Role and need for small-scale industries
Manpower. The small-scale industries tend to use low skills available and have high employment potential in the short run. They in addition mobilize and promote artisan skills.
Raw materials. Small-scale units are appropriate for the scattered mineral deposits and agricultural potential which cannot sustain the visible large plants e.g clay, sugarcane.
Entrepreneurship. Small-scale production stimulates local entreprenuerial abilities.
Small-scale production greatly induces local savings and investments.
Capacity. Small-scale production is more likely to operate and produce output and full capacity utilization.
Land. Small-scale processing plants use more land than any other production e.g in the agricultural sector.
Gestation. Smallscale plants tend to have short gestation periods than largescale plants.
Infrastructure. Smallscale plants utilize the water, electricity and roads available at low cost.
Capital and skills. Smallscale plants are less reliant on foreign exchange supply for repair and replacement of spares, fuel, raw materials unlike large scale plants which are usually set as a joint venture with foreign partners.
Smallscale plants are flexible in location and hence reduce the rate of rural urban migration.
Smallscale industries speed up the process of industrialization.
The industries tend to use and supply basic necessities.
The increase and distribute people's incomes.
Technical advantage. Smallscale labour intensive processing plants need low maintenance costs per unit of output.
Inventories. Smallscale manufacturing plants require less stock in relationship to the output produced, the working capital is low, the wages are relatively reduced and can use commercial labour.
- Finance. They require reduced capital intensity, capital expenditure and other financial requirements.
- They help in increasing the country's GDP.
They raise the tax revenue of the country.
In conclusion
therefore, smallscale industries work at optimum in terms of labour, capital
and other resource utilization. They have a geographical dispersion of development
as they exist in rural semi-urban and urban areas.