Technology Support for Small-scale Industry in Developing Countries: A Review of Concepts and Project Practices

The paper is a review of approaches towards institutional technology support for small-scale manufacturing enterprises in developing countries since the early 1970s. Early programmes tended to suffer from a number of weaknesses, stemming from a limited conceptualization of technology and an inadequate understanding of the role of the small-scale sector in industrial development more broadly. There was also a lack of practical experience with project implementation. However, in recent years important advances have been made on all these fronts. Four features of recent technology assistance programmes that have tended to be associated with success are discussed, and illustrated with evidence from different projects. Broadly, successful projects: (a) embrace the notion that durable competitiveness of small producers in a competitive economic environment requires that they develop internal capabilities to effectively assimilate, use and adapt product and process technologies; (b) are demand-driven; (c) target the assistance to groups of producers with common interests and problems, and help them to organize themselves in collective bodies that can evolve into self-help institutions; and (d) include appropriate incentive structures based on market principles.