There is no doubt that SMEs have a substantial role to play in creating jobs, economic growth and innovation but this role varies depending on whether a country is fully developed or emerging. There is evidence that the role of internationalisation is vital in developed world economies in determining the value of SMEs’ contribution to economic growth.
This report aims to establish the critical success factors for policy and infrastructures to support the growth of small and medium-sized businesses. It reviews the size of the business base, looks at skills and innovation support in the education and training systems, reviews access to finance structures, access to mentoring and support networks and the balance between public and private sector support, and concludes there are many common features of enterprise policy.
The research for this report reviewed enterprise policy and institutions in nine countries. Five of these are developed nations: the UK, Germany, France, the US and Singapore; four are emerging: China, India, South Africa and Nigeria. These countries were selected on the basis of their different approaches to enterprise policy, stages of development and size.
The report demonstrates that the process that takes the entrepreneur out of self-employment and/or ‘necessity entrepreneurship’ and through to sustainable, job-creating and growth-oriented enterprise is vital for both wealth and value creation. Critically, the report shows that policy to support SME growth should not be seen as linear, and nor should policy be seen simply as the regulation of individual entrepreneurial actions. Enterprises, irrespective of their geographical location or stage of development, require different support from the same infrastructures as they grow. The balance of public and private sector funding should change as the returns from any support move from public returns to private returns. Similarly, the fiscal system must work to encourage private sector investment at an early stage, where returns in the long term accrue to the private sector or to the social sector (as in the case with philanthropy). This requires tax incentives to promote and sustain a culture of re-investment.