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economy; its contribution was about 46% of non-agricultural Gross Value Added in 2008 (ILO, 2013).
Rural poverty is a major problem in India, as 80% of rural population and 64% urban population were considered as calorie poor as of 2005. Qualitative surveys conducted also conclude that most Indian rural dwellers see themselves as poor (World Bank, 2011). Migration is the major cause of urbanisation in India as people from the countryside move to the major cities in search of a better life (Misra and Alam, 2014). The 2011 population census showed that, 31% of Indians live in urban areas. This urbanisation figure was below the global figure of 54%. However, India’s urbanisation rate is estimated to reach 814 million people by 2050. Although India is fast becoming urban, the rural population will also grow substantially to about 804 persons by 2050 (Bhagat, 2014).
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unemployed in high income countries due to industrial restructuring or changes in production technology.
Table 4.1 Characteristics of survival and growth-oriented enterprises
Survival entrepreneurs Growth oriented entrepreneurs Driven by necessity, trade on streets,
community of the poor, business for subsistence reasons, micro enterprises
Opportunity driven, intermediate sector microenterprises
Ease of entry, Capital requirements are low, Low skills and technology requirements
Some barriers to entry, high capital requirements, intermediate skills and technology requirements
Female majority Male majority
Diversification strategy to supplement family income, run by idle labour
Risk taking and specialisation
Rooted in family networks with the obligation to share income generated
Rooted in business networks with the capacity to accrue portions of income generated
Adapted from; Berner, Gomez and Knorringa, (2012)
Owing to the receipt of unemployment benefits, many unemployed persons in high income countries are not forced to engage in entrepreneurial activities. For instance in the EU, of total entrepreneurial activities, necessity entrepreneurship constitutes less than 1% (Acs et al., 2004).
In low and middle income countries, like Ghana, the lack of employment opportunities and social protection drives individuals into entrepreneurial activities.
Slum activities form part of necessity entrepreneurship. As slums house migrants and urban poor who cannot gain employment into the formal sector, the inhabitants engage in informal activities as a form of survival. Economic activities in slums, constitute the vibrant informal sector in many countries; for instance in Bangladesh’s capital Dhaka, slums contribute 8% of the city’s GDP as
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of 2014 (Hye, 2014). Mahony (2010), is of the view that, slum areas worldwide earn large amounts of income. Economic activities in slums can range from petty trading to running private schools.
Chege and Mwisukha’s (2013) study in the Kibera slum in Kenya, concluded that, slum tourism represents a vibrant income generation sector. The slum is a tourist destination and the major tourist attraction there is taking photographs and getting informed about residents’ problems. Slum tourism is economically beneficial to the residents of Kibera as it creates employment for the slum dwellers. Slum tourism is also a vibrant sector in the Dharavi (India) slum which houses about half a million Indians. Tours in the slum were undertaken by 3,150 tourists in 2008, 5,370 in 2009 and 7,000 in 2010. The Dharavi slum houses about 10,000 small scale industries which together generate about US$ 665 million in annual turnover according to Meschkank, (2011).
A survey of 500 slum households in the Khurda District of India by Das and Meher (2013) found out that, most of the slum dwellers are engaged in several economic activities including simple manufacturing, hawking, truck pushing, scrap dealing and head porting. The operators engage in these activities in order to purchase goods and services as well as acquire wealth with a view to fulfilling some wants and needs on commercial or self-reliance basis, and to enhance their quality of life. Das and Meher’s study further revealed that, the slum operators can only access loans from informal sources, as it was difficult for households to meet formal paper needs and collateral security obligations insisted by banks and other formal lending institutions.
Jha, Rao and Woolcock (2007), after surveying 800 households from slums in Delhi, concluded that Indian slums are extremely productive. The Dharavi slum has become one of the largest leather producers in the world and as a result, people are becoming much more aware that a lot of sound economic activities take place in slums. Slums are not just places where only poor people live;
some more financially sound residents prefer living in the slums because they are less expensive and closer to their workplaces. One area of Delhi is described by the researchers as a "five-star slum," since it has running water, electricity, and other amenities (Jha, Rao and Woolcock, 2007).
Studies in Ghana also reveal that, informal activities in slums generate income. A study conducted by King and Amponsah (2012) in 3 slums in Ghana (Old Fadama and Amui Dzor in Accra and
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Akwatia Line in Kumasi) revealed the following as the economic activities taking place there:
scrap metal works, communal bathhouses, local restaurants, provision stores, hair salons, dressmakers, saw mills, grinding mills, electrical and electronic shops, schools, groundnut paste production, blacksmithing, baking, sale of sachet water, auto-mechanics, entertainment centres, head porters. King (2010) also found out that, economic activities going on in most slums of Ghana include metal scrap dealers, food production and processing, private schools and carpentry.
Employment levels in Ghanaian slums are very high. King and Amponsah (2012) further discovered that the employment level in the three slums surveyed were as high as 98% with the average daily income of GH¢5.3 (equivalent to US$3.7 in 2012) per day. This is far higher than the World Bank’s poverty line of US$2 a day. This information shows that most slums in Ghana are highly productive and have economic value. Research into slum activities in Ghana, however, has not looked at the factors that motivate operators to engage in slum activities, what determines their incomes, what constrains their growth and their resource needs to graduate into formal sector activities. The current study aims to fill in the knowledge gap.