Experts: Small Business Spurs Third World Growth

Two specialists in economic development told a Kennedy School audience last night that small enterprise plays an important role in economic development both in China and Africa.

"Small enterprises have been playing an important role in economic development in Southeast Asia," said Xu Chi He, Director of the Institute of National Economy in the Peoples' Republic of China.

Xu and industrial economist William F. Steel addressed the Eighth Annual World Development Conference, a two day symposium at the Kennedy School discussing the role of small scale enterprise in development. Seminars on development today will follow last night's speech.

In China, small enterprise has played an important role not only in the modernization of agriculture and the absorption of surplus labor in the countryside, but in the growth of economic structure in rural China, Xu said. He predicted this growth will continue in the future.

"By the year 1990, 100 million persons will have been accomodated by small enterprise," he said.

However, small enterprise has not only played a role in economic development in China, but in the developing countries of Africa as well, Steel, an executive at the World Bank, said.

"Improving income opportunities for the lower ranges of income is tied to the development of smaller firms," said Steel, referring to the role smaller enterprises play in providing employment for poorer Africans.

Steel also cited smaller enterprises for their more efficient use of resources and for their role in fostering entrepreneurship in developing African nations.

"The development of entrepreneurship is a key ingredient to future development," said Steel.