Providing technical assistance in support of business development

Technical cooperation concerning institutional support for SME development may take the form of contributing to institution building, including support for the establishment of effective support agencies or SME associations, through [inter alia] training programmer for capacity building and support for networking, including the provision of equipment, in order to allow support agencies or SME associations in recipient countries to link up with counterparts in donor or other countries for the purpose of sharing information, experiences, lessons learned and "best practices" in the area of support for SME development. Donors can also help in the process of a constructive and collaborative policy dialogue between the public and private sectors, through their own contacts and their support for the development of representative business organizations, including SME associations.

Donors recognize that differentiated approaches may be needed for different categories of countries. As indicated in a report of the Development Assistance Committee, "Middle-income countries in general have well-established private sectors and the basic institutions and markets for producing and selling goods and services. The role will often be to support business-to-business linkages ([ie] transferring capital, technology and management and marketing know-how) and the creation of business networks. Nevertheless, it will be important for donors to continue building local and institutional and technical capacities and helping to create a more favourable environment for initiative and investment in these middle-income countries. Least developed countries, which have fewer and weaker institutions - markets and entrepreneurs and more destabilizing factors, need assistance targeted at improving the enabling environment, strengthening institutions and establishing threshold conditions for business. Countries of the former Soviet bloc present altogether different needs and opportunities: while production skills and basic infrastructure exist, capital is scarce, marketing know-how is lacking, industry is often unable to penetrate and compete on international markets. Further, attitudes and habits more conducive to private enterprise ([ie] risk taking, the concept of private property, the profit motive) are slow to develop".