Micro-family-owned business : transitory survival mechanism or long term wealth creator?

Principal Topic: Entrepreneurship is key to employment, innovation and growth (Acs & Mueller, 2008), and as such, has been the subject of tremendous research in both the economic and management literatures since Solow (1957), Schumpeter (1934, 1943), and Penrose (1959). The presence of entrepreneurs in the economy is a key factor in the success or failure of countries to grow (Audretsch and Thurik, 2001; Dejardin, 2001). Further studies focus on the conditions of existence of entrepreneurship, influential factors invoked are historical, cultural, social, institutional, or purely economic (North, 1997; Thurik 1996 & 1999). Of particular interest, beyond the reasons behind the existence of entrepreneurship, are entrepreneurial survival and good ''performance'' factors. Using cross-country firm data analysis, La Porta & Schleifer (2008) confirm that informal micro-businesses provide on average half of all economic activity in developing countries. They find that these are utterly unproductive compared to formal firms, and conclude that the informal sector serves as a social security net ''keep[ing] millions of people alive, but disappearing over time'' (abstract). Robison (1986), Hill (1996, 1997) posit that the Indonesian government under Suharto always pointed to the lack of indigenous entrepreneurship , thereby motivating the nationalisation of all industries. Furthermore, the same literature also points to the fact that small businesses were mostly left out of development programmes because they were supposed less productive and having less productivity potential than larger ones. Vial (2008) challenges this view and shows that small firms represent about 70% of firms, 12% of total output, but contribute to 25% of total factor productivity growth on average over the period 1975-94 in the industrial sector (Table 10, p.316). ---------- Methodology/Key Propositions: A review of the empirical literature points at several under-researched questions. Firstly, we assess whether there is, evidence of small family-business entrepreneurship in Indonesia. Secondly, we examine and present the characteristics of these enterprises, along with the size of the sector, and its dynamics. Thirdly, we study whether these enterprises underperform compared to the larger scale industrial sector, as it is suggested in the literature. We reconsider performance measurements for micro-family owned businesses. We suggest that, beside productivity measures, performance could be appraised by both the survival probability of the firm, and by the amount of household assets formation. We compare micro-family-owned and larger industrial firms' survival probabilities after the 1997 crisis, their capital productivity, then compare household assets of families involved in business with those who do not. Finally, we examine human and social capital as moderators of enterprises' performance. In particular, we assess whether a higher level of education and community participation have an effect on the likelihood of running a family business, and whether it has an impact on households' assets level. We use the IFLS database compiled and published by RAND Corporation. The data is a rich community, households, and individuals panel dataset in four waves: 1993, 1997, 2000, 2007. We now focus on the waves 1997 and 2000 in order to investigate entrepreneurship behaviours in turbulent times, i.e. the 1997 Asian crisis. We use aggregate individual data, and focus on households data in order to study micro-family-owned businesses. IFLS data covers roughly 7,600 households in 1997 and over 10,000 households in 2000, with about 95% of 1997 households re-interviewed in 2000. Households were interviewed in 13 of the 27 provinces as defined before 2001. Those 13 provinces were targeted because accounting for 83% of the population. A full description of the data is provided in Frankenberg and Thomas (2000), and Strauss et alii (2004). We deflate all monetary values in Rupiah with the World Development Indicators Consumer Price Index base 100 in 2000. ---------- Results and Implications: We find that in Indonesia, entrepreneurship is widespread and two thirds of households hold one or several family businesses. In rural areas, in 2000, 75% of households run one or several businesses. The proportion of households holding both a farm and a non farm business is higher in rural areas, underlining the reliance of rural households on self-employment, especially after the crisis. Those businesses come in various sizes from very small to larger ones. The median business production value represents less than the annual national minimum wage. Figures show that at least 75% of farm businesses produce less than the annual minimum wage, with non farm businesses being more numerous to produce the minimum wage. However, this is only one part of the story, as production is not the only ''output'' or effect of the business. We show that the survival rate of those businesses ranks between 70 and 82% after the 1997 crisis, which contrasts with the 67% survival rate for the formal industrial sector (Ter Wengel & Rodriguez, 2006). Micro Family Owned Businesses might be relatively small in terms of production, they also provide stability in times of crisis. For those businesses that provide business assets figures, we show that capital productivity is fairly high, with rates that are ten times higher for non farm businesses. Results show that households running a business have larger family assets, and households are better off in urban areas. We run a panel logit model in order to test the effect of human and social capital on the existence of businesses among households. We find that non farm businesses are more likely to appear in households with higher human and social capital situated in urban areas. Farm businesses are more likely to appear in lower human capital and rural contexts, while still being supported by community participation. The estimation of our panel data model confirm that households are more likely to have higher family assets if situated in urban area, the higher the education level, the larger the assets, and running a business increase the likelihood of having larger assets. This is especially true for non farm businesses that have a clearly larger and more significant effect on assets than farm businesses. Finally, social capital in the form of community participation also has a positive effect on assets. Those results confirm the existence of a strong entrepreneurship culture among Indonesian households. Investigating survival rates also shows that those businesses are quite stable, even in the face of a violent crisis such as the 1997 one, and as a result, can provide a safety net. Finally, considering household assets - the returns of business to the household, rather than profit or productivity - the returns of business to itself, shows that households running a business are better off. While we demonstrate that uman and social capital are key to business existence, survival and performance, those results open avenues for further research regarding the factors that could hamper growth of those businesses in terms of output and employment.

The mobile phone : the new communication drum of Papua New Guinea

This thesis examines the role of mobile telephony in rural communities in Papua New Guinea (PNG). It is a threshold study which reports on research conducted in the earliest stages of mobile phone adoption in these areas. It explores the ways in which this new technology changes people’s lives, social structures and relationships. The research focuses on non-urban communities, which previously had little or no access to modern communication technologies, but which are in some cases still using traditional forms of communication such as drums. It has found that the introduction of mobile telecommunications has generally been viewed positively, although several negative concerns have been strongly felt. Specific benefits related to enhanced communication with relatives and friends living away from home villages, and use of the technology in time-critical emergencies or crises. Difficulties have arisen with respect to the cost of owning and operating a handset, as well as financial and logistical challenges when recharging handset batteries, particularly in areas with no mains electricity supply. Perceived damaging effects of mobile phone access related to sex, crime and pornography. The changes taking place are described through a social lens, by foregrounding the perceptions of villagers. The perspectives of key informants, such as telecommunication company managers, are also discussed. Employing the technique of triangulation (using different methods and sources) has helped to validate the findings of the research project. The sources constantly overlap and agree on the main themes, such as those outlined above. PNG is a developing country which performs poorly on a wide range of development indicators. A large majority of the people live outside of the major towns and cities. It is therefore worthwhile investigating the introduction of mobile phone technology in rural areas. These areas often have poor access to services, including transport, health, education and banking. Until 2007, communities in such regions fell outside of mobile phone coverage areas. In the case of all ten villages discussed in this thesis, there has never been any landline telephone infrastructure available. Therefore, this research on mobile phones is in effect documenting the first ever access to any kind of phone in these communities. This research makes a unique contribution to knowledge about the role of communication in PNG, and has implications for policy, practice and theory. In the policy arena, the thesis aids understanding of the impact which communication sector competition and regulation can have on rural and relatively isolated communities. There are three practical problems which have emerged from the research: cost, battery recharging difficulties and breakage are all major obstacles to uptake and use of mobile telephony in rural communities. Efforts to reduce usage costs, enable easier recharging, and design more robust handsets would allow for increased utilisation of mobile phones for a range of purposes. With respect to the realm of theory, this research sits amongst the most recent scholarship in the mobile phone field, located within the broader communication theory area. It recommends cautionary reading of any literature which suggests that mobile phones will reduce poverty and increase incomes in poor, rural communities in developing countries. Nonetheless, the present research adds weight to mobile phone studies which suggest that the primary advantages of mobile phones in such settings are for the satisfactions of communication of itself, and for social interaction among loved ones.

Corporate sustainability reporting for water : water footprint, global reporting initiative and the water accounting framework

Three initiatives with respect to water reporting in the mining sector are compared in this paper to understand the quantities that are asked for by each initiative and the guidelines of those initiatives through means of a case study. The Global Reporting Initiative (GRI) was chosen because it has achieved widespread acceptance amongst mining companies and its water-related indicators are widely reported in corporate sustainability reporting. In contrast, the Water Footprint Network, which has been an important initiative in food and agricultural industries, has had low acceptance in the mining industry. The third initiative is the Water Accounting Framework, a collaboration between The Minerals Council of Australia and the Sustainable Minerals Institute of the University of Queensland. A water account had previously been created according to the Water Accounting Framework for the case study site, an open pit coal mine in the Bowen Basin. The resulting account provided consistent data for the Global Reporting Initiative (GRI) and the Water Footprint attributable to mining but in particular, a deficiency in the GRI indicator of EN10 reuse and recycling efficiency was illustrated quantitatively. This has far-reaching significance due to the widespread use of GRI indicators in mining corporate reports.

Safety culture research, lead indicators, and the development of safety effectiveness indicators in the construction sector

Construction sector application of Lead Indicators generally and Positive Performance Indicators (PPIs) particularly, are largely seen by the sector as not providing generalizable indicators of safety effectiveness. Similarly, safety culture is often cited as an essential factor in improving safety performance, yet there is no known reliable way of measuring safety culture. This paper proposes that the accurate measurement of safety effectiveness and safety culture is a requirement for assessing safe behaviours, safety knowledge, effective communication and safety performance. Currently there are no standard national or international safety effectiveness indicators (SEIs) that are accepted by the construction industry. The challenge is that quantitative survey instruments developed for measuring safety culture and/ or safety climate are inherently flawed methodologically and do not produce reliable and representative data concerning attitudes to safety. Measures that combine quantitative and qualitative components are needed to provide a clear utility for safety effectiveness indicators.

The Autistic Behavioural Indicators Instrument (ABII) : development and instrument utility in discriminating autistic disorder from speech and language impairment and typical development

The Autistic Behavioural Indicators Instrument (ABII) is an 18-item instrument developed to identify children with Autistic Disorder (AD) based on the presence of unique autistic behavioural indicators. The ABII was administered to 20 children with AD, 20 children with speech and language impairment (SLI) and 20 typically developing (TD) children aged 2-6 years. Results indicated that the ABII discriminated children diagnosed with AD from those diagnosed with SLI and those who were TD, based on the presence of specific social attention, sensory, and behavioural symptoms. A combination of symptomology across these domains correctly classified 100% of children with and without AD. The paper concludes that the ABII shows considerable promise as an instrument for the early identification of AD.

Development of a Systematic Approach to Assessing Quality within Australian Residential Aged Care Facilities: The Clinical Care Indicators Tool

Recent years have seen the introduction of formalised accreditation processes in both community and residential aged care, but these only partially address quality assessment within this sector. Residential aged care in Australia does not yet have a standardised system of resident assessment related to clinical, rather than administrative, outcomes. This paper describes the development of a quality assessment tool aimed at addressing this gap. Utilising previous research and the results of nominal groups with experts in the field, the 21-item Clinical Care Indicators (CCI) Tool for residential aged care was developed and trialled nationally. The CCI Tool was found to be simple to use and an effective means of collecting data on the state of resident health and care, with potential benefits for resident care planning and continuous quality improvement within facilities and organisations. The CCI Tool was further refined through a small intervention study to assess its utility as a quality improvement instrument and to investigate its relationship with resident quality of life. The current version covers 23 clinical indicators, takes about 30 minutes to complete and is viewed favourably by nursing staff who use it. Current work focuses on psychometric analysis and benchmarking, which should enable the CCI Tool to make a positive contribution to the measurement of quality in aged care in Australia.

Safety culture research, lead indicators, and the development of safety effectiveness indicators in the construction sector

Construction sector application of Lead Indicators generally and Positive Performance Indicators (PPIs) particularly, are largely seen by the sector as not providing generalizable indicators of safety effectiveness. Similarly, safety culture is often cited as an essential factor in improving safety performance, yet there is no known reliable way of measuring safety culture. This paper proposes that the accurate measurement of safety effectiveness and safety culture is a requirement for assessing safe behaviours, safety knowledge, effective communication and safety performance. Currently there are no standard national or international safety effectiveness indicators (SEIs) that are accepted by the construction industry. The challenge is that quantitative survey instruments developed for measuring safety culture and/ or safety climate are inherently flawed methodologically and do not produce reliable and representative data concerning attitudes to safety. Measures that combine quantitative and qualitative components are needed to provide a clear utility for safety effectiveness indicators.

Environmental indicators for sustainable road development and operation

Road construction, maintenance and operation are activities that impact the environment by way of energy use, resource consumption and emission. Components such as construction material, transportation, street lighting, rolling resistance, traffic congestion during works, albedo and end-of-life processing impact the environment at different phases of the life of a road. With a view to promote sustainable development, a few sustainability rating schemes, e.g. Infrastructure Sustainability and Invest (Australia), Envision and Greenroads (USA), and CEEQUAL (UK) have been developed, that can assess road projects. These schemes address environmental areas such as: energy and emission, land, water, materials, discharges into surroundings, waste and ecology as factors for sustainable development. This paper assesses different rating schemes based on a defined comprehensive life cycle assessment (LCA) system boundary for road projects to identify different environmental indicators that address sustainable road development and operation. The findings indicate that new indicators are required to address different environmental components during the operation phase of roads.

Key performance indicators for measuring construction success

The construction industry is dynamic in nature. The concept of project success has remained ambiguously defined in the construction industry. Project success is almost the ultimate goal for every project. However, it means different things to different people. While some writers consider time, cost and quality as predominant criteria, others suggest that success is something more complex. The aim of this paper is to develop a framework for measuring success of construction projects. In this paper, a set of key performance indicators (KPIs), measured both objectively and subjectively are developed through a comprehensive literature review. The validity of the proposed KPIs is also tested by three case studies. Then, the limitations of the suggested KPIs are discussed. With the development of KPIs, a benchmark for measuring the performance of a construction project can be set. It also provides significant insights into developing a general and comprehensive base for further research.

Construction supply chain development interim report

The supply chain in the construction industry is less well developed than in manufacturing. This project proposes to bring world class international business profile benchmarking to assist in the development of small and medium sized (SME) subcontractors. This approach has been widely used in Europe and has enabled significant sectoral supply chain development. The construction SME supply chain is a critical component in the delivery of all construction projects. Furthermore, it undermines the sustainability of the individual enterprise and puts construction projects and jobs at risk. Government procurement agencies view this as construction industry capacity building. In the developed and developing worlds, SME sector firms routinely make up over 95% of companies. The construction industry supply chain is dominated by such firms. Supply chain development and capacity building have been largely neglected in the construction sector, despite rhetoric about the importance of the SME sector to the economy This project seeks to investigate the potential to apply the International Business Profile Benchmarking instrument with the construction industry. The project recognises that there are many facets to the quest for continuous improvement in the construction industry and in wider workplace in general. This first interim report reviews the international literature relating to construction industry performance measurement and performance improvement. A summary of the findings follow. ‘Best value’ is dealt with in a separate interim report.

Measuring behavioural indicators of self-esteem in the classroom

This study aimed to develop and validate an instrument to be used by teachers to measure the frequency of behaviors indicative of self-esteem and then to evaluate the instruments' reliability and concurrent validity. The Behavioral Indicators of Self-Esteem (BIOS) Scale proved to be a reliable and valid measure.

Firm social, cultural and intellectual capital : strategic indicators of international client satisfaction

Despite the increasing significance of the construction industry as an emerging sector of the Australian economy, there is inadequate research performed on construction design firms in terms of theoretical and empirical foundations. Although past research has identified the barriers and success factors for firm market entry, evidence suggests that to date no research has explicitly explored the sustainability of construction design firms in international markets. SMEs and their approach to firm internationalisation differ significantly from large manufacturing firms and a vast majority of construction design firms operate as SMEs. This paper develops a sustainable business model for construction design SMEs, which rely upon the development of clear Client Following (CF) versus Market Seeking (MS) strategies to support internal firm strategic and operational management. The understanding of these strategies is vital as the application of either will shape the design management approach of firms, which would in turn impact on the sustainability of these firms in foreign markets. Long-term sustainability of firms in international markets relies heavily upon client satisfaction. Client and project team participants’ communication during various design processes has often been problematic and the added difficulty of communicating across international boundaries further compounds the problem of capturing and maintaining client’s requirements. Therefore this paper develops a model for economic sustainability of Australian construction design firms working in international markets by exploring factors that affect client satisfaction across international boundaries, through the development of business performance indicators. These include not only the critical financial capital but also other ‘softer’ indicators, namely: social, cultural and intellectual capital. These act as a firm’s measure of success and the acquisition of this type of capital will provide significant advantages to firms’ success, hence sustainability in international markets.

Submission to Brisbane City Council : Draft Brisbane Economic Development Plan

As with any strategic planning process, evidence-based estimates are needed to plan effectively for the future. Comments below are based upon data drawn from the Brisbane Long Term Infrastructure Plan (Department of Local Government, Planning, Sport and Recreation, 2005) and the Brisbane Long Term Planning Economic Indicators (National Institute of Economic and Industry Research, 2005), as these are cited as the underpinning research for the economic plan. This submission focuses on one critical aspect of the strategic plan — the relationship between population growth, employment growth, and infrastructure provision. While the focus of the strategic plan is on the changes which would occur within Brisbane, it is important that consideration of predicted changes in surrounding local government areas be also carried out.