The wider context: the importance of the macroenvironment for small enterprise development
Both as a result of ideological factors and from sheer necessity, international agencies and governments in developing countries have been looking increasingly in recent years towards the small-scale industrial (SSI) sector as a source of growth. In countries throughout the South, studieshave been commissioned, strategies planned and policies implemented to promote the sector. A common feature of most of these strategies is a heavy emphasis on supply-side inputs, that is on the provision of a variety of services to small firms to encourage their development. Conversely, relatively
little attention has been paid to the wider, macroeconomic environment and to its role in fostering or hindering the sector's growth.It is not the aim of this paper to argue that there is no role for government to play in fostering SSI by means of an improved package of assistance. On
the contrary, much can be achieved in this field. Rather, the suggestion is that the scope for development of the sector is conditioned more by macroeconomic factors, particularly the strength and position of large firms, than by the level of government assistance. It is, consequently, proposed
that an appropriate diagnosis of the problems faced by the sector must be based on an analysis of the role played by SSI within the macroeconomy and its linkages with other sectors, particularly the large-scale industrial sector.
have been commissioned, strategies planned and policies implemented to promote the sector. A common feature of most of these strategies is a heavy emphasis on supply-side inputs, that is on the provision of a variety of services to small firms to encourage their development. Conversely, relatively
little attention has been paid to the wider, macroeconomic environment and to its role in fostering or hindering the sector's growth.It is not the aim of this paper to argue that there is no role for government to play in fostering SSI by means of an improved package of assistance. On
the contrary, much can be achieved in this field. Rather, the suggestion is that the scope for development of the sector is conditioned more by macroeconomic factors, particularly the strength and position of large firms, than by the level of government assistance. It is, consequently, proposed
that an appropriate diagnosis of the problems faced by the sector must be based on an analysis of the role played by SSI within the macroeconomy and its linkages with other sectors, particularly the large-scale industrial sector.
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