According to the Chairman of an international Round Table that took place in Bonn (Germany) from 7 to 9 February, the requirements for successfully promoting entrepreneurship and enterprise development may be summed up in three themes: competence, reliability and dialogue. All of them can be brought together into a national strategy for enterprise development, said the Chairman, Lutz Hoffmann, President of the German Institute for Economic Research.
The Round Table was organized by the Development Policy Forum of the German Foundation for International Development with the support of the German Government and UNCTAD. Fifty-five government officials, entrepreneurs and business organization officials, from 24 countries, and representatives of 8 international organizations, participated. They discussed the respective roles of governments and of the private sector in developing a strategy for enterprise development, particularly in developing countries, in the context of globalization and liberalization.
On the government side, competence means the ability to understand the role of enterprises in development and to design the right policies and a strategy for enterprise development, including the provision of hard and soft infrastructure. Reliability implies the development of a transparent, stable and predictable policy and commercial framework for enterprise development. This includes sound fiscal, monetary and trade policies, a clear, stable and easily adaptable legal framework, an impartial and readily accessible judicial system, an intellectual property protection system, a well-functioning financial infrastructure, a minimum of regulations combined with an efficient bureaucracy and a transparent and moderate corporate tax structure. Reliability also implies the timely and adequate implementation of policies and laws adopted.
On the business side, competence means the ability to use the resources, including the environment, efficiently in order to create jobs and to raise living standards. Reliability implies the development of dependable support services for firms, including through inter-firm networks, such as in the areas of training and information. It also implies playing a responsible role towards employees, consumers and shareholders.
Dialogue between the government and the private sector is needed in order to develop a coherent strategy for enterprise development. The participants in the Round Table saw UNCTAD IX, which will be held in South Africa from 27 April to 11 May, as a unique opportunity for governments to review together their experiences with enterprise development and dialogue with the private sector, and to draw their conclusions as to how these processes might be improved in their own countries.
On the question of the role of government it was noted that policies for enterprise development are both of macro and micro nature and have both international and national dimensions. Macro-policies to promote stability through high interest rates or to promote competition through trade liberalization can be damaging for small and medium-sized enterprises (SMEs); careful tuning and timing of such policies is thus necessary. SMEs are particularly important in creating jobs, promoting innovation, creating a flexible industrial base, contributing to export development and in fighting poverty. Therefore, within an overall policy framework for enterprise development, specific SME policies may be needed in order to enhance their access to finance, information and technology, as well as to government procurement. The need for the reconversion or renovation of SMEs in order to make them export-oriented, as well as for paying particular attention to women entrepreneurs and micro-enterprises in the informal sector, was also stressed.
In developing countries where public/private sector dialogue has already been developed it has proved to be effective for the development of a strategy for enterprise or industrial development. Such a dialogue can serve a number of objectives: create transparency and a climate of confidence; enhance the enterprise culture in government; exchange information and obtain feedback for policy development; identify industrial priorities and the measures needed to move ahead; and allow SMEs to provide inputs on policy-making on matters that affect them. A dialogue may be organized on a functional basis in connection with business regulations or structural adjustment measures, or on a sectoral basis in the light of industrial priorities.