Supporting the Export Activities of Small and Medium Enterprise (SME)

Abstract

There is no longer doubt that the performance of small and medium enterprises (SMEs) is very important for both the economic and the social development of most developing (or less developed) countries (LDCs). That importance reflects SME’s well-recognized advantages in employment generation, income growth, entrepreneurial training, technical and allocative efficiency, lower degree of wage inequality and greater flexibility in the face of changing demand patterns, trade policies and macroeconomic conditions. Yet, because of the force of globalization, the needs for debt repayment and the increasing appreciation for the efficiency effects of international competition, the continued success and usefulness of the SME sector in LDCs’ economic and social development, they will also have to succeed in penetrating international markets. Large enterprises (LEs) have long enjoyed major advantages over SMEs in export markets, so finding the secrets to SME success on that front represents a considerable challenge. The magnitude of the challenge is rendered greater by virtue of the dearth of knowledge concerning (a) the problems faced by SME exporters, (b) how some of them do manage to overcome these problems, and (c) the effectiveness of various (governmental and non-governmental) collective support systems in helping SMEs in this objective. Though there may be a considerable overlap between the problems of SMEs in general and those of exporting SMEs in particular, given the substantial knowledge that has been accumulated on the former, we feel it appropriate and important to focus on the latter, i.e., the problems and means to success of exporting SMEs.