SUSTAINABLE PARTNERSHIP FOR THE GROWTH OF
THE INFORMAL SECTOR ON
MICRO ENTERPRISE DEVELOPMENT THROUGH
MICROBIZ INCUBATION CENTERS
As a national line agency, the Department of Labor and Employment is traditionally viewed as a regulatory body mandated to enforce labor standards and occupational safety and health. However, in a larger scope, it is imbued with a developmental mandate that extends assistance to the different sectors of our society ranging from rural workers, women, working youth, persons with disabilities, child laborers to informal sector workers.
By working with our partners and stakeholders and through the delivery of our multifarious programs and services, we have broadened our networking and linkages. Convergence as an important factor has been fuelled through sharing of resources for a common purpose, creation of innovative programs for good governance and introduction of synergy practices. As a result, we have established and strengthened the Public Employment Service Offices through the unwavering support of the local government units. We have also created community enterprises in our poverty-free zones through our accredited co-partners. Lastly, we have continued to promote and maintain industrial peace in the region through the Tripartite Industrial Peace Councils.
In a rapidly globalizing world, we are indeed faced with development challenges with particular emphasis on employment creation and sustainable enterprise development.. Thus, we have an integral role to play in fostering a supportive enabling environment for the informal sector workers characterized by the following:
a. provision of enterprise-specific interventions to help boost the capacity for wealth creation, productive employment and decent work.
b. provision of social protection for the informal sector workers
c. convergence of human, financial and natural resources to ensure that those who are engaged in the activities of the enterprise have appropriate skills, capacities and life-long possibilities.
Nearly half of the country’s employed consist of the informal sector workers. According to the Bureau of Working Conditions, vendors, home workers, self-employed agricultural, rural or operating as small business with not more than ten workers and other informal sector workers were estimated to comprise about 49% or 15.5 million of the labor force. This glaring fact is a call for us to protect these workers from hazards and loss of income and sustain their capability to contribute to our economic growth. It has been said that high levels of income inequality weaken the poverty reduction impact of a given growth rate and can undermine political stability and social cohesion needed for sustainable growth.
Uplifting the plight of the informal sector workers is an opportunity to exercise meaningfully our social responsibility and provide social safety nets. Also, it will serve as our springboard for upgrading the skills, productivity and living standards of the informal sector workers. Development expert Goran Hyden tags the informal sector as an “economy of affection” because of its proximity to family, community and neighborhood, pro-poor, labor intensive and environment-friendly in nature.
The informal sector workers are considered as “economic units operating outside the scope of legal and social protection because they are normally not registered and with very low levels of income and productivity.” They are very flexible and potentially productive. They need very low investment requirement per capita to generate jobs. We bump into them and interact with them almost daily without realizing that they are from the informal sector operating outside the realm of law but are contributing hugely to the economy. Thus, there are greater incentives on the flexibility, adaptability and innovation that only informal sector and small scale industries can provide.
Various government and non-government livelihood and entrepreneurship programs aimed at empowering the informal sector have failed to recognize the need for an institutionalized structure at the local government level that would serve as the delivery mechanism for all services needed by the informal sector to start up, nurture and expand their economic production units. We have to see to it that the informal sector workers are motivated, skilled and committed to produce safe and affordable products and services thereby generating income and investment and creating decent job. The contributions that the informal sector will have on enterprise development will pave way to enhanced productivity and economic growth. Entrepreneurship and enterprise are believed to be” vital stimulants that bring about change and progress by ensuring that economies remain dynamic, innovative and competitive.”
III. PROGRAM DESCRIPTION
The project is a powerful way of empowering the informal sector through sustainable partnership with financing institutions, LGUs, academe, government and non-government organizations and business sector and establishment of the MICROBIZ INCUBATION CENTER in the local government units.
The MICROBIZ INCUBATION CENTER will serve as a facility for the informal sector workers to avail of training services, business mentoring and advisory, referral for micro-credit assistance, social protection and marketing linkages. Its establishment and operation will help ensure the sustainability of enterprise development for the informal sector in the region. There is a need to adopt an integrated approach to sustainable enterprise development like investing in human resources, broadening of social/support networks and institutions, and provision of financial and physical infrastructure and services.
As an indispensable partner in this project, the local government units will take charge of putting up incubation centers with the following requirements:
• 10 ft. x 10 ft. air conditioned space
• Internet connected computer
• Resource finder
• Business-related books, journals, manuals & magazines
• TV and DVD system for film showing
• Business mentors from the Local Chamber
• At least two (2) LGU staff, and the PESO Manager, capable of providing training services on:
1. Business management and production skills
3. Business advisory
4. Marketing strategies
5. Confidence building
6. Other trainings needed by the informal sector
IV. PROGRAM COMPONENTS
- Advocacy and Partnership Building
• Forging of MOAs with LGUs, financial institutions, business community, academe and other partners
• Conduct of orientation/briefing on the Microbiz Program
- Establishment and Operation of Micro Business Incubation Centers
• A counterpart of the participating LGUs to the program which will serve as a facility for business mentoring, research, and training for the Informal Sector workers
• To be managed by the PESO Managers
- Provision of Micro-credit, Technical & Marketing Assistance
• Credit window in partnership with conduits banks,
• Marketing assistance from DTI and livelihood skills training from TESDA and its accredited tech voc schools.
- Provision of Capability Building/Enhancement Trainings
• Business and production management training, productivity enhancement and other trainings needed by the informal sector workers through our partner institutions.
- Documentation, Monitoring and Evaluation
• Replication of best practices
• Project steering and innovation