A MICRO-STUDY OF THE EFFECT OF CHOICE OF TECHNOLOGY ON EMPLOYMENT AND OUTPUT: THE CASE OF SMALL TEXTILE FIRMS IN NIGERIA

The objective of this study is to analyze as well as appraise, with the aid of both qualitative and quantitative data, the actual and potential contribution of small plants to unemployment reduction and output expansion within the Nigerian context. For this purpose, a field survey of small weaving plants, with special emphasis on the study of handlooms, was carried out. An explanation of the existing contrast in productivity levels of small plants is made possible with the aid of both statistical and descriptive analysis of survey data. The study compares the relative contribution of the small and large plants to employment and output per unit of investment. The study suggests that it is possible to increase both the rate of labor absorption and output by expanding small-scale industries of the intermediate sector. In contrast, expansion of the modern capital-intensive sector often results in output increases, but also in unemployment increases. The study also analyzes in some detail the technique and processes of handloom weaving and the cost and labor content of these processes. The analysis and findings of this study provide useful information for policy makers faced with the problem of designing programs of support for the promotion of small-scale industries. As for policy, the study also proposes the establishment of a specialized financial institution, such as the Small Industry Development Bank, to cater to the credit, technical, and managerial needs of small plants.