Constraints of growth-oriented enterprises in the southern and eastern African region

In its efforts to promote the creation of quality jobs within the small- and medium-scale enterprise sector, the Regional Project Office for the International Labor Organization's (ILO) Start and Improve Your Business (SIYB) program in Harare, Zimbabwe has undertaken two studies aiming to find out what growth-oriented enterprises look like and how the ILO can assist them in their aspirations to grow. This article presents the key findings from the latter of these two studies. It identifies constraints of growth-oriented enterprises and what they subsequently need to grow. Constraints to enterprise growth and subsequent needs to overcome them are identified in the following areas: access to finance, financial management, market orientation and competition, human resources, enterprise environment, physical infrastructure, policies and regulations, and information and networks.

Key words: SME, enterprise growth, constraints, ILO/SIYB Through the Start and Improve Your Business (SIYB) program, the International Labor Organization (ILO) has been providing business management training to budding and existing entrepreneurs in the micro-, small- and medium-scale sectors since the early 1980s. In 1999, the Harare regional project office of ILO/SIYB initiated a research project to learn more about growth oriented enterprises and ways in which the ILO may assist them. The motivation to undertake this study came from a number of impact assessments performed by the regional project office concerning its activities in southern and eastern Africa. The findings showed that the ILO/SIYB program was much appreciated and in virtually all aspects attained and even surpassed its indicators of achievement. Job creations, in new as well as existing enterprises, were higher than anticipated. However, the regional project office thought it might be possible to have an even greater impact on job creation. The ILO is not just concerned with creating jobs, but in the creation of quality jobs. Thus, the regional project office wanted to increase the number and quality of jobs.

Since the decision to study the character and needs of growth-oriented enterprises was made in May 1999, two studies of growth-oriented enterprises have been undertaken by the regional project office. The intention was to gain a better understanding of the problems that these kinds of enterprises encountered so as to be able to develop an intervention that could assist them in creating more and better jobs. The first study primarily sought to find out how growth oriented enterprises could be identified (Trulsson, 1999). The second study was an inquiry into the constraints encountered by growth-oriented enterprises in the process of growth. This article focuses on the findings from the latter study, and incorporates findings from a literature survey as well as fieldwork. The results reported are specific to the target group for which the ILO/SIYB program seeks to develop a new business management-training product. To what extent the results may be applied to growthoriented enterprises in general, or whether the constraints of these ventures are different from those of other enterprises, has not been addressed in this study.

Constraints of growth-oriented enterprises in the southern and eastern African region Journal of Developmental Entrepreneurship, Oct 2002 by Trulsson, Per To learn more about this author, visit Journal of Development Entrepreneurship's Website.

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