SMALL BUSINESS - THE MYTHS AND THE REALITY

The essence of the article is that small enterprise development efforts in many countries, should avoid commonly accepted fallacies and benefit from contemporary research finding as well as cross country experiences. The process should be looked at as a strategic effort where the policy frame is set as a response to identifiable constraints or barriers that impair the process of entry into business, continuity with the business functions and, eventually, decline or exit out of business altogether. The starting point is an analysis of common elements of misunderstanding or 'fiction' within contemporary policies. Those are contrasted with findings drawn from contemporary research and country experiences. Both the 'facts' and the 'fiction' relate to entrepreneurial initiative, the contribution of small enterprise to employment, productivity, the added value of training, the entrepreneurs' business focus, learning and technological complexity, their role in export growth and the workings of the capital market. This is followed by an examination of the managerial barrier to small business development. Attention was first paid to specific barriers related to the managerial behaviour of the entrepreneur or the small business owner i.e. the dark side of his managerial behaviour, the slow learning and limited innovation, the vague notion of the long term, the selective approach to training and the limited ability to manage financial resources. Looking towards the future and considering the demands of the following decade, a few proposals are put forward. At the individual level are issues such as the strong side of the entrepreneur, the need for lower entry and survival barriers, for more incubators, for broader forms of entrepreneurship and for a richer enterprise culture. © 1990.