enabling enterprise environments

ENABLING ENVIRONMENTS FOR PRO-POOR ENTERPRISE

Until very recently the main focus of pro-poor enterprise development has been on the small-scale and micro-enterprise sectors. Initially the emphasis was on direct promotion of the sector itself through a combination of credit, training and a wider range of Business development Services. Since the mid-1990s however attention has increasingly focused on how the economic, legal and social environments can be made even more conducive to expansion and development of the small-scale sector. This is partly because of evidence of limited impact of many earlier small-scale industry development programmes and projects in contrast to the rapid expansion of small-scale enterprises in response to environmental changes. More recently, largely because of the increasing strength of gender lobbies within governments and aid agencies, attention has begun to focus on how women's specific needs and interests can be mainstreamed within economic and social policies for enterprise.

In these debates it is possible to distinguish two competing paradigms which have dominated donor debates. Although there is a broad consensus on the development potential of small-scale enterprises and the importance of an enabling environment, there are disagreements about some aspects.

• The main aims of small enterprise development in the context of economic development as a whole.

• Definitions of the small-scale sector and characterization of different types of enterprise.

• What is meant by environment and categorization of different levels of environment, generally referred to as micro-level, meso- or sectoral level, and macro-level, and their relative prioritization in policy intervention.

• Approach to gender , being the ways in which gender issues have been (generally rather belatedly) inserted into male/mainstream arguments.

Neo-liberal Market Paradigm

Emphasises small-scale growth-oriented enterprises based on a Western model of individualist entrepreneurship to increase their contribution to market-led economic growth. The desirability and nature of growth itself is unquestioned.

Women’s entrepreneurship development is promoted mainly on the grounds of efficiency and contribution to market growth, which entails a downplaying of constraints on women’s enterprise.

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Interventionist Poverty Reduction Paradigm

Focuses on poverty alleviation and socially responsible growth, but shifts uneasily between policy relevant to growth-oriented small business and policy to address problems of very poor self-employed and workers in the informal sector.

In relation to gender, although comprehensive proposals for gender mainstreaming have been produced by gender lobbies and staff, MSE policy continues to treat gender issues as a special case requiring attention and entailing extra costs, rather than an integral part of mainstream policy and budgets.

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FRAMEWORK FOR PR0-poor enterprise development

Both pro-poor growth and gender equity require a three-pronged approach:

• Firstly reform, and if necessary, removal of the policies which support implicit and explicit advantage for powerful vested interests of Northern economies, large business and men.

• Secondly specifically targeted and adequately-resourced support for poor entrepreneurs, particularly poor women and women in poor countries to challenge previous and current discrimination and neglect.

• Thirdly, reform of mainstream policy to incorporate the needs of all parties. In relation to gender it requires incorporation of women's needs and interests in currently 'malestream' policy and reinforcement of men's family responsibilities. It requires explicit consideration of the needs of poor women and poor countries.