A cottage industry is a small-scale, decentralized manufacturing business often operated out of a home rather than a purpose-built facility.

In July 2016, the United Nations General Assembly collectively adopted a resolution which declared the year 2016 to 2025 as the Third Industrial Development Decade for Africa. While pointing out that Africa was still the poorest region in the world, the Assembly stressed on the need for the continent to take quick actions to foster industrialization (United Nations General Assembly, 2016).

Development of cottage and tiny industries are equally important as the development of small, medium and large industries as they generate more rural employment. The promotion of these industries leads to an improvement in social and economic conditions; and an overall balance of rural and urban industrial activities, which in turn, retards migration of labour from rural to urban areas.

A major benefit of cottage industries is that they allow people to work from their homes. Women have benefited the most because they can work from home while still tending to their families. Many cottage businesses include the entire family in their operations including children.

Cottage Industries can successfully complete with machine made goods, if they are run on modern lines. Periodic exhibitions of the good; manufactured by Cottage Industries and development of Co-operative system are of great advantage for their progress. Co-operative system can help in solving the problems of capital, raw material and marketing then they would easily withstand the competition Large Scale factory production.

While companies operating in cottage industries may remain small, they still have to compete with other firms, whether other cottage industries or larger-scale companies. This requires them to employ new technologies that will improve efficiency and productivity. They will also have to compete for sources of labor, which can be especially difficult as a country becomes more developed and wages rise.

As expected of every enterprise, there should be gradual evidence of growth from the cottage level to SME level. The catalytic role of the government through enabling institutions then comes into play, an example being the Kenya Industrial Estates (KIE) which was established  to provide small indigenous entrepreneurs with opportunities to enter into the manufacturing sector. KIE provides necessary facilities such as machinery, equipment, and technical services to small manufacturers who qualified for KIE assistance.