Business Development Services for Micro, Small, and Medium Enterprises (MSMEs) in Nigeria.

Similarities and differences between Business Development Services in industrialized countries and developing countries and countries in economic transition can be found. The main similarity is that the large majority of Micro, Small, and Medium Enterprises access Business Development Services from the private sector – either formally or informally. Studies carried out in a number of developing countries show that one of the most important sources of business services for Micro, Small, and Medium Enterprises are their suppliers and clients, as well as larger firms with which they have established subcontracting arrangements. Approximately five per cent (5%) of Micro, Small, and Medium Enterprises access business services provided by government agencies and Non-Governmental Organizations. Another similarity is the infrequent use of consultants, the main difference being that accountants are generally used by Micro, Small, and Medium Enterprises in industrialized countries. However, the main difference between industrialized countries and developing countries is that Micro, Small, and Medium Enterprises in industrialized countries make a greater use of formal business development services. Furthermore, the average educational level of owners of Micro, Small, and Medium Enterprises in industrialized countries is generally higher than that of developing countries and emerging economies. These higher educational levels facilitate a more effective use of available services, especially those with a literacy requirement – such as many forms of training.

There are more sources of information in industrialized countries than in developing countries. Thus, entrepreneurs in industrialized countries are quickly informed about new technological changes, market trends, etc. This can help the entrepreneurs to make quick adjustments in the enterprise and maintain their competitive edge.

MSMEs in Industrialized Countries.

In contrast to Micro, Small, and Medium Enterprises (MSMEs) in developing countries (like most African Countries), those in industrialized countries are generally considered as equal players with the larger ones. They are associated to the larger enterprises through a dense web of linkages, which significantly increases the inter-dependence between all sizes of enterprises. These strong linkages facilitate further access by Micro, Small, and Medium Enterprises (MSMEs) to a wide range of services. Furthermore, Micro, Small, and Medium Enterprises are well represented in private sector organizations and can play an important role in decision-making within these organizations. On the other hand, these linkages are still weak in developing countries, and few Micro, Small, and Medium Enterprises (MSMEs) are members of private sector organizations.

In industrialized economics, many large equipment manufacturers and suppliers of raw materials and intermediate inputs are aware of the importance of the Small, and Medium-Scale Enterprises (SMEs) market, and are active in responding to demand for capital goods, services and inputs from this market. In developing countries, large enterprises are less responsive to this market for reasons not clearly established. Thus, Micro, Small, and Medium Enterprises are frequently obliged to depend on suppliers of expensive imported equipment or sub-standard second-hand equipment. Furthermore, maintenance and repair services are not easily available for this type of equipment.

Education and Broader Membership for MSMEs.

Investment in education by both governments and the private sector should promote a new breed of better-educated entrepreneurs capable of competing with their counterparts in industrialized countries, and capable of using new information and other technologies in their business. Promoting more use of new information technologies and the facilities provided by the Internet for e-commerce or for accessing all types of information of interest to Micro, Small, and Medium Enterprises is also essential.

In expanding the role of the private sector in Business  Development Services provision in Nigeria, private sector organizations should promote a broader membership base to increase the representation of Micro, Small, and Medium Enterprises. They should take measures to strengthen, expand and diversify linkages between all sizes and types of enterprises. Larger firms should be encouraged to review their current strategy for growth to determine whether such strategy pays sufficient attention to possibilities for expanding and strengthening linkages with Micro, Small, and Medium Enterprises, and improving the business performance of their “smaller” (MSMEs) business partners.