SME Upgrading: Barriers to Growth for Small Enterprises
Building on existing enterprise surveys and own qualitative field studies we studied development trajectories of graduating firms. We explored the hypothesis that access to and absorptive capacity for knowledge about business models, markets, and technologies is the most binding constraint for micro-enterprises.
Project description
Necessity entrepreneurship and informal employment are increasing in all developing regions, even when economies grow at decent rates. The productivity gap between micro and large firms increases, indicating a strong segmentation of factor markets. Also, only very few micro-firms manage to graduate into the group of fairly productive and formalised medium- and large-sized firms. Those firms that are large usually started big or graduated from specific groups of entrepreneurs (immigrants, professionals and other elite groups).