Before choosing a particular form of intervention, a BDS practitioner should carry out a thorough needs assessment. An assessment provides insight into the constraints and opportunities in the targeted area and gives the practitioner the information needed to determine the appropriate BDS activities. There are a variety of techniques and methodologies available for assessing small enterprise constraints and opportunities. They include:
Note: These tools need not be used exclusively—they can and should be combined to ensure that the situation is fully described and understood.
Sub-sector analysis looks at vertically integrated groups of enterprises (large and small) that deal with the same product. It is based on a growing consensus that BDS programs cannot be effective if they limit their focus to small-scale producers alone. These producers are part of a larger market system that includes input suppliers, producers using different technologies, wholesale and retail distributors, transportation and finance companies, exporters, etc. Numerous commercial relationships must occur between all of these actors before the raw materials can be transformed into a finished product and delivered to the consumer. Sub-sector analysis looks at all these actors and their relationships and this is what enables the practitioner to identify the constraints and opportunities that can be addressed by particular BDS strategies.
A major tool used in sub-sector analysis is a map describing the links between firms that operate in the same industry, but use different market channels. For example, a furniture map might show one set of links from a national forest to wood cutters, then to sawmills, wood wholesalers, small-scale carpenters, and finally to rural and urban low-income consumers. A branch of that marketing chain could lead from the small-scale carpenters to upholsterers, urban shops and, finally, high-income consumers. Another may go from sawmills to a large company that cures wood and makes furniture for export. By examining these different market channels, a practitioner can identify constraints, opportunities, and the appropriate BDS strategies to use.
For additional information, see:
• “A Field Manual for Sub-sector Practitioners”, (Hagblade & Gamser, GEMINI, 1991). www.pactpublications.com
• “Beyond Credit: A Sub-sector Approach to Promoting Women’s Enterprises” (M. Chen, Aga Khan Foundation
Canada, Ottawa, 1996).
Participatory Rural Appraisal (PRA) offers a set of practical tools to help development agents and program participants identify problems and assess and select relevant solutions. Some techniques include:
• Resource mapping in which participants draw community maps with relevant and available resources.
• Seasonal mapping in which participants describe seasonal trends that affect their work and lives.
• Network maps in which participants draw links they have to external individuals and resources.
• Ranking exercises in which participants rank their status, the importance of problems, or preferred solutions.
When targeted to SEs in a given community these tools can be helpful in developing BDS programs. The underlying principle behind PRA is that local people possess more knowledge about their situation than external experts and that the role of the researcher is to bring that knowledge to bear on identifying and solving key problems.
For more information, see:
Chambers, Robert, “Whose Reality Counts: Putting the Last First” (Intermediate Technology Publications, London 1997) www.itdgpublishing.org.uk
These surveys provide useful background data on such areas as:
• The number of SEs in a country and the number of people employed.
• The geographic, sectoral, size, and gender distribution of firms.
• Growth trends in the sector and in different groups within the sector.
• Indications of major constraints affecting the growth of firms.
Although not specific enough for the selection and design of particular services, these surveys can help BDS practitioners focus in on promising sectors. It should be noted, however, that these surveys require a significant investment of time and resources (~$250,000 for a national survey in a small country). For good examples of general surveys, see the GEMINI series of microenterprise surveys available from Pact Publications.
These tools, evolving in conjunction with the promotion of the "Market Development Paradigm", are used to analyze existing markets for business development services and to identify services and service providers that can be targeted for development. Tools include the use of focus groups as well as more sophisticated applications of consumer market research. More information on these tools can be found at:
• “Assessing Markets for Business Development Services: What have we learned so far?” SEED Working Paper No.
28 January 2002 (Alexandra O. Miehlbradt) www.ilo.org/seed
• “A FIT Manual: Guide to Market Assessment for BDS Program Design” April 2001 (Alexandra O. Miehlbradt)
• “A FIT Manual: Guide to Market Assessment for BDS Program Design” April 2001 (Alexandra O. Miehlbradt)
www.ilo.org/seed
• “Applying Marketing Research to BDS Market Development” (Alexandra Miehlbradt, Ronald Chua)
• “Applying Marketing Research to BDS Market Development” (Alexandra Miehlbradt, Ronald Chua)
www.ilo.org/public/english/employment/ent/papers/mkt-res.htm
• “The Application of Market-Led Tools in the Design of BDS Interventions (or Influencing the Price of Soup in
• “The Application of Market-Led Tools in the Design of BDS Interventions (or Influencing the Price of Soup in
Clusters are composed of small enterprises that are in the same sector of activity, or share common characteristics such as geographic location, gender, and/or ethnicity. They may be groups of similar or varying sized firms.
Clusters can be used to identify BDS activities. A facilitator, usually a non-profit organization, identifies isolated businesses in high-potential markets and brings them together in meetings or offers some kind of initial service, such as training or a trade show. If groups or networks already exist, a facilitator may approach them about strengthening their capacity to produce more or better products, to market their products, etc.
The facilitator usually studies the strengths and weaknesses of the businesses and the opportunities and constraints of the marketplace, and then engages the entrepreneurs in a dialogue about their own perceptions regarding opportunities and constraints. The group identifies problems that can be resolved by joint action and/or the implementation of a particular BDS strategy.
For more information, readers can consult:
• “SME Cluster and Network Development in Developing Countries: The Experience of UNIDO”, G. Ceglie, M. Dini,
Donors Committee Conference in Rio, Brazil, 1999. www.sedonors.org click on “BDS Materials at the ILO web
site.”
• “Cluster Development and BDS Promotion: UNIDO’s Experience in India” (M. Clara, F. Russo, M Gulati, Hanoi
This approach puts less emphasis on preliminary analysis and more on a learning process approach. It is based on the premise that the best way to identify constraints and opportunities is to develop in-depth relationships with the enterprises one is working with and to learn from them in an incremental fashion.
For more information, readers should consult:
“The Wheels of Trade – Developing Markets for Business Services” (M. Hileman, J. Tanburn, IT Publications, London