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International Competitiveness for Small and Medium-size Enterprises: Lessons from Case Studies
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About International Competitiveness For Small And
In the age of globalisation, small and medium-size enterprises (SMEs) in the developing world face considerable challenges to survive and prosper in the face of competition at home and in international markets. These case studies make it possible to lay out a road map for developing competitiveness, taking account of national priorities and specificities. SMEs can do much for themselves, but they also need an enabling business environment. In the domestic market, actions to improve competitiveness are likely to be necessary in the following areas: taxation, tariffs and other policies affecting the cost of imported inputs; the formation of cluster groups; the availability of development support, including finance (business capital); improving access to foreign direct investment; a proactive competition policy; skilled labour; innovation; meeting international standards; and access to government procurement programmes. In international markets the issues that may need to be addressed are: obtaining access to information on international markets; assistance in marketing; participation in global value chains (GVCs); access to trade finance on reasonable terms; meeting standards and certification requirements in international markets; trade facilitation; trade infrastructure; and effective participation in international trade institutions and negotiations. In interviews with the author in more than 30 countries, the private sector lists their priorities as: addressing infrastructure weaknesses, improving access to finance on reasonable terms, cutting red tape (domestic regulation and trade facilitation), and supportive fiscal policies (taxation, tariffs). Implementation of action programmes needs to be supported by aid for trade (AfT), targeted at the key cost centres. Support from the international and regional financial institutions or other development partners maybe needed, especially for the big budget items such as hard and soft infrastructure and trade facilitatio
