The economic activities are primarily concerned with production, exchange and distribution of goods and services. Human beings engage themselves in economic activities to earn their livelihood. For example, a teacher goes to school, a manager to office, a doctor to his clinic or hospital and a factory worker to factory to earn a living. These people can be grouped into self-employed and wage-employed. A doctor In the above example is self-employed because he is working in his own clinic whereas a teacher, an officer and a factory worker are wage-employed as they are working for others against fixed salary or wages.

On the other hand, non-economic activities are undertaken by human beings not for earning money, but due to love and affection, social obligation, and religious activities. In this lesson, we shall discuss some important aspects of self-employment as a career.

A person running Stationery Shop A person running Tailoring Shop

Fig. 5.1 : Examples of Self - Employment

All these instances are of self-employment In such activities, there is no fixed salary but earnings depend on the income you can make by selling goods or providing services at a price.

The two career options mentioned above differ In many ways. Firstly, the status of a person in wage-employment is of an employee but in self-employment the status of a person is that of an employer or owner. Secondly, in wage-employment earning depends upon the employer that is how much the employer will pay you but in self-employment earning depends upon the ability of the self-employed person. Thirdly, in wage-employment a person works for others benefit but in self-employment one works for the benefit of oneself. Fourthly, the scope of earning is limited in the case of wage employment because it is decided in advance by the employer, but in self-employment scope of earning is unlimited as it is not decided .in advance and depends largely on the ability of the person concerned. Finally, in wage-employment, the employee is given a specific job to work on whereas a self-employed person can undertake any work that is necessary for his purpose. Some of these differences are summarised below :

Self-employment is often regarded better than wage-employment for the following reasons:

(a) Self-employment offers opportunities for using one's own talents for one's benefit. You can use your ability and time in the most profitable manner through self-employment.

(b) Self-employment is possible even without large resources of capital and other facilities. For example, a replay-cum-service shop can be started with limited amount of capital.

Fig. 5.2 : A person running repair-cum-service shop

(c) In self-employment, the person learns many things 'on the job' because he has to take all the decisions regarding his business activities for his own benefit.

Self-employment activities may take many forms. Some of the activities in which our neighbours may be self-employed are the following :

Fig. 5.3 : A person running medical store

Fig. 5.4 : Vegetable Vendor

Fig. 5.5 : Hairdressing Activity

Fig. 5.6 Cane Furniture Making

Fig. 5.7 Rickshaw Pulling

You may list the types of activities in which people in your locality are self-employed.

Self-employment, on the other hand, refers to full-time involvement in ah occupation. Self-employment may or may not involve risk. A tailor, for example, may start a business by purchasing a sewing machine with his own resources at his . own residence. It involves very less risk. But if he expands his business by employing many people using modern machines, it may be more risky to invest his own savings or borrow money for that purpose. If he decides to take the risk, there may be an element of entrepreneurship in that venture. If he is continuously engaged in expanding his business by innovating new products, he will be engaging in entrepreneurial activities. However, strictly speaking, an entrepreneur does not continue to run the same business for a long period of time.

Self-employment, thus, does not mean the same thing as entrepreneurship. But self-employment promotes entrepreneurship. A self-employed person has to be innovative, to be able to prosper and must take risks where necessary in his own interest.

In order to be successful, a self-employed person must assess what resources he will need. These may be of the following four categories:

(i) physical

(ii) economic

(iii) human

(iv) technological.

(a) Self - employment : An occupation in which an individual employs himself either in producing goods or providing services.

(b) Reasons for preference of self - employment over wage- employment

(i) Provides opportunities for using one's own talent

(ii) Possible without large resources

(iii) Independent work

(c) Self-employment and Entrepreneurship

(a) Self-employment may or may not involve entrepreneurship.

(b) Business done with limited resources and little risk is self-employment.

(c ) Entrepreneurship involves taking risk and using new ideas, new techniques of production or distribution to increase profit.

(i) Physical resources like place of work, machine and tools

(ii) Economic resources like money capital

(iii) Human resources like skilled and unskilled employees

(iv) Technological resources like knowledge and use of best method of production and distribution

2. In what way does self-employment differ from wage-employment? Explain, with an example.

3. Explain the Interrelation between self-employment and entrepreneurship in fifty words.

4. List any four physical resources.

5. Match column 'A' with 'B'.

(b) (ii)

(c) (ii)

(d) (iv)

B. (a) (iii)

(b) (iv)

(c) (i)

(d) (ii)

(e) (iv)

C. (i) True, (ii) False, (iii) False, (iv) False.

5.2 (i) True

(ii) False

(iii) False

(iv) True

5.3 (a) (i)

(b) (ii)

(c) (iii)

(d) (i)