Small business

2.1 Linking SME development targets to overall economic and social objectives
Objective: To position SME development targets within the framework of overall macro policy objectives. 
Overall development objectives may include employment creation, productivity, competitiveness,
GDP growth, price stability; and external payments equilibrium; as well as social, sectoral and regional
equality including poverty reduction. Positioning SME development policy against national targets makes
it easier to co-ordinate the relevant activities of different ministries and to prioritise goals. It also establishes
the basis for a tighter process of decision-making. Very often official statements concerning SME policy consist
of a list of generalisations about the role of small business in society without any details as to the priorities
and potential in this respect.  
Specific objectives can be set regarding the SME contribution to poverty reduction, job creation, the
growth of value added, the welfare of specific groups (for example, women or indigenous business
development in different localities), or major sectoral targets, for example in tourism or agro-based
development. Specific targets relating to international competitiveness may also improve the focus of new
small business development initiatives. Without this link to specific macro goals, SME development policy
may drift over time as one priority succeeds another. On the other hand, policy makers should be aware
that priorities must be reviewed regularly to reflect new development challenges.
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In Western Europe in the 1980s, small and medium enterprise policy was substantially a reaction to the need to create
jobs at a time when large companies were shedding large numbers of employees and the public sector was shrinking. Such
a focus led to relative neglect of other considerations such as the impact of enterprise development on productivity and
competitiveness and a balanced economic structure. 
In the transition to a market economy in Poland, the SME sector was initially also seen as primarily a source of new
jobs. By the end of the 1990s, however, a major policy document, Activities of the Polish Government towards SMEs to 2002,
identified competitiveness, exports and the ability to attract investors as the longer-term objectives.
Some key questions to be addressed in linking SME policy with national objectives therefore concern
the sector’s impact on:
• The quantity and quality of jobs created;
• Productivity and business development targets;
• International competitiveness, adding value to exports;
• Regional and local development and regeneration;
• Key industry and service sectors targeted in national plans;
• The reduction of inequalities and poverty.