Small business

4.6 Supporting local authority development
Objective: To create mechanisms and new forms of organisation enabling local authorities to develop a range of
appropriate support mechanisms for SME development. 
Local and regional authorities play an active role in the promotion of entrepreneurship and small
business, as among others a report of the European Commission has shown (see Annex 1). Local authorities
can be guided by central government to:
• Understand how to identify strategic priorities at the local area and industry sector level and to
analyse the needs of SMEs individually and collectively;
• Develop a strategic vision for SME and local economic development, establishing priorities;
• Manage projects in support of SMEs at the local level, evaluate and monitor them and raise funding,
in partnership with the private sector;
• Understand the roles of various local stakeholders and how public-private sector cooperation can help
cover gaps in support services;
• Maximise the efficiency and effectiveness of support services provided at different public
administration levels;
• Develop suitable performance standards for the provision of services and raise the competence of
providers of SME services;
• Develop effective marketing of local SME support.
Central government can assist in harmonising the role of the local authorities, increasing the effectiveness
of their activities, by supporting the growth of local authority associations. 
EFFECTIVE POLICIES FOR SMALL BUSINESS - © OECD 2004
4. Stakeholder Development
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The National Association of Municipal Governments was extremely active in Hungary during the process of transition.
The Council of Local Government Associations is a co-ordinating organ bringing together various local government bodies.
Under this mechanism regulations affecting small businesses can be harmonised and privatisation processes enhanced using
best practice exchange.