Small enterprise approaches to employment

External evaluation covered the period FY78-9/88. The implementing agency, Michigan State University (MSU), performed impressively. A significant amount of high-caliber research was produced, and as a result, A.I.D., the academic community, other donors, and developing countries possess more information on the role of Third World small enterprises and how best to assist them. The project"s most important output was a state-of-the-art paper which was widely distributed and has had a major impact on the development community"s thinking about small enterprise. Applied research was conducted in five countries - Bangladesh, Indonesia, Peru, Zambia, and Egypt - one more than was originally planned. Work in this area helped to refine the thinking of the MSU team on the role of small business and policy/project design. Lessons from in-country research were consolidated in special studies on credit programs and subcontracting. One of these studies, on the subsector approach to small enterprise analysis, emerged as an important and unexpected contribution to the field. Due to the wide diversity of small enterprises, subsector analysis proved to be an important method of gaining accurate information about certain types of firms and planning solutions to their problems that go beyond the standard credit and TA programs. In general, however, both MSU and A.I.D. neglected to follow up on ideas put forth in the special studies. Moreover, while research results were widely disseminated in working papers and academic journals, MSU did not organize the dissemination workshops called for in the scope of work. A major lesson learned is that universities can excel at informing project and policy design and in articulating promising new approaches. However, in this case, MSU"s research resulted in only one specific project, indicating that the implementation of these ideas may best be carried out by other entities.