Technical and Marketing Support Systems for Successful Small and Medium-Size Enterprises in Four Countries

Studies of successful and medium-size enterprises (SMEs) and their marketing and technical support systems were undertaken for Colombia, Indonesia, Japan, and the Republic of Korea. Three to four subsectors were examined in each country. The sample worldwide amounted to 445 firms. Mechanisms to support export marketing varied across countries and subsectors. How they varied depended greatly on whether SMEs operated within well-developed private networks. When market penetration begins, transaction costs are high and collective marketing support can be important. As markets thicken, initiatives by foreign buyers become more important. Generally the most effective collective marketing support was of the kind that can be provided more effectively by decentralized organizations - such as industry associations or local governments and chambers of commerce (support firms' participation in trade fairs, for example) - than by central government institutions. Private mechanisms were more important than collective mechanisms for helping firms improve their technological capability. Demand for collective mechanisms tended to be greater when technological requirements of production were complex or when the endowments of private technological networks in certain countries or industries were weak. Broad-based collective technical support facilitates the emergence of an information-rich environment for firms, and may be worth pursuing in many settings. Examples of such support include: 1) sponsoring courses in specialized topics; 2) facilitating the use of expert consultants (either directly, by making a consultant available to a broad array of firms, or indirectly, by providing financial support for the use of consultants); and 3) promoting information-sharing among firms. Countries that already have strong broad-based collective support and that are moving into technologically more advanced activities might consider high-intensity support, but should proceed with caution