Field Report Series

The identification of small and medium businesses (SMBs) as a target for development policy is a comparatively recent phenomenon. It is clearly linked to the realization in developing countries that large capital-intensive industries which formed the basis of earlier development policies had failed to provide the hoped-for engine of growth. Only in the 1970s, as planners realized the mismatch between Western large-scale technology and local factor endowments, and as urban unemployment became an increasingly pressing problem, did attention turn to smaller scale and more labour intensive enterprises to provide possible solutions.