Developing local support services for small business development in Central and Eastern Europe—The donor challenge

Abstract

The paper focuses upon the future development of local support for small enterprises in transition economies. It points to the rapid growth in numbers of support agencies in all of these countries. These agencies are largely based upon western models and are supported by western funds. A number of issues are raised in respect of their future. These are explored under three headings: the true relevance of the western models; strategic issues in die survival of agencies; and conceptual issues as they relate to the problems of adding value and effectiveness in networking and organization design. These issues are then examined in the context of a comparative in-depth study of a number of Hungarian and UK Local Enterprise Agencies. The results point to die value of ‘a priori’ comparative exploration of die circumstances that underpin any model that is to be used as a basis for a transfer process. They indicate that UK agencies share many strategic problems with Hungarian agencies and cannot offer many solutions. They also demonstrate the shared weaknesses of die policy and networking conceptual base. The results point to a range of needs that derive from die ‘second stage’ strategies demanded of such agencies in die transition economies if they are to survive and grow following die reduction of donor support.