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

Posted: 20 Apr 2016

See all articles by Brian Levy

Brian Levy

World Bank

Albert Berry

University of Toronto - Munk Centre for International Studies

Motoshige Itoh

University of Tokyo - Faculty of Economics; National Bureau of Economic Research (NBER)

Linsu Kim

Korea University - College of Economics and Commerce

Jeffrey B. Nugent

University of Southern California - Department of Economics

Shujiro Urata

Waseda University-Graduate School of Asia-Pacific Studies

Date Written: November 30, 1999

Abstract

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.

Suggested Citation

Levy, Brian and Berry, Albert and Itoh, Motoshige and Kim, Linsu and Nugent, Jeffrey B. and Urata, Shujiro, Technical and Marketing Support Systems for Successful Small and Medium-Size Enterprises in Four Countries (November 30, 1999). World Bank Policy Research Working Paper No. 1400. Available at SSRN: https://ssrn.com/abstract=636173

Brian Levy

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Albert Berry (Contact Author)

University of Toronto - Munk Centre for International Studies ( email )

Toronto, Ontario M5S 3E6
Canada
416-946-8932 (Phone)
416-946-8915 (Fax)

Motoshige Itoh

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Linsu Kim

Korea University - College of Economics and Commerce ( email )

Anam-dong, Sungbuk-Ku
Seoul, 136-701
Korea

Jeffrey B. Nugent

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States
510-740-2107 (Phone)
510-740-8543 (Fax)

Shujiro Urata

Waseda University-Graduate School of Asia-Pacific Studies ( email )

1-21-1 Nishiwaseda
Shinjuku-ku, Tokyo 169-8050
Japan

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