
3. General trend toward modernization of Asia cities,
which promotes attitudes that NMVs are backward.
4. Tendency to believe that NMVs are the cause of
urban traffic congestion.
5. Increased trip lengths caused by changes in
metropolitan spatial structure.
The World Bank adds:
In many Asian cities there is an apparent bias against
NMVs. Hanoi, Dhaka and Metro Manila are a few
of the cities that have as official policy the reduction
or elimination of NMVs because of perceived impact
on congestion and safety, as well as the ‘degrading
nature of the work required of the operator’ ... the
consequence of anti-NMV biases is unbalanced
transport planning, which results in accommodating
the needs of motorists at the expense of NMV
operators and users. Such unbalanced planning can
actually lead to a deterioration of traffic conditions for
both motorized vehicles and NMVs.
[World Bank: 1995, 59-60]
In Jakarta during the 1980s, roughly 20,000 cycle-rickshaws
were tossed into Jakarta Bay and another 30,000
confiscated by city officials in a effort to eliminate
‘backward technology’. [Gardner: 1998, 16] In some
countries, such as Vietnam, municipal policies have actually
contributed to a reduction in bicycle use. [Gardner: 1998,
16] Recently, the municipality of Rawalpindi, one of
Pakistan's largest cities, banned NMVs in the old town
centre, where the streets are narrow and well suited to
such vehicles.
Such attempts to reduce NMV use seem more
preposterous when one considers that the overall use of
NMVs in Asia is actually growing. [World Bank: 1995]
Not only are NMVs more economical, they are also more
practical in most circumstances. Bicycles trips, for
example, compare favourably with cars for urban trips of
about 2 kilometres. "In Beijing, bicycles are faster than the
bus or subway for trips up to 6 kilometres and remain
competitive with public transportation for journeys of up
to 10 kilometres." [Gardner: 1998, 18] Subsequent
chapters will discuss the efforts of certain municipalities to
capitalize on these inherent advantages to improve and
increase the use of NMVs.
Another aspect of NMVs that is not well known is the
significant amount of small scale entrepreneurial activity
that exists in support of NMVs. NMVs are "labour
intensive modes of transport that rely extensively on the
use of local technologies and skills." [World Bank: 1995,
xii] The World Bank describes the importance of the
NMV sector in Asia urban economies, as follows:
The cycle-rickshaw industry in Dhaka — including
drivers, repair persons, owners, mechanics in assembly
shops, and retailers in components shops — directly
provide 23 percent of the city's employment.
Similarly, approximately 20 percent of the jobs in
Kanpur, India are in the NMV sector, which includes
all employment related to bicycles, rickshaws, animal
carts and handcrafts. To the extent that motorize
vehicles replace NMVs in these cities local economies
will drastically change with consequent dislocation
effects. Nevertheless, the inventory of Asian cities
conducted for this recent study found that local
governments often underestimate the economic
impact of the NMV sector.
[World Bank: 1995, 57]
NMVs would seem to be as natural an ally as local
planners could hope to have in creating employment for
vulnerable groups, providing affordable and accessible
20

21
... Auto rickshaws number over 3 million, and are
among the largest contributors to poor quality urban
air. They provide passenger as well as goods
transportation and account for a large percentage of
the traffic on roadways. Many of these vehicles are
up to 30 years old and still use leaded gasoline due
to the absence of strict emission regulations and the
owners limited finances. The majority of the vehicles
are poorly maintained and do not employ exhaust
treatment devises. Also, used oils are often added to
agricultural producers while urban dwellers are thought to
engage in industry and services is increasingly misleading."
[Tacoli: 1998a, 3] She goes on to add:
The growing evidence of the scale of and nature of
urban agriculture and of rural non agricultural
enterprises and employment suggests that these
distinctions are over simplified descriptions of both
rural and urban livelihoods. The urbanization of rural
economies and employment structures is also often
transportation, and in reducing pollution and the
overcrowding of cities. The relatively soft clanking of
bicycles, trailers and carts would seem to be a perfect
antidote to overheated and noisy cities.
Two stroke engine auto-rickshaws, scooters and motor
cycles are also very popular in Asia, and probably create a
considerable amount of employment in the SSE sector
through repairs and other services. Yet unlike NMVs, auto-
rickshaws and other small scale motorized vehicles are
notorious polluters. The EnvironmentalTechnology Centre
of Environment Canada describes the state of auto-
rickshaws in Asia as follows:
the gasoline at higher than the manufacturers’
recommendation. The result is higher exhaust
emission rates.
[Environment Canada: 1997, 3]
2.5 The Blurring Distinction Between
Urban and Rural Entrepreneurship
Small scale entrepreneurial activity is a key dynamic in one
of the most significant changes taking place in developing
countries — the eroding distinction between urban and
rural life. AsTacoli points out, the assumption of a sectoral
divide, whereby "rural populations are seen primarily as
The Ferozepur Road in Pakistan. Redefining rural work.

most evident in the areas immediately around or well
connected to the urban areas.
[Tacoli: 1998a, 3]
This new reality is best observed in the growing peri-
urban zones surrounding urban centres. In city outskirts,
there can exist a conglomeration of entrepreneurial
activity encompassing industry, agriculture and service
activity. Increasingly, rural and peri-urban entrepreneurs
are operating closer to urban centres to have better
access to clients and reduce transportation costs.
[Werna: 1997, 392] In Pakistan, the 50 kilometre long
Ferozepur Road that joins Pakistan's second largest city
Lahore with the ancient city of Kashur is a case in point.
From Lahore, on both sides of the Ferozepur Road,
entrepreneurial activity dominated by the SSE sector
stretches for well over 15 kilometres. Agricultural activity
is still very apparent from the road. [Pallen: 1999] It is not
unthinkable that one day entrepreneurial activity along the
Ferozepur Road will extend from Lahore to Kasur.
In rural Bangladesh, agricultural revenue remains the main
source of income. However, the percentage coming from
non-farming activity is increasing dramatically. It has been
estimated that by 2005, over 62% of the rural population
of Bangladesh will find work in non-farming activities.
[World Bank: 1997, 18] Moreover, increasingly the ranks
of the peri-urban work force is made up of rural workers
commuting to peri-urban areas on a daily basis. [World
Bank: 1997, 18] In strictly rural areas, there are significant
changes taking place in local economies:
Manufacturing in permanent establishments
(manufacturing outside the household, often with the
help of hired workers), excluding handlooms, is
dominated by traditional food processing, textiles and
basic metals, accounting for 85 percent of
employment and 78 percent of value added ... The
sector has, nonetheless diversified considerably over
the 1980s. The list of the top 15 industries by
employment has changed considerably towards a
clear urban and peri-urban tilt, both with regard to
market orientation as well as enterprise location, and
non traditional small industries have experienced
rapid growth.
[World Bank: 1997, 56]
Similarly in cities, the practice of urban agriculture, defined
as "the production of food and non-food through
cultivation of plants, tree crops, aquaculture, and animal
husbandry, within urban and peri-urban areas", is on the
rise. [Lindayati: 1996, 3] Urban agriculture is undertaken
to generate income and food for personal consumption.
Backyards, front yards, planters, rooftops, abandoned
buildings, community lands, roadsides and other open
spaces are all potential spots for urban agriculture. In the
1980s, 60% of Greater Bangkok was used for urban
agriculture. [Mougeot: 1993] As a general rule, urban
agriculture finds creative uses for unserviceable pieces of
land, space and water. [Mougeot: 1993] Urban agriculture
is drawing the attention of international organizations,
such as the International Development Research Centre
(IDRC) of Canada, who are trying to promote and
improve upon present urban agricultural practices.
Eventually, changing urban and rural circumstances are
going to force development practitioners to rethink long-
standing approaches to development and, in particular, the
centre piece of development activity, employment
creation. New ways will have to be found to better
integrate industrial and agricultural activity.
2.6 The SSE Sector and Housing
Standards
A housing crisis exists in cities throughout the developing
world, in terms of both availability and quality, and
attempts to provide basic shelter for the poor have
produced mixed results. One problem identified by
McGill University’s CMCH, relating to SSEs, is that
planners and government officials have never understood
that there is "nothing basic about basic housing."
[Rybczynski et al.: 1984, 1] In the past, the decision making
process in housing construction has been too heavily in
favour of finding economic efficiencies in the site layout
through optimizing plot ratios and widths and
construction material.
This approach leaves little room to consider issues of
culture, family complexities and home based
entrepreneurship. The solution, according to the CMCH,
is a new set of settlement standards. "These standards
should seek to accommodate, rather than to reorganize.
They should reflect the (sometimes harsh) reality of the
urban poor, and they should respond to their special
needs, not to an idealized set of criteria."
22

The system of housing championed by the CMCH is
based on housing patterns found in informal settlements,
where houses are routinely built or reconfigured
according to family size, cultural values and the need to
accommodate home based work. As Rybcznski points
out, rather than viewing informal settlements as a
problem, more attention must be payed to understanding
their good qualities in terms of how they respond to the
needs of people:
Informal Housing .... represents a solution rather than
a problem. It is moreover, a solution that appears to
deny conventional planning orthodoxy. The priorities of
the slum dweller are frequently not those of the
municipal authorities. Space takes precedence over
permanence. A porch may be built before a bathroom;
a workplace may be more important than a private
bedroom. The apparent inversion of values is especially
evident in the public spaces. Whereas planned sites
and services projects usually incorporate rudimentary,
minimal circulation spaces, the public areas or slums
are characterized by richness and diversity.
[Rybcznski et al.: 1984, 1]
Similar to the small enterprise sector that supports NMVs,
networks of informal builders and renovators serve the
informal housing market. Informal builders are highly
responsive to the building needs of the poor, and as a
result represent a very large share of the new housing
built in developing countries in terms of numbers and
value. [ILO: 1995] Although SSE services in the housing
sector may be more responsive, it is not clear what quality
of services are being provided. Carr-Harris, for example,
believes there are major issues that need to be addressed
in terms of health and safety standards, especially related
to building materials:
As poor people generally build their own homes without
any government subsidies, they are (often) forced to
use expensive and hazardous materials. During visits
to four or five squatter areas in Delhi, it was noted that
asbestos was a material commonly used for roofing,
when it is known to have a carcinogenic effect. Several
homes have brick walls with black polythene that is
believed to be associated with the high incidence of
coughs, colds, pneumonia and tuberculosis as polythene
forms are inadequate cover against the cold and damp.
Yet other homes had tin roofs which are inappropriate
for indoor cooking. These findings have been
corroborated by other studies of Delhi's urban poor.
[Carr-Harris: 30]
2.7 Local Government
This report cites a number of examples of national and
local governments attempting to understand and improve
the circumstances under which SSEs operate. However,
normally the relationship between SSEs and government
authorities is not healthy. SSEs face the same challenges as
everyone in terms of local governments not delivering
badly needed services. As a result, there is a general
indifference towards governments and what they have to
offer, which manifests itself in a number of ways. In
Pakistan, for example, government officials claim that in a
country of 150 million people, only 1.2 million pay taxes.
[Bearak: 2000]
Also, SSEs must often operate under inappropriate
regulations and by-laws that are administered and
enforced in an uneven manner. Local authorities, who are
unsure of how to deal with what appears to be chaos,
disorder and defiance by SSEs, can end up taking steps that
lead to unfortunate events, such as what occurred in
Mexico City in 1995. In that case, police and hundreds of
informal street vendors clashed violently after a legal
order was issued banning the vendors from the city
centre. The conflict arose, despite years of research and
discussion, between the vendors and authorities regarding
alternative arrangements. [Harrison and Mcvey: 1997]
This type of incident has been re-enacted in countless
other locations in Latin America, Africa and Asia.
23

SSEs are reluctant to pay taxes because local governments
do not provide SSEs with infrastructure or services.
Moreover, rarely will small scale entrepreneurs take the
time to register their enterprises. But even if an
entrepreneur wanted to be formally recognized, there is
usually little to be gained, except possibly a lot of red tape.
Box 2.2 summarizes the famous study by Hernando de
Soto on the obstacles faced by informal enterprises
wanting to be legally registered as a small industry.
2.8 Environmental Impacts of SSEs
There is no denying that unwanted environmental impacts
are occurring as a result of urban SSE activity. In some
cases, the consequences can be quite significant in local
communities. The main negative environmental impacts of
urban SSEs are seen as follows:
1. Contribution to the congestion and overcrowding of
cities. The manner in which SSEs occupy public
spaces can be disruptive. Similarly, with shelter
functioning as much as production units as homes,
there are conflicts and undesirable compromises
about how space is used.
2. Poor occupational health and safety (OHS) standards
put the health and safety of workers, entrepreneurs,
family members and the community at risk.
3. The inefficient use of resources, resulting in pollution
and the absence of pollution mitigating technologies.
4. Indiscriminate use of hazardous substances, such as
chemicals, dyes and disinfectants, in a wide range of
unregulated industries.
5. A wide variety of SSE activities for which little is
understood about their environmental impacts.
6. In peri-urban areas, expanding small scale industrial
activity is absorbing farmland. Activities such as
brickmaking and small scale mining are playing havoc
with local ecosystems.
SSEs may not be large in size but they are numerous, and
given they often locate close to or within communities,
there is great potential to do harm, especially to the poor:
Pollution affects the poor more than the better off as
24
Box 2.2 The Challenge in Becoming Legitimate
The Instituto Libertad y Democracia (ILD) undertook a simulation to measure the costs of access to industry. To do this, ILD
rented the premises of an established factory, installed sewing machines, knitting machines and other implements, and recruited
four university students to undertake the various bureaucratic procedures, under supervision of a lawyer experienced in
administrative law.
In addition to being very widespread in Peru and thus culturally significant, the activity chosen for the simulation was highly
representative of the obstacles faced by small scale entrepreneurs. It required approximately 60% of the bureaucratic
procedures common to all individual activities, and 90% of those required of non-incorporated individuals. The team also
decided to handle all the necessary red tape without go-betweens — as a person of humble origins would do — and to pay
bribes only when, despite fulfilling all the necessary legal requirements, it was the only way to complete the procedure and
continue with the experiment.
The results showed that a person of modest means must spend 289 days on bureaucratic procedures to fulfill the 11
requirements for setting up a small industry. The cost to establish a formal small industry represented the cost of 32 times the
monthly minimum wage at the time.
[De Soto: 1989]

most (SSEs) (polluting or otherwise) are located in low
income areas ... high levels of air pollution associated
with small acid and chemical processing units in North-
east Calcutta were largely ignored by the government of
West Bengal despite protests by the low income
residents. The fact is that most direct victims of pollution
associated with small units are poor or from low income
groups. Their plight attracts little attention as they have
neither the resources nor the time to publicize the
problem.
[Dasgupta: 1997, 291]
In a study of SSEs in Asia, Kent [1991] concluded that
manufacturing SSEs pollute more on a per unit basis than
larger operations. In India alone, small scale industry is
suspected of contributing 60% to 65% of total industrial
pollution. [MSG Environmental Services: 1999, 3] Box 2.3
outlines a number of the SSEs identified in a UNDP study
in Lima (Peru), Harare (Zimbabwe), Bombay (India) and
Leon (India), and the hazardous materials they employ in
the production process.
CIDA-sponsored studies in India [MSG Environmental
Services: 1999] and Bangladesh [Child: 1998] support the
contention that there are a variety of SSEs having
significant negative environmental impacts. The Indian
study identified, among others, the following SSEs and
their main environmental impacts:
Water-related environmental impacts: Starch
production, rice mills, coffee, food processing, agro-
residue, paper mills, textile dyeing and printing, tanneries,
25
Box 2.3 Pollutants and Hazardous Residues from Small Scale Industries in
Developing
Countries
INDUSTRY PROCESS HAZARDOUS RESIDUES
Bricks Chronium, fluoride, sulphur, dioxide
Textile dyeing & finishing Cyanide, dyes, oils, resins, sodium hypochlorite, caustic soda, sodium carbonate
polyphosphates
Canning Alkalis, bleach, solvents, wax
Glass and ceramics Arsenic, barium, manganese, selenium
Dry cleaning Solvents, bleach
Dye formulations Tin, zinc
Metal mechanics & metal finishing Caustic soda, sulphuric acid, iron oxide, zinc, solvents
Metal plating Polyphosphates, cyanide, caustic soda, chromium, zinc, carbonates, detergents
Automotive services & machine shops Burnt oil, oil adsorbents, solvents
Pickling Acid, metal, salts
Battery recovery Lead, cadmium, chromium, copper, nickel, acids, mercury, methanol
Paper recycling Methanol, mercury, titanium, zinc, wax pesticide formulations, zinc, copper,
fluoride, organic phosphorus, phenol
Tanning Chronium, arsenic, sulphates bicarbonates, formaldehyde
Photography Cyanide, silver, phenols, mercury, alkalis

chemicals (including drugs and pharmaceuticals) and
electroplating
Energy and air pollution-related
environmental impacts: Bakeries, clay bricks,
ceramics, glass, foundry, steel re-rolling mills and
refractories
Workplace health and safety problems: Majority
of SSEs, especially chemicals, clay bricks, ceramics, glass,
foundry and plastics
[MSG Environmental Services: 1999, 4]
Small scale brickmaking has an notorious reputation for
being highly polluting. Dirty fuel sources from burning
tires, plastics and debris, and other forms of waste, are not
uncommon [see Blackman: 2000]. Box 2.8.2 looks at the
tannery industry in Kasur, Pakistan, and the attempts of
one NGO to help children and their families face the
often horrific consequences of working in and living close
to small scale tanneries. The case study is significant for a
number of reasons, but most notably for highlighting the
work of one of the few NGOs working in the SSE sector
on environmental issues. This topic will be elaborated
upon in the next chapter.
2.8.1 HBEs and the Environment
Although most HBE activity can be described as
environmentally benign [see Napier et al.: 2000], there can
be HBE activity that is highly problematic from an
environmental and safety standpoint. In Semrang,
Indonesia, there are 41 key HBE economic clusters. Of
those, six clusters — food processors (tapioca crackers,
fermented soybean cake makers), upholstery and metal
household utensil manufacturers, brickmakers and
smoked fish operations — were found to be highly
26
Box 2.5 Work Standards for Home Based Beedi Makers
In India, there are 35 million beedi rollers and 17,000 tobacco processors making hand rolled beedi cigarettes. Although 90%
of the workers are women, the trade is controlled entirely by men. In a study of beedi workers, the homes were found to
be in poor condition, with barely enough space for all family members. The homes were damp, usually full of smoke, and had
open drains outside full of discarded and stinking beedis. Only 50% of the houses had electricity, and the women were obliged
to work using the inadequate light provided by kerosene lamps. [Bezborouah: 1985 quoted in Tipple: 1993, 531] Exposure
to nicotine by beedi workers has been known to cause tobacco poisoning. Exposure to tobacco dust by beedi workers leads
to irritation in the eyes, conjunctivitis, rhinitis and interference of the mucosal surface. Pregnant women have exhibited
abnormal foetal growth.
[Carr-Harris: 13]
polluting. They impact negatively on local water supply
and produce unacceptable levels of waste.
[Untari et al.: 2000]
Auto repair, small scale foundries and other manufacturing
activity are other types of HBEs that can create
environmental hazards. In addition, OHS standards are a
major issue with many sectors of HBE activity [see Singh
and Girish: 2000 and Panda: 2000]. For example, Box 2.5
describes the situation of home based Indian beedi
(cigarette) makers. Electronics and computers, other
potential hazardous sectors, are two areas of growth of
HBE activity in the world. Throughout the world, large
companies are contracting out to home based workers to
circumvent environmental and safety standards.
[Baines: 2000]
Perhaps the most crucial environmental issue facing HBEs
is the issue of the appropriate use of space. Although
family members and neighbours are very tolerant of the
noise and the spatial imposition of HBEs, at some level
transforming bedrooms and living rooms into HBE
operations must compromise the choices one can make,
and in some cases create conflict. Clearly some forms of
HBE are ill suited for the kind of space and conditions that
a home offers. This is especially true for small, poorly
constructed and ventilated dwellings.

27
Box 2.6 Quarrying in Sao Paulo
The small scale mining industry, which surrounds Sao Paulo, Brazil, has a long tradition. With the spread and development of
Sao Paulo, the environmentally problematic mining activity has come under stronger scrutiny. When it came time to act, a
bureaucratic nightmare was discovered. Eighteen government bodies — federal and local — had responsibilities for overseeing
the different aspects of the mining activities in the metropolitan region of Sao Paulo.
Economic and environment authorities responsible for small scale enterprises are separate entities, and co-operation and co-
ordination between the different departments proved to be highly problematic. For example, there was a conflict between
the land use plan for the city put forward by the government of the state of Sao Paulo, and a similar plan put forward by the
municipal government — i.e., a mining site was legal in one plan, but illegal in the other. Furthermore, the environmental
assessment code designed to cover small scale mining is the same as used to measure the environmental impact of large scale
dams and mining productions.
[Werna: 1997, 391-393]
The most contentious issue with home based work is that
it is carried out privately and escapes closer scrutiny. The
field of research in home based entrepreneurship is
growing. Hopefully this will lead to new insights into
understanding and mitigating HBE environmental
problems.
2.8.2 Local Government and the
Environmental Standards of SSEs
At the local level, there can be a complete absence of
policy, legislation, regulation and administrative machinery
regarding the environmental standards of SSEs.
Increasingly, the lack of appropriate environmental
management capacity is becoming a source of conflict
between local governments and SSEs. Unable to respond
to challenging situations, the tendency is for local
governments to react in an impulsive fashion.
The examples of Sao Paulo [Box 2.6] and Delhi [Box 2.7],
although extreme, are indicative of two different areas
where conflicts are arising more frequently. In the Indian
example, the government decision to close down
polluting SSEs ended up having more negative impacts
than could have been foreseen. In 2000, a similar
crackdown on SSEs led to what was described as the
most violent protest in India in recent times. [Statesman
New Service: 2000] Sections of Delhi were closed down
as the protest by workers and entrepreneurs turned into
scattered rioting. Ingenuity and creativity are required to
help municipal authorities develop the skills and resources
necessary to help SSEs master the environmental effects

28
Box. 2.7 Local Indian Government and Polluting SSEs
In Delhi in 1996, small scale industries, employing on average 20 people, were hit by a series of court orders requiring them
to take measures to reduce pollution. The results: 1,328 industries were closed down and ordered to move out of Delhi;
90,000 units were notified for relocation; and, factories in 28 industrial estates were ordered to participate in setting up central
effluent treatment plants (CETP). The Delhi Master Plan recommended the closure and relocation from Delhi of all units using
or producing hazardous and noxious products. The process involved relocation and the purchase of vast tracts of land to move
away from ‘non conforming areas’.
In terms of gains, some reduction in local ambient pollution will have taken place with the closure of these units. Most of the
units dealing in hazardous and toxic raw materials and products were located in very densely populated areas.
On the negative side, estimates are that as many as 125,000 people lost work. Relocating firms had very fixed and negative
views on the relations between industry and environment. None of the relocating firms expect to upgrade or change the
present technology to reduce pollution. Any measures taken will be to expand production or to increase productivity of the
existing technology.
Some firms had to install end of pipe pollution abatement equipment. Consequently, they have come to regard environmental
expenditure as unproductive and unnecessary. Not only are these measures ineffective, as they are operated only for the
benefit of visitors and inspectors, the perception it is generating has serious implications for long term environmental
improvements.
Given the poisoned atmosphere, simple cost effective alternatives were ignored. The majority of the factory owners who have
applied for land for relocation generally operate from leased premises or would like to expand their production. Relocation
thus provides an opportunity to expand production and increase profit based on the same polluting technology.
The outcome of the present policies are reinforcing trends that work against the development of a more environmentally
effective and socially acceptable policy. Relevant conclusions are:
1. It is distracting attention from the main sources of urban pollution.
2. It is dispersing pollution instead of reducing it.
3. It is discouraging SSEs to change to cleaner technology.
4. A consequence of pushing clean-up measures is that none of the firms made the link between economic gains and
environmental improvements. Increase in profitability through improved energy use, better material recovery and
reduction of waste are non issues.
5. It is ignoring social issues in the name of the environment.
6. The judicial orders, while they have created some environmental awareness, have not provided solutions. On the contrary,
they have reinforced trends which could impede and delay the introduction of improved environmental management and
governance practices.
[Dasgupta:1998, 1-12]

of their economic activities. 2.8.3 The Environment and SSE Recycling
Sector
From rag picking to reconditioning appliances, SSEs make
a great contribution to maintaining environmental
standards by finding secondary uses for waste. SSEs are
involved in primary collection, recovery operations,
reclamation, recycling and by-product generation.
29
Battery recycling in old Dhaka
employing women and children.
At right untreated waste from battery
recycling on a slope leading to a water
source.

[Fernandez: 1997] However, there are recycling sectors
where the environmental implications are of great
concern. Battery and plastic recycling are two SSE sectors
that can operate with minimal or no environmental
procedures in place. The example of battery recycling in
India in Box 2.8 provides insight into the possible
environmental risks related to recycling.
Why so many SSEs are engaged in unsafe recycling activity
is of course a matter of economic survival. As Dasgupta
points out: "banning these activities as many
environmentalists wish to, may be environmentally
advantageous but carries enormous social costs."
[Dasgupta: 1997] The answer is to develop appropriate
policies and technologies to deal with the environmental
ills of recycling on a small scale. The work of the
Netherlands-based WASTE is the sort of effort that must
be favoured to ensure better SSE recycling practices.
WASTE promotes pilot projects and research into
recycling activity by urban SSEs and promotes discussion
on the topic through an electronic newsletter. (see:
http://www.waste.nl)
2.8.4 Environmental Problems in Peri-
Urban Zones
The blurring distinctions between urban, peri-urban and
rural is not without problems. As Birley and Lock note,
the peri-urban zone can be viewed as a "mosaic of
30
Box 2.8 Battery Recycling in Calcutta, India
The recycling sector employs thousands of workers, directly and indirectly. In one area of Calcutta alone, there
are reported to be 210 battery breaking and lead smelting units. The used batteries are broken down to extract
the lead plates; this lead is then smelted and made into ingots to be sold to industry. The process of lead smelting
is the primary source of air pollution.
Lead extraction process
The plastic shell of the battery is cracked open and the battery plate removed. The wastes generated at this
stage are diluted sulphuric acid and distilled water. The lead plates are then mixed with charcoal and smelted in
crude furnaces. The furnace is normally a simple brick structure with four vattis (firing pits). Each vatti has a
door through which it is fired. There are no walls separating the four vattis. This means that opening any one
door affects the efficiency of all the others. Furthermore, all four are connected to the same chimney stack. The
lead which separates from the slag is collected and made into ingots. The slag is stored until a substantial amount
has built up. It is then resmelted several times for further extraction.
The very crude methods and the outdated technology used give rise to pollution at several points in the process:
• There is a high level of noise when the batteries are broken up.
• Sulphuric acid is released when batteries are broken up; this finds its way into drains and the surrounding areas,
leading to land and water contamination.
• Sulphur dioxide and carbon monoxide are released during the smelting process.
• Lead oxide forms a major part of the suspended particles released and the fine dust is easily carried by the
wind.
• Inefficient use of the furnace results in excessive smoke and pressure in the chimney stack, forcing some of the
smoke back into the workplace.
• Seepage from the slag stored for resmelting contaminates land and water.
[Dasgupta: 1997, 293-4]

different land uses inhabited by communities of different
economic status, in a state of rapid change with a lack of
infrastructure and a deteriorating environment." [Birley
and Lock: 1998, 89] Moreover, there is a growing conflict
over land use priorities. Agricultural land is being converted
to industrial and residential purposes, and long-standing
economic practices that were once out of sight are now
very visible and close to residential areas.
For example, the following situation involving quarries in
Sao Paulo, Brazil is very common in many developing
countries where small scale mining and brickmaking
permeates the outskirts of urban centres:
In Sao Paulo at the beginning of the century, many
quarries were situated in the rural periphery of the city;
but as Sao Paulo grew, they were progressively
surrounded by the urban fabric. Now the quarries are
totally within the urbanized area, many of them within
the core of the metropolis. As a result, there is growing
conflict with local residents and government authorities ....
Urban quarrying for building materials (can have
significant environmental implications) as the mining of
aggregates such as sand and clay has been responsible
for polluting streams, the loss of organic soil, large holes
in the ground, visual pollution, residual coal and conflicts
about the use of land.
[Werna: 1997, 291- 392]
In peri-urban areas, waste is an enormous problem. One
solution would be to find secondary uses for both
agricultural and industrial wastes. This is already happening
in some peri-urban areas where waste water is being
treated in fish farming systems. In the meantime, the
agriculture being practised is often dependent on high
levels and unsafe use of chemicals. This includes small scale
farmers selling to the urban market. There is a high risk and
evidence that industrial contaminants such as heavy metals
are seeping into food production.
[Birley and Lock: 1998]
The transformation of the economies of peri-urban zones
carries strong implications for the well-being of workers
and their families. Work patterns are evolving, as are the
frequency and types of diseases. The overall impact,
according to Birley and Lock [1998], is a decrease in health
standards.
2.8.5 The Safety of the Workplace
31
Untreated waste water flowing beside the Ferozepur Road in Pakistan.

32
From peri-urban zones to the heart of the city, one
constant environmental challenge for SSEs is the safety of
the workplace. Increasingly, more and more is being
learned about OHS standards in SSEs. There is no clear
idea about how many people are injured or killed as result
of poor OHS standards. Carr-Harris feels the number
who die in work-related accidents is quite high, citing India
as an example: "If one extrapolates evidence from various
spot studies and population statistics, it is clear that the
number of people killed due to occupational injuries
would be in the region of 150,000 per year, almost 100
times the official statistic." [Carr-Harris: 33] Carr-Harris
also feels that accidents are much higher within the SSE
sector than any other sector. She provides the following
Box 2.8.2 The CIDA-Supported Tannery Children Centre of Kasur
Kasur, with a population of roughly 300,000, is the main tannery centre in Pakistan and recognized as the worst polluter. There
are roughly 200 tanneries, about 100 of which operate as part of the informal economy. Many of these informal tanneries
operate from homes where women and children are involved with the potentially hazardous process of sheep hair handling.
Over 50,000 people are employed in the tanneries, operating within the urban fringe in three main clusters.
The tanneries have degraded the environmental conditions surrounding Kasur, posing major health hazards to the residents. The
effluent discharged by these tanneries, with its high chemical and biological pollution load and no drainage, has rendered a big
stretch of fertile land into lakes of stagnant wastewater. A nauseating smell permeates the air and the city's inhabitants suffer
from eye diseases, skin irritations and gastrointestinal maladies. Lung cancer has also been diagnosed as the cause of death in
some cases. A significant percentage of all medical visits in Kasur are related to health problems caused by the tanneries.
The Lahore-based
NGO, SUDHAAR,
estimates that 1,600
children between
the ages of 6-14 are
working in three
clusters. SUDHAAR
was taken aback by
the lack of concern
shown by inhabitants
for occupational
health standards and
the need for pro-
tection against the
harmful chemicals
used in the tannery
industry.
SUDHAAR established the Tannery Children Centre. SUDHAAR began by encouraging children to join the centre to pursue
primary education. Tanners, supervisors and parents were encouraged to send children and younger, non-working children to
the centre. Since opening, enrolment has tripled to over 180 children, with a staff of four teachers and two community
motivators.
Other than providing education and recreational opportunities, SUDHAAR has held workshops on occupational safety and
health hazards. The staff counsels the children on problems faced at home, the workplace and in the streets. At the demand
of mothers, a basic health programme for children and their families has been set up. A small credit programme has started to
explore the possibility of support to create economic alternatives.
The success of theTannery Children Centre has inspired three additional centres, supported by different agencies, in other parts
of Kasur. Over 600 working children and non-working children are enrolled at these centres.
[Khan and Khan: 1998 / Morishita and ur Rahman: 1999]

33
three examples of SSEs from India that are of particular
concern:
1. Food Processing
In Bombay, 51% of the women involved in fish processing
were found to be suffering from fatigue, backache, pain in
the legs and chest congestion. Skin infections, caused by
the bacteria from fish, were also common.
2. Soap Stone, Khadi and Cane/Bamboo Industries
There are more than 40 stone grinding units located on
the outskirts of Udaipur city. Two hundred workers in five
randomly selected units were subjected to a health
examination. It was found that more than 20% suffered
from respiratory diseases, and more than 6% were
coughing up tuberculosis bacilli sputum during
examinations.
3. Leather Processing in India
A high incidence of tuberculosis and other respiratory
aliments has been associated with the dust and fumes
emitted during leather processing. Contact with sulphide,
chlorine dioxide lime and hydrogen sulphide in tanneries
has led to cases of acute toxic poisoning.
[Carr-Harris: 14-15]
Lowenson claims that SSEs face the same workplace OHS
challenges as larger enterprises in terms of physical (noise,
heat, dust, electrical), chemical (pesticides, solvents, acids,
resins, etc.), mechanical (cutting, grinding and other tools,
vehicles), ergonomic (poor working platforms and
positions) and biological (such as animal borne disease), as
well as problems related to the organization of the work.
[Lowenson: 1995, 2] What differentiates SSEs from larger
enterprises are the often brutal conditions surrounding
the workplace, including inadequate water and sanitation
services. According to Lowenson, the factors undermining
SSE health and safety standards are the following:
... low levels of capital, use of primitive tools and
techniques and a tendency to innovate or take shortcuts
in production that, while necessary for economic survival,
may pose serious hazards to the worker; poor working
conditions, poorly regulated by labour or health and
safety laws and poorly monitored by unions, employers’
organizations and the state, as workers, such as those
working for their families are not always under formal
contracts of employment. These problems are
particularly acute in the categories of labour common in
informal and small scale enterprises, such as child,
casual, family and female labour; the majority of
smallholders and a large portion of informal sector
workers are female, while many small rural and urban
enterprise also employ children ...
[Lowenson: 1995, 2]
One of the better documented examples of poor SSE
OHS standards is the artisanal sector. A survey of
occupational illnesses found in traditional crafts in
developing countries included: lead poisoning in potters
and their families in Mexico and Barbados; lead poisoning
in families in Sri Lanka recovering gold and silver from
jeweller's waste, using a molten lead procedure; silicosis
and other respiratory diseases in agate workers in India;
asthma from carving ivory from elephant tusks in Africa;
and, respiratory and ergonomic problems among carpet
weavers in India.
[McCann: 1996, 126]
Another disturbing trend identified in the same study is
the use of modern chemicals and processes by artisanal
entrepreneurs. "As many as 93 cases of peripheral
neuropathy from the use of hexane based adhesives in
sandal making in Japan; paralysis in 44 apprentice shoe
makers in Morocco due to glues containing tri-orthocresyl
phosphate; lead poisoning in lead battery repair workers
and their families in Jamaica: and leg, arm and back pain
and other occupational health problems in home based,
ready made garment workers in India." [McCann: 1996,
126] At great risk are children and other family members
who are inadvertently exposed to safety risks, especially
with HBEs. There are, for example, reports of family
members being exposed to hazardous materials brought
home on the clothes of workers.
[McCann: 1996, 126]
SSE workers, entrepreneurs and their family members
usually do not have adequate health care or health
insurance. They rely more on self-help, traditional health
sectors and primary health care services, where
knowledge and the resources to cope with OHS
problems are poor — i.e., basic capacity to attend to
injuries and make the appropriate diagnosis of more
serious industrial related illnesses.

34
2.9 The SSE Paradox
The inherent difficulty that comes with urban small scale
entrepreneurial activity is that what makes it important
from an economic and social standpoint is also what
creates environmental and health risks. The flexibility,
mobility and the absence of laws and regulation may keep
mothers closer to children and overhead cost to a
minimum, but as has been demonstrated, working in this
fashion can carry enormous safety and health risks. The
fragmentation and lack of formal organization also make it
difficult to provide assistance in areas where there is a
definitive need.
Yet it remains important to distinguish between real
environmental problems and mere nuisance factors. SSE
entrepreneurs, workers and everyone living in close
proximity to SSEs seem to have a much higher tolerance
of some of the impositions brought on by SSEs [see, for
example, Gough: 2000]. Care must be taken to identify
those issues that people, entrepreneurs and workers truly
perceive to be problems.

Reinventing Cities: How Small Business Drives Urban Renewal

Reinventing Cities: How Small Business Drives Urban Renewal

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