Educational Research and Essays Vol. 1(2), pp. 21 - 26, April 2012
Available online at http://www.wudpeckerresearchjournals.org/ERE
2012 Wudpecker Research Journals
Full Length Research Paper
Employment growth and challenges in small and micro
enterprises Woldiya, North East Amhara region,
Minilek Kefale1* and K. P. M Chinnan2
Bahir Dar University, Ethiopia.
Haramaya University, Ethiopia.
Accepted 14 February, 2012
Due to the increasing unemployment problem, Ethiopia is moving forward to combat unemployment by
injecting small and micro enterprises. The objective of this study is, therefore, to assess the
employment growth across years and bottlenecks in the expansion of small and micro enterprises.
Primary data were collected using interview schedule and focus group discussion with 140 enterprise
owners that were selected randomly from the enterprises. Data were analyzed using descriptive
statistics and compound annual growth rate. The compound annual growth rate of small and micro
enterprises in employment aggregately were 3.86% and the enterprises add annually 0.18 workers on
average. When looking separately, the mean annual compound growth rate of small scale and micro
enterprises were 2.4 and 4% on average respectively. Small enterprises add 0.19 workers per firm and
micro enterprises add 0.14 workers per firm annually. Shortage of working capital and working space
are the most important problems. It was recommended that employment growth in small and micro
enterprises were low and emphasis should be given for enterprises to create more jobs rather than
promoting to have large number of one man stood enterprises.
Key words: Compound annual growth rate, employment, small, micro.
Small and micro enterprises
There are different ways of defining the term small and
micro enterprises in different countries. The base for
defining is deepened on the number of employees hired,
the capital invested and...