Argentina - Small and Medium-Sized Enterprises in Argentina : A Potential Engine for Economic Growth and Employment
The convertibility law, and economic liberalization in the early 1990s in Argentina, brought about dramatic changes in economic performance. To adjust to increasing globalization, and a series of external shocks, small and medium size enterprises (...
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| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2002/08/2007083/argentina-small-medium-sized-enterprises-argentina-potential-engine-economic-growth-employment http://hdl.handle.net/10986/15360 |
| Summary: | The convertibility law, and economic
liberalization in the early 1990s in Argentina, brought
about dramatic changes in economic performance. To adjust to
increasing globalization, and a series of external shocks,
small and medium size enterprises (SMEs) were confronted
with the task of developing business strategies to secure
their niches in the new arena. However, such strategies were
obstructed by constraints in the legal, and economic
framework, weak information and technology aspects, and
insufficient access to finance. The report builds on the
following issues: 1) the critical aspect of the SME sector
to the Argentine economy, both from a growth/efficiency, and
equity standpoint; yet on average, SMEs have failed to
attain their potential; 2) the highly heterogeneous
configuration, particular organizational, and technological
characteristics of SMEs; 3) the high degree of institutional
rigidity of the country's business environment; 4) the
need to develop policy actions to deepen financial markets
for SMEs; 5) the significant knowledge constraints - by and
large, no training nor technical assistance services are
available, mainly because of high costs; 6) the striking
multiplicity of SME programs, yet with uncertain impact;
and, 7) the need to overhaul SME policies, and programs to
prod more incentive- and demand-driven approaches. Elements
for effective SMEs assistance programs include the
development of a standard set of metrics to measure
performance of SMEs, and, entrepreneurial management, deemed
of critical importance. As well, cost recovery growth should
be targeted, extensively using follow-up techniques, and
leveraging their effectiveness through the use of
information, and communications technology. Most
importantly, the policy challenge lies in taking initiatives
to develop institutions at the national, and local levels,
to encourage transition from inward-looking firms, narrow
search routines, and information-poor markets, to
learning-oriented firms, and mature, information-rich markets. |
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