Small enterprise development

Introduction

Over US$24.5 billion of development aid is targeted at Small and Medium Sized Enterprises (SMEs) and donor interest is increasing; yet the development benefits of targeting small enterprises are controversial. This page explores the debates in more detail, and lists key resources on the topic.

At a glance: Short reads on Small Enterprise Support

  • DCED Synthesis Note: Current Debates on Small Enterprise Development (last updated October 2017): This four-page note summarises current debates on the definition of small enterprises, their role in job creation and poverty reduction and the most appropriate forms of support. Key take-aways include:
          • Small enterprises provide a large share of employment in low-income countries buttheir contribution to job growth is driven by a few fast-growing businesses. Given the lower survival rates of small enterprises, they create similar amounts of jobs as large ones.
          • Combining finance with management training has helped increase incomes of small business owners; yet, long-term effects on productive growth may require support to small but high-growth entrepreneurs, and improving the market systems in which they operate.
          • The set-up of an SME promotion agency, which channels all government support to the sector, has proven more efficient than spreading resources over various support organisations.

DCED publications on Small Enterprise Support

The role of small enterprises in development

Overview documents

High growth enterprises

Micro-enterprises

Different forms of support to small enterprises

Access to finance

Business environment reform and trade facilitation

Promoting women’s eeconomic empowerment through small enterprises

Evaluations of small enterprise support programmes

Guidance for small enterprise promotion

Photo credits

Photo Credit: Chandan Dey