FOR SMALL AND MEDIUM-SIZED ENTERPRISES (SMES PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY
TOWARDS A MORE RESPONSIBLE AND INCLUSIVE GLOBALISATION EXECUTIVE SUMMARY OF THE BACKGROUND REPORTS Second OECD Conference of Ministers responsible for
Small and Medium-sized Enterprises (SMES Promoting Entrepreneurship and Innovative SMES in a Global economy Towards a More Responsible
and Inclusive Globalisation Executive Summary of the Background Reports Istanbul, Turkey 3-5 june 2004 ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th december 1960
and which came into force on 30th september 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed
†to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining financial
stability, and thus to contribute to the development of the world economy †to contribute to sound economic expansion in member as well as nonmember
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Â OECD 2004 3 Table of contents Preface...5
Entrepreneurship and SME Innovation...8 Tools for SME Innovation...17 SMES in the Global economy...25
Enhancing the Role of SMES for Development...32 Evaluation of SME Policies and Programmes...37
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Preface At the first OECD Conference for Ministers Responsible for SMES, hosted by the
and nonmember economies adopted the â€oebologna Charter for SME Policiesâ€. They envisaged the Bologna Conference as the start of a policy dialogue among OECD
member countries and nonmember economies and that it would be followed up by a continuous monitoring of progress with the implementation of the Bologna Charter
Entrepreneurship. The wide variation in stages of economic development, institutional arrangements and political context across the economies participating in the Bologna
Process, now more than 80, means that not all parts of specific policies and programmes are appropriate for all participants.
promoting innovative SMES in the global economy. In broad terms, these policy messages and recommendations elaborate on the themes developed in the Bologna
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Introduction Ministers have the opportunity to assess priorities
for SME policies†The second OECD Conference for Ministers Responsible for SMES brings together 30 OECD countries and more than
50 nonmember economies at Ministerial level to exchange views on â€oepromoting Entrepreneurship and Innovative SMES in
a Global Economyâ€. It offers Ministers the opportunity to take stock of the progress that has been achieved in implementing
the Bologna Charter, adopted at the Bologna Conference in June 2000. They may also assess policy priorities for realizing
enterprises (SMES), especially innovative ones, can make to better economic performance, notably in terms of jobs and
environment in which they operate permits this to happen Some of the issues relate to policies that affect the whole
economy and hence the general business environment in which SMES must operate. Other issues relate to policies and
enterprise creation, fostering entrepreneurship and facilitating the growth and prosperity of SMES once established. Still
Growth Project (The New Economy: Beyond the Hype, OECD, Paris 2001) which underlines the need for micro-policy reforms to
economies. These relate in particular to the four main micro -drivers of growth: entrepreneurship, innovation and
technology diffusion, information and communications technologies, and human capital PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY
8 SMES, especially in developing economies, to take best advantage of this process This report
summarises the background reports prepared for this conference The main messages emerging from the preparatory
work for the conference incorporated in a series of background reports, are synthesised here. The first four
sections below summarise the material relevant to the four main Ministerial workshops â Entrepreneurship and SME innovation
â Tools for SME innovation â SMES in the global economy â Enhancing the role of SMES for development
The final two sections summarise work relating to two sets of issues which cut across many of the other conference
Entrepreneurship and SME Innovation Fostering entrepreneurship and firm creation Entrepreneurship and firm creation generate jobs, â€
The creation of new businesses and the contraction or exit of less productive firms are key elements in the
dynamism of modern economies. New firms attract resources to new activities, and when they prosper and are
able to grow rapidly, they generate significant numbers of new jobs. Empirical work at the OECD indicates that entry of
importance of ensuring that the business environment is conducive to rapid expansion of young, especially
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY innovative firms once they establish themselves. There is
competition in order to survive, particularly in younger and high-technology industries where competitive pressure and firm churning are high.
improvements in the economy as a whole. While in the short term cost reductions and increased competitive pressure can lead to job shakeouts,
economic growth and rising living standards †and provide social benefits Governments have recognised increasingly the contribution that â€oesocial entrepreneurship†can make to
Many countries operate specialised entrepreneurship schemes to assist target population groups. Such schemes need to be designed carefully
environment conducive to entrepreneurship and enterprise creation Creating a business environment conducive to entrepreneurship and enterprise creation in which
innovative young firms have scope to expand rapidly once they have established themselves requires a broad range of
mutually reinforcing and supportive policies. Many of these affect the economy as a whole but impinge importantly on
potential entrepreneurs and SMES. These include sound fiscal and monetary policies, which are essential to provide
a basis for a stable macroeconomic environment. They also include structural policies that determine the overall
economic framework in which the business sector operates such as those affecting labour markets, tax design competition, financial markets and bankruptcy laws.
The  OECD 2004 9 PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 10 way these structural policies affect enterprise creation and
small businesses should be taken into account in their formulation stages Regulatory and administrative burdens on small
businesses should be kept low There is considerable evidence that regulatory and administrative burdens can impinge adversely on
entrepreneurial activity. Legal entry barriers should obviously be avoided unless their benefits are very clear since (according to a World bank study2) they appear to be
associated with less private investment, higher consumer prices and greater corruption. Employment regulation which the World bank finds is generally more flexible in
advanced countries than in developing economies, limits management flexibility and leads to smaller firm size and
less research and development as well as less investment in technology Barriers to exit may also discourage entry, since exit
in entrepreneurship and creativity are preferred the 2. World bank, Doing Business in 2004: Understanding Regulation WASHINGTON DC, 2003
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY instruments for encouraging entrepreneurial behaviour in societies, and evidence suggests that such programmes can
have an impact on entrepreneurial activity and enterprise performance. However, in spite of the numerous initiatives launched and implemented in recent years, a number of
entrepreneurship is integrated not sufficiently into educational curricula or integrated into national long-term economic strategy and planning;
concept of education and training for entrepreneurship; and both more data and more evaluation and assessment of
Entrepreneurship and SME policies also have an important local dimension. Indeed, facilitating increasing rates of enterprise creation is an almost universal concern
for local authorities who seek to accelerate development or reverse decline in localities, whether disadvantaged or
New enterprises can procure a range of benefits that contribute to local development, including: rises in employment and incomes
enhanced provision of services for consumers and businesses; and possibly, demonstration and motivational effects. Determinants of rates of enterprise creation at the
local level include demographics, unemployment, wealth the educational and occupational profile of the workforce the prevalence of other small firms and infrastructure
environment to address policy and market failures that dampen entrepreneurial activity and limit the scope for
programmes and support policies for small enterprises which may be complex and involve scarce resources. Many
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 12 of these programmes and policies are designed and
entrepreneurial business environment. Policy design in areas such as competition, the regulatory framework, the tax system, labour markets, financial
markets and bankruptcy laws should take account of the way these areas impinge on SMES and innovation in knowledge-based economies
â Ensure the reduction and simplification of administrative regulations and costs which fall disproportionately on SMES.
Integrate entrepreneurship at all levels of the formal education system and ensure access to information, skills and expertise
relating to entrepreneurship via â€oelifelong learning†programmes for the adult population. Promote the diffusion of training programmes by stimulating the private
market†s supply of such services and providing hands-on focused courses â Integrate the local development dimension into the promotion of entre
entrepreneurship are of paramount importance and should be defined and co -ordinated with central governments, as appropriate for each country
and entrepreneurship are realistic in terms of cost and are designed to deliver measurable results. An evaluation culture should be developed to ensure that programmes are systematically
activity and the entrepreneurial environment in each country  OECD 2004 PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY
†and based on evidence to the degree that this is possible It would be highly desirable
Fostering women†s entrepreneurship Women†s entrepreneurship is potentially an important source of growth†Women†s entrepreneurship has increasingly become
recognised as an important source of employment and potential growth. Indeed, data are very scarce, but estimates
indicate that there are more than 10 million self-employed women in Europe (both European union countries and others).
women in developing economies. Furthermore, as women behave differently from men, their entrepreneurship provides society with different, and often innovative
solutions to management and organisational problems as well as to the exploitation of new opportunities †but this source
is untapped largely However, women still represent a clear minority of entrepreneurs nearly everywhere (Figure 1). Furthermore
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 14 Figure 1. Female employers and own-account workers
Selected APEC economies, 1998 Â OECD 2004 PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY
The empirical basis for informed policy design needs to be improved†Reliable data and analysis relating to women†s
entrepreneurship are scarce and provide little empirical basis for policy design. Definitional issues complicate data
different stages in this process (e g. opportunity identification opportunity exploitation and fund-raising. Depending on the nature of those obstacles, only certain types of women
will enter into business and succeed. Currently, the general picture is still based on cross-sectional samples, even if both
influence entrepreneurship. These relate to the political context, institutional framework, family policies, market forces and the suitability of particular individuals, in terms of
Specific obstacles to greater entrepreneurship by women include inappropriate educational background, lack of role models, the gendering of entrepreneurship, weak social status
competing demands on time †notably associated with family responsibilities †and limited access to finance
Progress can be made by removing obstacles to female participation in the labour force, â€
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 16 specifically. Such policies are part of the wider package of
economic and social arrangements in any economy and there is no simple relationship between such policies and
Economies in transition and the Nordic countries, for example, have some of the best provisions for working women but do not stand
out as having high levels of female entrepreneurship. However family-friendly policies allow more flexibility to manage
and entrepreneurship contribute more effectively to encouraging more equal opportunity between men and women, these should incorporate a women†s
Support for women†s entrepreneurship should not be confined to government policies and programmes. Women
both within economies and internationally to support the diffusion of knowledge and experience within the private
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Tools for SME Innovation Financing for innovative SMES
capital is a major obstacle to SME expansion High administrative costs and uncertainties about future performance often make financing SMES unattractive
entrepreneurship generally will have benefits in terms of women†s entrepreneurship â Listen to the voice of women entrepreneurs.
The creation of government offices for women†s business ownership is one way to facilitate this.
entrepreneurship is taken into account at the design stage â Promote the development of women entrepreneur networks.
sources of knowledge about women†s entrepreneurship and valuable tools for its development and promotion.
in a global economy â Periodically evaluate the impact of any SME-related policies on the success of
role of women entrepreneurs in the economy. This requires strengthening the statistical basis for carrying out gender-related cross-country comparative analyses
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 18 capital. First, the returns to innovative activities are highly
entrepreneurship and finance. This involves ensuring the availability of entrepreneurial, technical and managerial expertise to the providers of finance and engaging investors
business angel networks and business incubators †and not to a lack of funds This has important policy implications.
the well-developed venture capital market in the United States has benefited from federal funding for many years
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY accessing finance are most acute (Figure 2). It should also be
international capital markets can make. Where capital markets are developed not well, especially in developing countries, accessing finance
Figure 2. Venture capital investment, 1999-2002 Percentage of GDP Note: 1998-2001 for Australia, Japan, Korea and New zealand.
The definition of private equity/venture capital tends to vary by country Source: OECD Venture capital Database, 2003
0. 80 0. 70 0. 60 0. 50 0. 40 0. 30 0. 20 0. 10
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 20 Basle II agreement on innovative SMES and on SMES in
providing risk capital or limit international investment in venture capital they should be reviewed with a view to
easing or eliminating them Key policy recommendations â Concentrate policies for promoting availability of risk capital to innovative
require finance, particularly for small-scale investment. Regional and local equity initiatives (e g. regional funds) are
investment. Such equity programmes should be created in parallel with the development and support of regional and local business angel networks as well
as business incubators â Increase the managerial and technical expertise of intermediaries whose role is to evaluate
developed capital markets can draw on the expertise of countries with well developed stock markets. Access to liquid international stock markets and an
investment community that has expertise in venture capital-backed initial public offerings avoids the need to create new institutions
investors to invest in risk capital or barriers to flows of foreign venture capital funds should be reviewed with a view to reducing,
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Recognition and measurement of intangible assets should
access through markets for goods, services, intellectual property rights and human resources. They must also participate in networks, particularly those that nurture the
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 22 †and geographically concentrated clusters of
and social returns on public and private investment result from physical or cultural proximity that encourages human
of universities and knowledge-intensive services in cluster Figure 3. Types of innovative networks 1. Belgium, Denmark, France, Germany, Ireland, Italy, Netherlands, Norway
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY development, the regional attractors of knowledge -intensive foreign direct investment, and the governance
structures and means of evaluating cluster initiatives SMES must understand and take advantage of the intellectual
game†but all must be aware of the opportunities and constraints created by the intellectual property system
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 24 Key policy recommendations â Improve SMES access to information about networking opportunities.
This will require co-operation among all stakeholders †including SME associations, public agencies and intermediary organisations †to correct deficiencies in existing
sources of information. Strengthen international linkages between national and regional hubs of relevant information flows
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY SMES in the Global economy Facilitating SMES€ access to global markets
Globalisation offers SMES opportunities†The globalisation of business has drawn increasingly SMES into global value chains through different types of
the opportunities that this process offers and gaining access to global markets has become a strategic instrument for
small businesses can offer a host of business opportunities such as larger and new niche markets;
SMES with large investments in intellectual property †and poses challenges But globalisation can also pose challenges and threats
expose them to heightened international competition from foreign firms, and may result in the loss of traditional
markets to lower-priced competition from overseas Challenges and threats may concern the following: standards
and some nonmember economies is that of a low, although increasing, level of activity by SMES in international
-operation (APEC) economies suggests that SMES account for less than 30%of total exports in the region. 3
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 26 â In Europe, exporting activity rises with firm size.
share of medium-sized enterprises engaged in exporting is more than twice that of micro-enterprises. 4
â US experience suggests that exporting SMES often confine their efforts to one market â A 2001 survey of European enterprises showed that
around one-third of SMES report an increasing number of international business contacts, ranging from 30%for
micro-enterprises to 50%for medium-sized enterprises. 5 â Few SMES invest abroad. A recent survey showed that only
ventures in other countries. 6 Governments should reduce barriers to access to global markets, â€
direct investment which can serve as a vehicle for SMES to access international markets indirectly by joining the supply
chains of multinational enterprises. Indeed, foreign direct investment is often an efficient way to diffuse technology and
better business methods to SMES and enhance their international competitiveness †especially non-tariff barriers
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY across borders. This applies especially to access to information
advisory services, markets and regulation, and dispute resolution processes. This will require active collaboration among governments, international agencies and the private
and to develop products and services geared to high-growth nascent and existing entrepreneurs Promoting e-business adoption by SMES
â Promote the role that foreign direct investment can play as a vehicle for SMES
supply chains of multinational enterprises, and their resultant (indirect involvement in exporting activity can lead to significant diffusion of technology
and more efficient business models, thereby raising the international competitiveness of SMES â Encourage the smooth,
requirements, advisory and support services for SMES and dispute resolution procedures â Enhance incentives for new public-private partnership initiatives that would
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 28 business-to-business interact ion and real-t ime
communication can reduce information asymmetries between buyers and sellers and build closer relationships among trading partners.
communication, often providing customers with better service and allowing their needs to be monitored more accurately, facilitating new product development.
or lack of incentive to change business models unless returns are clear. But SMES also face generic barriers to
environments that facilitate e-business and the use of more complex applications of information technology. Governments should target programmes to overcome market failures to the
and competition in network infrastructure should continue and be strengthened, †Rollout and use of quality infrastructure at affordable
use of broadband services require policies that: promote effective competition and continued liberalisation in infrastructure, network services and applications across
different technological platforms; encourage investment in new technological infrastructure, content and applications and ensure neutrality across competing and developing
 OECD 2004 PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY technologies to encourage interoperability and innovation
and to expand choice. Public financial assistance to expand coverage for under-served groups and remote areas could
complement private investment where appropriate provided it does not preempt private sector initiative or inhibit competition
Figure 4. Internet penetration by size class, 2001 or latest available year Percentage of businesses using the Internet1
1. In European countries, only enterprises in the business sector, but excluding NACE activity E (electricity, gas
and water supply), NACE activity F (construction) and NACE activity J (financial intermediation), are included The source for these data is the Eurostat Community Survey on enterprise use of ICT.
In Australia, all employing businesses are included, with the exception of businesses in general government, agriculture forestry and fishing, government administration and defence, education, private households employing staff
and only includes enterprises with NZD 30 000 or more in turnover. Switzerland includes the industry, construction and service sectors
OECD, ICT database and Eurostat, Community Survey on ICT usage in enterprises 2002, May 2003
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 30 †and digital content, including increased use
services, should be stimulated Digital products, information services and interaction with government in areas such as procurement, regulatory
compliance and tax offer SMES important potential efficiency gains and marketing opportunities. While the potential
contribution of e-government is significant, the private sector must play the key role in providing content.
-border co-operation among all stakeholders is necessary to reach these goals. Of particular relevance for small firms are
Whereas large enterprises can afford specialised staff, SMES must often rely on the qualifications and training of their general workforce.
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Key policy recommendations â Move beyond policies for basic connectivity and ICT readiness to facilitate more
infrastructure and promote broadband competition and liberalisation in network services and applications. Where the needs exist,
and without preempting private initiative or inhibiting competition, complement private investment with public financial assistance to expand coverage for under-served groups and
remote areas â Strengthen the infrastructure for trust, security (including spam and viruses privacy and consumer protection.
-operation between stakeholders and the development of rules with cross-border application â Develop and distribute digital content,
government services to enterprises should be used as a tool to improve efficiency of government interactions and operations with SMES
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 32 Enhancing the Role of SMES for Development
economies need to strengthen their capacity to take advantage of trade and investment opportunities Recent assessments of growth recognise an
understanding that an important influence on the rate at which countries grow is their ability to integrate with the
global economy through trade and investment. Enterprises in transition and developing economies face major challenges in strengthening their human and institutional
capacities to take advantage of opportunities in these areas While governments make trade and investment policies, it
is enterprises that trade and invest. Therefore, supply-side bottlenecks in the trade and investment areas and the way
in which governments, development partners and the private sector itself address these constraints have direct
implications for the economic growth potential of transition and developing countries SMES have an important role
in contributing to development and poverty reduction Most enterprises in transition and developing countries are SMES.
These firms typically account for more than 90%of all firms outside the agricultural sector, constitute a major
source of employment and generate significant domestic and export earnings. In the poorest countries they nevertheless
make up a relatively small part of the economy, contributing less to employment and output than the informal sector
Figure 5). An important policy priority in low-income countries is to facilitate the creation of SMES in order to bring
the poor into the formal sector, where they participate in markets and can engage in higher value-added business
policies that contribute to healthy business environments conducive to enterprise creation and growth; the ability of
SMES to implement competitive operating practices and business strategies; and capable public and private institutions.
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY development and poverty reduction strategy of transition
â Dialogue and partnerships between the stakeholders (public sector, private sector and civil society) foster ownership of
markets require substantial investments in sustainable development of institutional and physical infrastructure and service delivery to SMES in all areas,
partnerships between stakeholders about implementation and review of supportive measures, particularly, those related to capacity building in private sector service
M. Ayyagari, T. Beck and A. Demirgã c-Kunt, â€oesmall and Medium Enterprises across the Globeâ€, World
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 34 Trade and investment capacities of SMES
must be strengthened SMES must be able to respond quickly and efficiently to international market signals to take advantage of trade and
investment opportunities and reap the benefits of the international trading system. This means they need to be
investment capacity. Business support agencies (including financial institutions) must be oriented customer and have a demonstrated ability to deal with the SME sector.
services, both public and private (e g. provision of market product and process information, accounting, market
analyses and research, legal advice, transport, express delivery and advertising â Develop a national strategy for export development and
involves participation by all key stakeholders. The overall objective should be to increase the volume and value of
investment to local SMES should be maximised The potential benefits of foreign direct investment to
host economies include sources of external capital technology and knowledge transfer, job generation, skills enhancement and enterprise development through linkages
and spillover effects. These include backward linkages with suppliers, forward linkages with customers, linkages with
 OECD 2004 PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY competitors who set new standards
and necessitate greater efficiency, and linkages with technology partners. A programme to strengthen linkages between foreign direct
investors and local SMES would include â Improving the flow of information about potential local
enterprises and about supply opportunities to potential suppliers through the development of a national Web site
â Working closely with multinational enterprises by inviting them to help potential suppliers to a) understand
have good opportunities to supply, and c) draw attention to weaknesses they must overcome in order to succeed
enterprises and potential suppliers â Helping SMES that have the potential to supply multi -national enterprises to identify their needs and then to
access the public and private support services they need â Offering some form of monetary incentive to multi
-national enterprises and local SMES to participate in the linkage programme. This could include contributing to
the salary costs of engineers and managers in multi -national enterprises which devoted time to supplier
upgrading (Singapore; cash grants to promising suppliers to help with initial investment costs (Ireland; and
subsidized training and consultancy necessary for enhancing supplier capability (Chinese Taipei â Developing capacity building programmes that include
trickle down effects, including to micro-enterprises as lower-tier suppliers  OECD 2004 35
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 36 Governments in advanced economies should promote policy
coherence and greater effectiveness of development assistance Finally, overall policy coherence is essential for the
investment capacity building in transition and developing economies. These have to go hand in hand with market
access and improved policy co-ordination among donors Key policy recommendations â Embed strategies toward the private sector and SMES in countries†broader
and enterprises able to provide information on markets and standards, advice on strategies, and access to technology and innovation coupled with appropriate
support whole of government approaches so that trade and investment policies and standard setting are aligned with development co-operation objectives and policies
benefits and opportunities for developing countries â Maximise the spillover of management skills and knowledge from multinational
enterprises to local SMES. Spillovers of knowledge and management skills to local firms are one of most critical benefits of foreign direct investment for host countries
Support policy frameworks and multinational enterprise behaviour that facilitate such spillovers and better document real-world cases to increase public
understanding of the contribution of foreign direct investment in progression of development  OECD 2004
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY Evaluation of SME Policies and Programmes Systematic
evaluation is an essential element of a well-designed SME policy framework A recurrent theme in the work summarised here is the
â€oecross Cutting Review of Government Services for Small Businessesâ€, Department of Trade and Industry, September 2002, URN 02/1324
Tax agencies (support services) 81 Department for Environment, Food and Rural affairs grants, advice, in kind support) 3 120
Department of Transport, Local government and Regions and agencies 107 EC and EIB 246 Favourable tax treatment
Enterprise Investment Scheme) 2 590 Total 7 932 as a per cent of GDP)( 0. 8
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 38 SME policy makers should develop an â€oeevaluation
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY delivering the programme. Their detailed knowledge of the
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 40 Towards More Systematic Statistical Measurement of SME Behaviour
entrepreneurship. Deficiencies are apparent at two levels â The underlying statistical base which provides the factual
the creation of new firms, the growth of existing firms or promoting enterprise among target groups in the population
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY â Available high-quality empirical analysis, notably cross
economies should be involved in this work where possible â Develop an integrated business statistical register. This requires that countries
introduce a single identification number for enterprises, so that data from different sources can be matched. It also requires that policy makers address
of policies on enterprise performance and growth as well as differences across OECD countries  OECD 2004 41
PROMOTING ENTREPRENEURSHIP AND INNOVATIVE SMES IN A GLOBAL ECONOMY 42 â It is desirable to contain costs at statistical agencies and
example women†s entrepreneurship, barely exist But there is scope for improvement As part of the preparation for the Istanbul Conference
numbers for enterprises and their use to link data more efficiently, and greater use of administrative sources of data
e g. tax, chamber of commerce), can only be taken in capitals and in several cases involve issues (e g. confidentiality
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