SME Competitiveness: The Power of Networking and Subcontracting

There is increasing evidence that both large-small and small- small firm linkages are important in Latin America. The challenge for policy in this area is to understand the source of potential payoff to increased inter-firm co-operation, the contexts which facilitate it, and the instruments that induce it.

Suggests best practices for inter-firm co-operation involving SMEs as:

• Support for local and international fairs;
• Support for relevant business associations;
• Practically orientated support for large-small linkages;
• SME network support programmes;
• Support for education and training institutions and other types of infrastructure which could contribute to potential or actual groups of SMEs;
• Encouragement of ME suppliers through public sector purchasing;
• Subcontracting exchange;
• Collection and organization of information on the important SME sectors, relationships among firms, the leaders in each sector and region, and programme monitoring.