Friday, February 17, 2012
Small and medium size enterprises: The road to more jobs (II)
The global economy needs to create more han 600 million jobs in the next decade.Three quarter of them because of population growth..-
The pice of capital goods is decreasing because of the scale factor at the global economy level, technological progress, and free trade.This lower prices induces a substitution from labor to capital specially in the manufacturing sector ,which might imply slower rates of employment gains in the that sector.Besides ,current unempolyment levels in ost of the advanced economies , make aditional pressure on the employment gains side.
Therefore, the goal of creating more jobs have some constraints other than those related to labor policy desing.
Thus ,the question is where those jobs will come from ?
The answer to this question is the importance of SMZE to the issue. It means that policy makers have to focus on those incentives more suitable to let the SMZE enterprises to do what it can do best : Create jobs, and support innovation. On the other side ,much of those new jobs need to be more quailified , given the fact that these kind of jobs are complementary with capital goods.-
The whole design of SMZE policies is a new challenge for the traditional macroeconomics setting, quite fiited to aggregate variables, but not that much prepared to understand the new dinamics of the mix economics (micro and macro at the same time).
Some of those new policies might include.
a..- Tax incentives
b. On the job Training facilities
c.- Closer link with educational entities (Univerisites)
Better market flexibility might help, but not that much if it does not considers more qualification and trainig needs.-