JICA Research Institute

Research

Effects of SME development assistance: A case of the networking project of the business development services providers in Thailand

Past Research Projects

Small and medium enterprises (SMEs) account for a large portion of domestic economic countries regardless of developed or developing countries. They contributes to poverty reduction through the creation of employment and an increase in income. However, they are vulnerable to external shocks due to the limited management resources such as human and physical capital, fund, and information, and unable to expand their production and number of workers, which is called by missing-middle problem. Under these circumstances, non-financial support to the enhancement of technology, renewal of product design, or marketing, called Business Development Service (BDS), has increasingly received attention. JICA has so far supported the development of institutions of BDS and capacity building of BDS providers for the purpose of improvement of managerial and technical ability of SMEs. This study take a case of a project conducted in Thailand from May 2013 to May 2016, named “Project for Enhancing Regional Integrated SME Promotion Mechanism in the Kingdom of Thailand." This project installed a general consultation counter at a regional branch of Department of Industrial Promotion, Ministry of Industry of Thailand, and built the networked of BDS providers in a province to improve the quality of BDS and promote its usage. This study quantitatively analyses whether networking of BDS providers increases the demand of SMEs for BDS and leads to the improvement of SMEs' performance through promoting information sharing among BDS providers and decreasing the transaction costs of BDS.

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