Home-based enterprises (HBEs) are unpopular with many policymakers and development theorists. Are their objections justified? Does the presence of HBEs hinder upgrading of residential environments? Are those who work at home exploited victims doing outwork for large manufacturers?

Myth-busting research from CARDO at the University of Newcastle upon Tyne examines the effects of HBEs on the home and neighbourhood environment in urban settlements in Bolivia, India, Indonesia and South Africa. It presents evidence which refutes the arguments used to justify HBE-unfriendly planning regulations.

HBEs are statistically invisible for they are often illegal and their operators fear they will be closed down or harassed to pay bribes to keep their enterprises going. Their numbers, however, keep on growing as structural adjustment and declining formal sector employment drive many people to set up an enterprise in the only space they can use without further cost – their home. Across the developing world, planning laws seem to be incongruent with the practices and attitudes of the millions of people who make a living at home.

Research found that outworking based on piecework is not nearly as important as it appears from existing literature on domestic employment. HBEs take a range of entrepreneurial forms. The most common type is a small outlet selling daily household necessities for people who do not have a refrigerator or much storage space. Production HBEs are often concerned with clothing manufacture. Other enterprises in the samples of 150 households in each case study range from TV tuner assembly to breeding of crickets (essential to sustain ornamental fish and song birds which are much prized in East Asia).

Evidence is produced that HBEs:

• greatly increase employment opportunities for low-income households, particularly women
• boost well-being - in three of the sample countries (but not India) HBE households are at least 25 per cent better off than non-HBE counterparts
• generate 50-75 per cent of all household income for participating households
• do occasionally pose threats to health and safety, but that operators are for the most part well aware of risks and take action to minimise dangers
• do not, as is often claimed, bring extra traffic into residential areas
• generate better living conditions - HBE operators usually have more indoor space than their non-HBE neighbours.

Planners need to shed their utopian dreams that suburban residential areas can be filled with happily dozing households and quietly playing children. Urban areas are vigorous, changing, challenging and productive environments. Commercial, retail and light industrial uses should be encouraged in all low-income residential areas. Policymakers must:

• allow locally-managed regulation of HBEs - if representative local committees vote to allow them in their neighbourhoods, then bureaucrats should not intervene to close them down
• provide mains electricity with HBEs in mind. Industrial levels of electrical voltages should be available if required
• ensure that rubbish collection services are geared up to expect higher levels of waste generation as a result of HBEs
• allow space for HBEs when allocating plots in newly zoned residential areas.

Source(s):
‘Negative impacts of home-based enterprises: exposing some myths’, CARDO, School of Architecture Planning and Landscape, University of Newcastle upon Tyne, by Graham Tipple, Justine Coulson and Peter Kellett, December 2001 Full document.
‘The effects of home-based enterprise on the residential environment in developing countries’, CARDO, School of Architecture Planning and Landscape, University of Newcastle upon Tyne, by Graham Tipple, Justine Coulson and Peter Kellett, March 2001. Full document.
‘Settlement upgrading and home based enterprises; some empirical data’, CARDO, School of Architecture Planning and Landscape, University of Newcastle upon Tyne, by Graham Tipple, 2001 Full document.

Funded by: DFID (IUDD)

id21 Research Highlight: 5 April 2002

Further Information:
Graham Tipple
Centre for Architectural Research and Development Overseas (CARDO)
School of Architecture Planning and Landscape
University of Newcastle upon Tyne
Newcastle upon Tyne NE1 7RU
UK

Tel: +44 (0)191 222 6024
Fax: +44 (0)191 222 8811
Contact the contributor: a.q.tipple@ncl.ac.uk

Justine Coulson

Contact the contributor: j.a.coulson@ncl.ac.uk

Peter Kellett

Contact the contributor: p.w.kellett@ncl.ac.uk

School of Architecture, Planning & Landscape, University of Newcastle upon Tyne, UK

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