Small business

3.4 Linking national, regional and local development efforts
Objective: To establish mechanisms for co-ordinating policy and practice between central and local government
and harmonising the development activities of other stakeholders. 
Section 2.3 briefly discussed the role of central government versus the regional and local government,
indicating that the greater the power at the local levels, the greater will be the sensitivity to SME needs
and the greater the capacity to take appropriate action. Decentralisation of development responsibilities
usually involves the creation of regional and/or local development agencies. These provide a basis for
managing development policy in a differentiated way, taking account of the characteristics and potential
of the regional or local economy. 
EFFECTIVE POLICIES FOR SMALL BUSINESS - © OECD 2004
3. Policy Management
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In Romania the government, the employers associations and the trade unions have a formal Social Agreement, which
prioritises common actions on a range of economic and social issues. A key component of the agreement is the establishment in
every ministry of a Commission of Social Dialogue, which meets monthly, mainly to focus upon regulatory issues of common interest.
In 1993, the first regional agency in the Czech Republic was created with EU support in the Ostrava region, to deal with
the severe restructuring problems in this former heavy industry and coal mining regions. All 14 administrative regions of
the country now have an agency; some lower-level administrative units with special development problems have also set up
agencies. Organisational/legal structures vary, but public-private sector partnerships predominate. Tasks range from regional
development policy formulation and execution to practical support (advice, business infrastructure, etc), often with a special
SME component (such as the provision of incubators). 
In Poland, regional agencies play a key role in implementing ‘regional development contracts’, which are based on a national
strategy for regional development and a regional strategy formulated within that framework. Government funding of activities
is provided for their execution. Each of the 16 voivodships (regions) has its own regional agency; at the lower administrative
level, local development agencies have been created as well. As in the Czech Republic (and in EU countries), legal structures
vary. SME promotion is a major component of the regional strategies. 
In most Central European transition countries, national associations of regional agencies serves as discussion platforms,
information sources and representatives of the regions at the national government level. 

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The critical factors in the success of a decentralised approach to development are:
The degree to which local agencies have the freedom to develop their own plans within a national
development framework;
• Their capacity to create differentiated programmes and products; 
• Their ability to work effectively with and co-ordinate the efforts of the various stakeholders at the local
level;
• Funding and financial accountability.
Experience in the Central European transition countries shows that two factors are often stumbling
blocks: