A/HRC/35/32 to account for over 95 per cent of all enterprises. 3 Furthermore, ILO estimates that, globally, they provide two thirds of all employment. 4 7. While there is a wealth of research on how small and medium-sized enterprises contribute to economic development and employment generation, ILO has indicated that data is lacking on the quality of employment in them. The information available indicates that working conditions in these enterprises are generally worse than in larger business enterprises.5 At the same time, they are often an important source of employment for groups who are particularly vulnerable to social and economic deprivation, including women, older persons and less-skilled workers. 8. Despite the discrimination women continue to face in all regions, it is estimated that in emerging markets around one third of formal small and medium-sized enterprises are fully or partially owned by women. 6 Gender-specific constraints, including discriminatory laws and practices concerning women’s economic rights and legal capacity, also contribute to the fact that a higher proportion of women-run small and medium-sized enterprises are not formally registered.7 9. ILO estimates that, worldwide, a significant number of small and medium-sized enterprises operate in the informal economy. In some developing countries, there are more informal enterprises than formal. For example, it is estimated that, in India, there are 17 times more informal, unregistered enterprises than formal. 8 While the number of informal business enterprises vary significantly between countries, ILO estimates that the informal economy accounts for between half and three quarters of all non-agricultural employment in developing countries. 9 Moreover, data from 47 low- and medium-income countries shows that, in general, more men work in informal enterprises than women, with the exception of sub-Saharan Africa, where the percentage of women employed in the informal sector is generally higher.10 10. The high number of small and medium-sized enterprises in the informal economy poses specific challenges for the implementation of the Guiding Principles. ILO has highlighted that the informal economy encompasses the informal sector and informal employment and is defined as all economic activities by workers and economic units that are, in law or in practice, not covered or insufficiently covered by formal arrangements. 11 There have been attempts to identify the linkages between the formal and informal economies, including the argument that there is some degree of interaction between both types of economy. There is a linkage between the informal economy and a heightened risk of adverse human rights impacts because of the way the informal economy operates outside of legal and regulatory frameworks and therefore more easily escapes human rights and labour law mechanisms of oversight and social protection. Workers in the informal sector do not have legal and social protection through their work and are generally not unionized, and their working conditions more easily escape the oversight of labour inspectorates. As informal businesses are often diffused and unorganized, it is more difficult and more expensive for authorities to work with these businesses to help implement standards and to track and enforce implementation. 3 4 5 6 7 8 9 10 11 4 See OECD Policy Brief “Small and Medium-sized Enterprises: Local Strength, Global Reach” (Paris, 2000). Available from www.oecd.org/cfe/leed/1918307.pdf. See http://ilo.org/global/topics/employment-promotion/small-enterprises/lang--en/index.htm. See ILO (2005), Report IV: Small and medium-sized enterprises and decent and productive employment creation, pp. vi, 23. See International Finance Corporation, Strengthening Access to Finance for Women-Owned SMEs in Developing Countries (Washington, D.C., 2011), p. 6. Ibid, p. 7. See ILO, Report IV (footnote 5 above), p. 5. See ILO, Women and Men in the Informal Economy: A Statistical Picture (2013), p. 8. Available from www.ilo.org/wcmsp5/groups/public/---dgreports/--stat/documents/publication/wcms_234413.pdf. Ibid, p. 15. See http://www.ilo.org/global/topics/wages/minimum-wages/beneficiaries/WCMS_436492/lang-en/index.htm.