Kiraka, Ruth, N.(Informationsbüro Wirtschaft und Entwicklung (IBWE), 2009)
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Abstract:
Small and medium enterprises (SME) are viewed as a key driver of economic and social development in the African
context. They represent a large number of businesses, generate a relative large proportion of employment and are
widely considered to be vital for a country’s competitiveness. To be competitive, they need one key ingredient: innovation.
However, they are often unable to develop appropriate and innovative products due to a general lack of
financial strength as well as technical and managerial skills. A part from that, they operate in an environment with
multiple challenges: On the macro level, these include bureaucratic legal and regulatory frameworks, poor physical
infrastructure, and a multiplicity of taxes. On the meso level, the challenges include inadequate support in terms of
business training and skills, the unavailability of information on markets, suppliers and partners, a limited access
to finance as well as weak, fragmented and uncoordinated institutions supportive of SME.
Nevertheless, opportunities for investing in SME development are given, they include the commercialisation of SME
innovations, the provision of resources to SME so that they are able to conduct research and market testing, business
incubation, the funding of indigenous knowledge development and transfer, the development or rejuvenation
of industry clusters, and the establishment of SME support centres
These initiatives can enhance SME competitiveness, create more opportunities for employment and economic development
and address a number of the challenges listed above.
International development agencies (IDAs) operate in a context of diverse stakeholder interests. This requires
them to consider the significance of each category of stakeholders to determine the level of interest and power to
influence the operations of the IDA. Using interviews and mail questionnaires, fifty-six Australian-based IDAs
were examined to determine the extent to which they perceive external stakeholders as influencing their work.
The research showed that two categories of stakeholders – donors and governments, were considered the most
influential and powerful, hence the need to give priority to their expectations and needs. The “weaker”
stakeholders – development clients and partner agencies, had a high level of interest but low power of influence
over IDAs. However, they legitimise the existence of IDAs, hence their needs cannot be overlooked. The
challenge for the IDA is in balancing the needs of its different categories of stakeholders as ignoring some could
result in undermining its credibility.