Small business

8
Wilfried Luetkenhorst
Director 
Small and Medium Enterprises Branch
UNIDO
Rainer Geiger
Deputy Director
Director for Financial and Enterprise Affairs
OECD
FOREWORD
The establishment and nurturing of SMEs is a vital ingredient in creating dynamic market economies in
the economic and social development of transition countries. Entrepreneurs   are the big drivers of economic
growth, innovation, regional development and job creation. A strong and vibrant SME sector provides a
strong foundation to increase standards of living and to reduce poverty. 
Despite the internationally recognised importance of SMEs, they still face major challenges in many
developing and transition countries today. The challenges of business entry, survival and growth are often
substantial. The availability of financial resources and lack of capacity to handle complex business
management issues as well as a complicated and bureaucratic environment present major obstacles.  As
a result, there is an urgent and continuous need to improve the different elements that make up a good
entrepreneurial climate. 
This guide provides practical guidelines for policy makers on how best to review the process of policy
development and establish strategic plans for micro, small and medium enterprise development. It is a
further tool and reference source for all policy makers and actors dealing with small businesses, especially
in transition countries seeking to further develop their market economies.
Private sector development relies on a partnership between the private and public sectors. The
competitiveness of an enterprise may depend as much on what a government does as on what the firm’s
owners and managers do. To maximise the full benefits of small business in the economy policy makers
must therefore review performance in partnership with the private sector, improve the policy framework
and build better strategic plans to achieve their goals. This guide charts the methodology to fulfil that task.
We thank the many OECD and UNIDO member countries and international organisations and private
sector representatives from various countries for their excellent partnership and expert contributions in
providing advice and guidance for the preparation of this guide.

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EFFECTIVE POLICIES FOR SMALL BUSINESS - © OECD 2004