Abstract

Dr. Bart Nooteboom is research director at the Research Institute for Small and Medium-sized Business, Zoetermeer, Netherlands. In this paper he examines the relevance of a basic income to the development of small businesses. He argues that a basic income would stimulate and facilitate small businesses in several ways. It would enhance economic growth, employment and general welfare. A basic income would serve as a compensation for diseconomies of small scale production; as incentive for new firms; as an alternative to complicated and often ineffective present subsidies and other measures for small business. He also suggests that it could be solution to the problem of unfair competition from the "informal, "black", or "underground" economy.