OECD Ministers recognise policy evaluation as key to supporting innovative SMEs
Ministers and representatives from 64 countries gathered in Istanbul, Turkey, for an OECD (Organisation for Economic Cooperation and Development) ministerial conference on 4 and 5 June, all seeking the answer to one question: which tools really work in terms of stimulating the growth of innovative small and medium sized enterprises (SMEs)? Delegations clearly benefited from hearing what other countries have found to be successful - examples include clustering, tax exemptions, government provision of risk capital, assistance in getting the first export contract, and encouraging new companies to visit trade fairs. While attendees undoubtedly benefited from this anecdotal evidence of what has worked for others, there was strong support for the idea that the key to finding the right policy tools is an effective evaluation procedure for those already in use. For this reason, the Istanbul Ministerial Declaration, adopted at the end of deliberations, recognises that 'an important theme cutting across this discussion is the need to build a culture of evaluation in which programmes and policies are systematically reviewed in order to strengthen and improve those that should be retained.' The Declaration was described by Herwig Schlögl, the Deputy Secretary-General of the OECD, as a 'consensus document'. 'I am well aware that some delegations feel that their priorities have not been included, but this is a consensus document, and as you know, a consensus means a compromise.' The document represents a summary of the ideas and case studies discussed throughout the conference. The document outlines the best set of public policies that will foster the creation and rapid growth of SMEs as being: stable macroeconomic policies; regulatory frameworks that take into account the needs of SMEs and their integration into the formal sector; and a system that supports the development and diffusion of new technologies, notably by strengthening the science-innovation interface. Other tools recognised as effective include SME assistance and development programmes, and policies that contribute to mobilising human resources. Participants recognised that priorities vary according to a country's stage of development, institutional arrangements and political context. But they still found a number of themes that were recognised by all as being of particularly high importance. These include the need to: reduce barriers to SME access to global markets; improve access to financing for SMEs; develop an evaluation culture; and ensure that policy makers are able to make decisions based on empirical evidence. Many participants emphasised that while access to finance is important, it is often not the main barrier to SME growth. Several attendees, including Jonathon Ortmans, Director of the Kauffmann Foundation Commission on Global Entrepreneurship, spoke of the acceptance of failure as 'one of the cultural advantages that the US has.' He added: 'There is no doubt about it, entrepreneurship involves failure.' David Storey, Director of the Small Business Centre at the University of Warwick in the UK had some advice for policy makers, which he bases on years of observing policies aimed at supporting SMEs. 'Ministers have policies for everything but what is important is whether they work,' he said. His recommendation is that they should 'do less, better; and not more, worse.' Policy makers should be able to answer four questions about their policies, he said: Are they clear and coherent? Do they have clear objectives? What are the targets? Are they being evaluated? 'If you don't have evaluation, you're kidding yourself that you're achieving your objectives,' Dr Storey added.