Realising the potential of services SMEs in developing economies.

South Africa - 21 November 2017

The development of services sectors in least-developed countries (LDCs) and low-income countries (LICs) has the potential to generate economic growth, raise incomes and reduce poverty rates. Small and medium-sized enterprises (SMEs) play a key role in this quest given their ability to not only react quickly to rapidly changing market conditions, which have come to characterise much of the global economy, but also to disperse economic gains more widely throughout the domestic economy than their larger counterparts. This paper examines the critical role that SMEs play in the services sector, investigates the primary supply-side constraints that limit their increased participation in the economies of LDCs and LICs, and outlines various policy options which could boost SME participation, productivity and competitiveness in the services sectors of the world’s most vulnerable economies.

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