220

Notes

1 Introduction

1. For more discussions on this, see for example, Tambunan (1994), Liedholm and Mead (1999), and Berry et al. (2001).

2. MIEs are the smallest size categories of firms, mainly self-employment units, and they are the most traditional units within the group of SMEs. That is why in many literature and official reports, MIEs are discussed/presented separately, not included in defining SMEs.

2 SME Development Pattern: A Theoretical Consideration

1. A number of authors used these categories of conditions in analyzing SMEs, such as Tambunan (1994) and van Dierman (1995).

2. Anderson and Khambata (1981) also point out the importance of growing cash markets generated by the growth of agriculture or rural incomes for the high rates of growth of small and larger sized establishments of industry.

3. In addition, see also other countries’ studies from Banerji (1978), and Liedholm and Parker (1989). Banerji’s study indicates that at a higher level of economic development the larger sized enterprises become more important than the smaller ones. Liedholm and Parker’s study shows that in some African countries total employment in MIEs and SEs, especially in the one person size category, has been increased over time, though the increase was less rapid than that in MLEs, which tended to shift the relative balance of manufacturing employment from MIEs and SEs toward MLEs.

4. See also classical works from Chenery (1986), Chenery et al. (1986), and Syrquin (1989) for their studies and their provided evidence of this “structural transforma-tion” of production within the manufacturing sector in many countries.

5. See Tambunan (2006a) for literature discussion. 6. It is also discussed in Chuta and Liedholm (1985), Mead et al. (1990), and

Tambunan (1994). 7. For literature discussion, see Tambunan (2006c). 8. Authors such as Anderson and Khambata (1981), Page and Steel (1984), and

Suarez-Villa (1989) argued that it is rather the urban SMEs than the rural ones that may have more opportunities to grow. In other words, in urban areas or cities SMEs may be growing while their rural counterparts are declining or stagnating.

9. See, for instance, Piore and Sabel (1983; 1984) and Harvey (1990).10. In their interpretation, the first industrial divide occurred during the nineteenth

century with the emergence of mass production, and the second industrial divide has occurred in the late twentieth century with the reemergence of craft indus-tries (Piore and Sabel, 1984).

11. See Tambunan (2006a) for literature survey on this matter.12. All classical studies on economic development patterns from works such as Chenery

(1979), Chenery and Syrquin (1975) and Chenery et al. (1986) provide a wealth of evidence to support this proposition. It can be said that there are also “inferior intermediate goods”, which means that the higher the level of development the

Notes 221

lesser industrial demand exists for these goods, for example, bamboo versus stone for buildings or houses.

13. Ho (1980; 1986), Sandesara (1988), Uribe-Echevarria (1991a; b), and Tambunan (1994; 2006a) also discus the possible negative effects of the growing integration between rural and urban economies on rural SMEs. This theory can also be used in analyzing the likely effects of trade and investment liberalization, which closely integrates domestic with the global economies, on domestic SMEs.

14. The effects of increase in income in rural areas or in agriculture in particular on the dynamic of SMEs in rural non-farm sectors are also discussed in studies such as Mellor (1976), Bell et al. (1982), Siamwalla (1982), Hazell and Roell (1983), Mellor and Johnston (1984), Harriss (1991), and Tambunan (1994; 2000; 2006a).

3 Recent Development: An Overview

1. Schmitz and Nadvi (1999) provide some good examples of advanced export- oriented clusters in other developing countries including shoe manufacturing in Brazil, India, and Mexico, surgical instruments in Pakistan, and garments in Peru.

2. Their work, among other material used for the Vietnam case in this chapter, is part of a report for the ERIA Related Joint Research of SME Project, IDE-JETRO, 2007–8, in which the author of this book was also member of the team for the Indonesian case. The report has been published internally and is edited by Hank Lim (2008).

3. According to the Department of Industry in 2005, as explained in Cuong et al. (2008), most SMEs are located in residential areas and they formed about 97 percent of all manufacturing enterprises in HCMC. Together their employees counted for 931,000 people, or around 35.8 percent of total labor force in HCMC. In all, manufacturing SMEs form an important economic category in HCMC.

4. See, for instance, Wiboonchutikula (1989; 1990; 2000; 2001), Chirathivat and Chantrasawang (2000), Bakiewicz (2005), Allal (1999), Akrasanee et al. (1986), Berry and Mazumdar (1991), Chiemprapha (1993), ILO (1993), Muller (1993), Wattanapruttipaisan (2002a; b), Tambunlertchai et al. (1986), TDRI (1990), OSMEP (2002), and Kecharananta and Kecharananta (2007).

5. Her work, the only material used for the Philippines case (since there are no other good and recent literature available and no national data which can be publicly accessed) in this chapter, is part of a report for the ERIA Related Joint Research of SME Project, IDE-JETRO, 2007–8. The report has been published internally and is edited by Hank Lim (2008).

6. His work, used for Cambodian case in this chapter, is part of a report for the ERIA Related Joint Research of SME Project, IDE-JETRO, 2007–8. The report has been published internally and is edited by Hank Lim (2008).

7. The MoC is unable to provide a detailed breakdown by industry or comprehen-sive data on employment and output of these locally licensed enterprises. Such information would be very useful to policymakers in order to understand better the informal sector, which comprises such a large portion of Cambodia’s eco-nomic activity and employment (DCI, 2003).

8. His work, among other material used for the Lao case in this chapter, is part of a report for the ERIA Related Joint Research of SME Project, IDE-JETRO, 2007–8. The report has been published internally and is edited by Hank Lim (2008).

9. Her work, the only material used for the Chinese case in this chapter (as no other written literature in English are available), is part of an internal report for the ERIA Related Joint Research of SME Project, IDE-JETRO, 2007–8, which has been published internally and is edited by Hank Lim (2008).

222 Notes

10. His work, among other material used for the Indian case in this chapter, is part of a report for the ERIA Related Joint Research of SME Project, IDE-JETRO, 2007–8. The report has been published internally and edited by Hank Lim (2008).

11. As a logical consequence, SE promotion has continued to remain an important and integral part of Indian development strategy since much before the First Five-Year Plan, dating back to 1938 when the National Planning Committee documents were being prepared. The concerted policy emphasis upon small firms as a vital vehicle of progress draws upon this sector’s crucial historical role in generating substantial employment and income at the regional level and acting as a shock absorber during periods of economic crisis (Das, 2008a).

12. One lakh = 100,000 (0.1 million), and one crore = 10 million = one hundred lakhs.

13. For example, Ahmed (2001b; 2004), ADB (2001b), and USAID (2001).

4 Export Performance and Effects of Trade Liberalization

1. It is widely accepted that for SMEs (as for LEs too) to succeed on the export front they must have some way to lower production or to increase efficiency and quality of their products. Berry et al. (2001) suggested that subcontracting with either LEs or trading companies is one route. Berry and Levy (1999) reported that in Indonesia subcontracting arrangements were common among SME exporters in rattan, furni-ture and garments. They argue that the growth of export of SMEs in these manufac-turing subsectors no doubt reflects a rapidly increasing importance of subcontracting arrangements, mainly with commercial intermediaries.

2. For more discussion on this issue, see Urata (2000) and Tambunan (2006b). 3. The institutions have jointly undertaken three surveys of Vietnamese SMEs

since the early 1990s. The first of these surveys, undertaken in cooperation with International Labour Organization (ILO) in 1991 and focusing on SME opera-tions in 1990, covered the operations of about 900 non-agricultural enterprises in Hanoi, Ho Chi Minh City, Haiphong, and five rural provinces, including Ha Tay and Long An. In 1997, a new survey was undertaken, covering the three major cities and two of the rural provinces, Ha Tay and Long An. This time the survey covered about 750 enterprises including all the surviving enterprises from the five provinces. The survival rate between 1990/2 and 1996/7 was only 36 percent, so additional enterprises were drawn from the relevant populations to create a sufficiently large sample in the new survey. The third survey, conducted in 2003 with the active participation of the Institute of Economics, Copenhagen University, included the five provinces from 1996/7, as well as two additional rural provinces, Phu Tho and Quang Nam. Data from this third survey were used by Long (2003) mentioned in the text before.

4. According to this yearbook, among SEs private economy in China is nearly about 70 percent. The contribution of private economy to total export of the country was about 3.6 percent in 2005. Total SE contribution to total export is estimated at nearly 5 percent (Xiangfeng, 2008).

5. Some of the best known are Krueger (1978), Dollar (1992), and Kruger et al. (2000).

6. This is in line with general theory in which size is predicted to affect export performance of firms positively. The new international trade theory posits a posi-tive impact of market size in view of economies of scale. It argues that the scale economy provides costs advantages in production, Research and Development (R&D) and marketing efforts. See, for instance, Tybout (1992) and Bonaccorsi

Notes 223

(1992) for a survey. The literature associated with export marketing, on the other hand, suggests that LEs have greater resources to gather information on markets in foreign countries and to cover uncertainties of a foreign market (see, e.g., Wakelin, 1997). It is, therefore, as a general hypothesis, that LEs, not SMEs, are likely to be more export-oriented.

7. This is generally supported by the econometric results. See, for example, Aggarwal (2001) and Tybout et al. (1991).

8. See further, Tybout’s review. (2000). 9. Indonesia has long been a major supplier of raw rattan to the major rattan fur-

niture exporting countries of Taiwan and the Philippines. In an effort to “jump-start” the rattan products industry in the country, the Indonesian government imposed this restriction policy (Berry and Levy, 1994).

10. Interview with Mr. Daniel Suhardiman, Group Manager from PT Panasonic Manufacturing, Indonesia.

11. For discussion on the government programs to support SMEs in Indonesia, see, for instance, Sandee (1995), Hine and Kelly (1997), Sato (2000a), Sandee et al. (2002), and Dierman (2004).

5 Competitiveness and Transfer of Technology

1. According to Jang (2007), in the present knowledge based economy, Schumpeter’s definition can be rephrased as a new combination of knowledge. So, he argues that there must be some relationship between the types of knowledge, that is, codified and tacit knowledge (both analytical and synthetic) and types of innova-tion, that is, product and process. As stated in Fagerberg et al. (2004), another way to classify innovation is to focus on its process. In this manner, he classifies inno-vation as “radical” or “incremental”. In the European Community Innovation Survey (ECIS), innovation is defined as the successful introduction of a new or significantly improved product and process. The ECIS also distinguishes “true” innovations and imitations. A “true” innovation is the introduction of a product which is new both to the enterprise and to the market. Imitation refers to the introduction of products which are new only to the enterprise, not to the market (Florence and Pain, 2005). Innovations, however, can also be non-technological such as organizational change, marketing-related changes and financial inno-vations (OECD, 1997a; b). In manufacturing industry, innovations are mainly technological ones actually commercialized or implemented by firms. In Florence and Pain (2005) it is stated that innovation is distinct from invention. This strict definition emphasizes that innovation requires much more than greater inputs into the research process. Fixed capital investments are often necessary to be able to produce and utilize new products and processes, as are workforce training and organizational restructuring. Because of these required different activities, Romer (2005) argues that an innovation process is rarely linear.

2. See also, among others, Feinstein (2006), Fleming and Marx (2006), Florida (2002; 2005), Jones (2005), Phelps (2007), and Yusuf et al. (2003).

3. More empirical studies shown in Knorringa and Weijland (1993), Sandee et al. (1994), Sandee (1994; 1995), Dierman (1997), Tambunan (1994; 2000; 2006a; b, 2007a; b), Sandee and ter Wingel (2002), Supratikno (1998; 2001; 2002a; b).

4. See for example, Liedholm and Mead (1999), and Berry and Mazumdar (1991). 5. The analysis is based on data from the Manufacturing Industries Survey conducted

by DOS covering 22 years, 1982–2003. SMEs in 11 manufacturing subsectors were chosen for the purpose of analysis, which include (a) food, (b) beverage and tobacco,

224 Notes

(c) textiles, wearing apparel and footwear, (d) wood-based, (e) plastic products,(f) rubber-based, (g) chemical industry, (h) metal products, (i) non-metallic mineral products, (j) electrical and electronics, (k) transport equipment.

6. The most common approaches define technology as a collection of physical processes that transform inputs into outputs and the knowledge and skills that structure the activities involved in carrying out these transformations (Kim 1997, p. 4), or as stated in Rosenberg and Frischtak (1985) that technology is a quantum of knowledge resulting from the accumulated experience in design, production and investment activities that is retained by individual teams of specialized personnel. This knowledge is mostly tacit and often (is) not made explicit in blueprints or manuals.

7. See, for example, Cohen and Levinthal (1989), Kim (1995), Nelson and Pack (1999), Yusuf (2003), and Hsueh (2006).

8. See, for example, Kim (1997), Thee (2005), Yusuf (2003), Iman and Nagata (2002) and Saggi (2002) for a survey of literature.

9. See, for example, Banga (2003), Bende-Nabende et al. (2000), and, recently, a review of the empirical literature on FDI determinants by Blonigen (2005).

10. See also, for example, Rajan (2005), Palit (2006), and Palit and Nawani (2007).11. See, for example, Hobday (1994), Mans (1996), and World Bank (1996).12. See, for example, Berry and Levys (1994), Schiller and Martin-Schiller (1997), and

Sandee et al. 2000).13. This is the author’s own case study, part of a research series on SME in Indonesia,

Center for Industry and SME Studies, University of Trisakti.14. This type of subcontracting system has also been widely used, especially in

rural areas, in some Asian developing countries such as Indonesia, Lao PDR, Cambodia, the Philippines and Thailand. There are, however, no clear statistics of the number of subcontracted home-based workers in these countries. Probably because it is not always easy to observe or simply because it is more interesting to speak about or to study subcontracting between factories. In Thailand, for instance, according to Thongyou (2001), the Department of Labor Welfare and Protection estimated that in 1995 there were approximately 11.2 million home-based workers in Thailand. This accounted for almost 33 percent of the total labor force which was 43.2 million. The type of the industry which employed home-based workers differed by region, thought the system seems to be most popular in textile, garment and wood-product industries. According to a study by Koedpon and Jearanaipriprem in 1995, cited in Thongyou (2001), in Bangkok, home-based subcontracting system was most popularly used in wood-product industry. Food-processing was ranked first in the southern part of the country, and textile was ranked first in the northeastern region.

15. See also, among others, UNCTAD (1998; 2000; 2001), Regnier (2000), Tambunan (2000), and Altenburg (1999).

16. As stated by Iman and Nagata (2002), in the current domestic Indonesian market, KI occupies the first rank with a 40 percent share of sales and plays an indispensa-ble role in the localization of production. KI also fulfils a crucial role in Komatsu’s international business strategy, it serves as a construction machinery production base along with Komatsu’s facilities in the US, Brazil, Germany, and the UK, and conducting global sourcing with other production bases.

17. KI, as many other LEs, requires its subcontractors to be a PT (Limited Liability Company) not a CV (a Limited Partnership not involving a legal person and personal assets are liable for obligations).

Notes 225

18. KI, as many other LEs, requires the use of ISO standards even if the workshop is not officially certified.

19. The two interviewed inti subcontractors, PT Prima Karya (PK) and PT Karya Padu Yasa (KPY), said that past reputation and personal network were also critical factors for their successful bid to become subcontractors. However, they have insisted that the opportunity to become KI subcontractors was open for every workshop in the cluster as long as they can prove themselves capable of meeting the quality requirements required by KI. KI has periodically opened competition for new inti.

20. Cheap labor and relatively small, shifting job orders reduce incentives for them to specialize or acquire expensive machinery to increase productivity. As one seasoned metal worker explained, the strength of the plasma workshop is the flexibility to cater to smaller orders. However this flexibility becomes a liability to capacity development when workshops have to address many small orders and do not develop specialization that leads to expanded command of technology.

21. Owner of a plasma subcontractor for KPY, one of KI’s inti, explained that his company received useful technical coaching as part of a quality control process conducted upon delivery of his product to KPY. In a case of knowledge spillover, his firm applied some of these technical lessons not only to his subcontracting operations, but also to the production of retail market goods.

6 Development Constraints

1. The Financial Executives Institute of the Philippines (FINEX) and Ateneo Center for Research and Development (ACERD) study, cited by Aldaba, identified the following factors that prevent SMEs from acquiring the necessary technology or engage in their research and development: (1) lack of funds: technology includ-ing the machinery embodying the technology is expensive and many SMEs do not have the equity to acquire them. Lacking in flexibility, loans are not viable. Financial institutions rarely offer long-term financing for SMEs. There are no available loans for R&D; (2) insufficient information: the access of SMEs to infor-mation such as developments in product standards and scanning technology (assessing, quantifying, testing technology) is very limited due to their inadequate e-readiness; ICT is not optimally utilized, particularly e-commerce. Another reason is that government institutions are not regarded as reliable sources of information and lack of information sharing among SMEs, (3) lack of skills in evaluating alternative technologies: weak technical skill competencies of produc-tion people due to the overall low-level quality of education and inability of the educational system to respond to the needs of the economy; (4) difficulty in meet-ing government requirements for availing assistance: government procedures and requirements for incentives like tax exemptions for R&D equipment and availing of loans for technology commercialization are found to be too complicated and tedious. Government institutions providing support for business and technology are also poorly staffed and their knowledge well below the required level.

2. The World Bank’s report on doing business in 2006 (cited in Cuong et al., 2008) ranked Vietnam 104 out of 175 countries in terms of ease of doing business.

This is discussed more detail in ADB (2005). 3. As a result of these difficulties in obtaining land, residences are also used for the

production and business purposes. Also as a result of the difficulties in obtaining land legally, there is a significant land market operating unofficially and illegally (Long, 2007).

226 Notes

4. Bailey (2008) identified two main problems leading to poor SME financial reporting. First, managers often lack skills to prepare even basic financial state-ments. Second, the financial reporting required by legislation is complex and provides little incentive for SME owner/managers to develop or improve their financial reporting abilities. According to Bailey, many SME owners do not know how to keep records of accounts. This is related to the fact that very few Cambodians receive more than a basic education, seldom including rudimen-tary bookkeeping skills. As cited in his study, a survey of 300 Cambodian SMEs conducted by the SME Sub-Committee shows that almost no SME has access to accounting or bookkeeping training. Few SMEs have access to, or know how to use computers with accounting software. Hiring an accountant is close to impossible for an SME, partially due to the lack of trained accountants in Cambodia, but mainly because of affordability.

5. According to Bailey (2008), this latter area is very serious, as the state of human and physical capital is considered a major constraint to Cambodian SMEs’ abilities to compete with their counterparts in neighboring countries. Many Cambodian companies use old and inefficient machines, increasing their production costs. This also constrains SMEs’ abilities to upgrade the quality of their output. The typically low quality of goods produced by Cambodian SMEs is also due to low quality inputs and limited production knowledge. Many SME owners are unaware of current technology, how to use it, or how to access it. Standard education is rudimentary and there is little in the way of formal training. On-the-job training is very limited and typically very basic in Cambodia. The World Bank reports, cited in Bailey (2008), that in 2003 nearly 97 percent of the country’s manufactur-ing workers were unskilled and less than a quarter of Cambodian firms provided formal training to workers. There is also no diffusion of production technology to SMEs via market channels and government assistance is not extensive enough to compensate for the lack of SME production knowledge.

6. For example, Balasubrahmanya (1995), Das (2001; 2003; 2005a; b; c; 2006, 2008a; b), Das et al. (2007), Goyal et al. (2004), Mohan (2003), Sahu (2005), and SIDBI (2000).

7. See, for example, Sandesara (1993), Balasubrahmanya (1995), and Morris and Basant (2006).

8. Hossain (1991, 1998), Ahmad et al. (1998), Ahmed (2001a; b), Bakht (1998), Jahangir (2001), and Moazzem (2006).

9. See, for example, FAO (1997), Maskey (2001), Maskey and Manandhar (2001), ILO (2002; 2003; 2005), and Khanal and Dahal (2008).

10. See also, among others, UNCTAD (1998; 2000; 2001), Regnier (2000), Tambunan (2000), and Altenburg (1999).

7 Women Entrepreneurs in SMEs

1. See also, for example, Patel (1987), Vinze (1987), Saleh (1995), Lalitha (1996), Finnegan and Danielsen (1997), Charumathi (1998), Dhillon (1998), Lakshmi (1998), Matiur-Rahman et al. (1998), Prasad (1998), Taylor (1998), Tiwary et al. (1998), Shayamalan (1999), Soundarapandian (1999), Finnegan (2000), Das (2000), Raju (2000), Sasikumar (2000), Kantor (2001), Seymour (2001), Walokar (2001), Dhameja et al. (2002), Goheer (2003), Sharma and Dhameja (2002), Ganesan (2003), Giovannelli et al. (2003), and Sinha (2003).

2. See, among others, Patel (1987), Das (2000), Lalitha (1996), Rajivan (1997), Matiur-Rahman et al. (1998), Prasad (1998), Taylor (1998), Tiwary et al. (1998),

Notes 227

Shayamalan (1999), Soundarapandian (1999), Raju (2000), Sasikumar (2000), Seymour (2001), Walokar (2001), Sharma and Dhameja (2002), and Sinha (2003).

3. Social Watch is an international network informed by national citizens groups aiming at following up the fulfilment of internationally agreed commitments on poverty eradication and equality.

4. Thus, for example, a country where both boys and girls have equal access to university studies would rank 100 in this aspect, and a country where both boys and girls are equally unable to complete primary school would also rank 100. This is not to imply that the quality of the education should not be improved. It just says that boys and girls suffer from the same lack of quality. Education is the only component in the index where many countries have actually reached par-ity level. When parity is achieved no further progress is possible. But beyond the fact that many countries do not progress, the GEI education component reveals that too many of them are regressing. In the two other dimensions, related to women’s integration into economic and political life, no country shows com-plete parity yet.

5. See also other studies, for example, Lalitha Rani (1996), Walokar (2001), Gillani (2004), Sharma and Dhameja (2002), and Ganesan (2003).

6. Including Walokar (2001), Goheer (2003), Sinha (2005), Sharma and Dhameja (2002), and Ganesan (2003).

7. See, for example, Rani (1996), Lakshmi (1998), Sharma and Dhameja (2002), and Sinha (2005).

8. See, for example, Finnegan and Danielsen (1997), Charumathi (1998), Tiwary et al. (1998), Shayamalan (1999), and Dhaliwal (1998).

9. As observed by Sinha (2005), women’s businesses are not well represented in industry, trade or business associations. Both the leadership and the member-ship of chambers of commerce, business, traders and industry associations tend to be dominated by male entrepreneurs, and few women entrepreneurs join or reach leadership positions in the mainstream business organizations. Although partly a reflection of the low number of women entrepreneurs, it means that the different needs of women entrepreneurs do not feed into policymaking through the lobbying and other activities of these organizations. Many specialist organi-zations of businesswomen often do not counter this situation because their activities tend to be oriented toward charity and social work, in contrast to the business networking and policy lobbying orientation of the “mainstream” but more male-dominated organizations.

10. See also other studies on women entrepreneurs in the region, for example, Lalitha (1996), Dhillon (1998), Lakshmi (1998), Prasad (1998), Soundarapandian (1999), Das (2000), Sasikumar (2000), Dhameja et al. (2002), Goheer (2003), and Ganesan (2003).

11. See other studies, for example, Planning Commission (1990), Begum (1992), ILO (1995), Quddus et al. (1996), DCCI (2000), and ADB (2001d).

12. As a result, women entrepreneurs are educationally less equipped to manage their businesses, which makes them potentially less capable of success. Such disadvan-tages affect their capacity to access formal sources of credit, technical support as well as government small business programs (Sinha, 2005).

13. Data presented in the table refer to national literacy estimates from censuses or surveys conducted between 1995 and 2005, unless otherwise specified. Due to differences in methodology and timeliness of underlying data, comparisons across countries and over time should be made with caution. For more details

228 Notes

about methodology, data used and other technical specifications, see UNDP (2008).

14. However, although this traditional thinking still exists in rural society, it depends on the economic condition of the family as well as education level of the parents or husbands. The better the economic condition of the family or the better the education of the parents/husbands, the less influence traditional thinking has on their attitudes toward women.

229

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257

Index

Afghanistan 144, 147Africa 21, 24, 25Agglomeration 18, 106Agra 86, 121Agrarian economies 19Agreement on Textiles and Clothing

(ATC) 69Agriculture 1, 2, 20, 31, 32, 33, 34, 35,

36, 39, 47, 52, 72, 75, 77, 79, 89, 91, 94, 98, 112, 114, 122, 13 139, 146, 152, 156, 201, 204, 206, 218

Agro-processing activities 24Agro-based industries 83America 21APEC SME Innovation Centre 128, 136Arisan 219Artisans 19, 85, 118Artisanal 45, 120ASEAN 37, 52, 60, 79, 109, 136Asia 21, 91, 120, 123, 130, 142, 147,

148, 192, 208, 211Asia Pacific Economic Cooperation

(APEC) 128Asian countries 55, 122Asian developing countries 1, 5, 14,

15, 16, 20, 36, 37, 38, 39, 40, 44, 55, 69, 71, 73, 80, 97, 98, 100, 114, 118, 120, 123, 126, 128, 143, 144, 145, 146, 147, 148, 149, 150, 159, 165, 172, 173, 185, 187, 188, 190, 191, 194, 195, 200, 209, 210, 213, 214

Asian Development Bank 64, 168, 169, 205

Asian financial crisis 11, 37, 70, 122, 171Asian Institute of Management 202Asian region 122Association of Negros Producers 201Astra Group 151Australia 109Austria 26

Bakul Jamu 186Bali 104, 106, 148, 186

Balouchistan 88Bandung 125Bangladesh 14, 91, 92, 93, 95, 144,

147, 168, 181, 182, 183, 185, 204, 205, 208, 212

Bania 194Bank 159, 161, 163, 165, 166, 167,

169, 171, 172, 174, 175, 177, 178, 182, 183, 184, 200, 203, 209, 212, 217

Bank Negara Malaysia 173Batur 138Belarus 21Bhutan 144, 147, 185Borneo 45British Virgin Islands 109Brunei Darussalam 5, 14, 37, 39, 78,

79, 109, 174 Brunei Muara district 175Burundi 21Business and Trade Development

Council 174Business development services

(BDS) 165, 170, 172Buyer-market oriented SMEs 104Buyer-driven community chain 104 Buyer-driven trade network 104

Calabarzon 55Cambodia 5, 37, 39, 52, 57, 60, 61, 64,

65, 66, 108, 109, 144, 147, 167, 168, 169

Cambodian Development Resource Institute 169

Cambodian SME Sub-committee (CSMESC) 168, 169, 170

Canada 108, 120Cash market 20Cebu 119, 120Central Java 125, 126, 137, 138, 148,

151, 186, 187, 198Central Visayas Islands 119Ceper 125, 138Chad 124

258 Index

Chambers of Commerce 173Chance entrepreneurs 187Chennai 121Child labour 199China 4, 14, 37, 39, 69, 80, 97, 108,

109, 121, 122, 124, 125, 127, 144, 146, 147, 150, 162, 175, 184

Chinese Taipei 97Cibatu 138Classical literature 30Classical theories 18, 26, 27Clothing 3Cluster 45, 46, 47, 85, 86, 91, 104,

106, 119, 120, 121, 125, 126, 127, 137, 138, 155

Clustering 18, 44, 45, 91, 106Collateral 163, 165, 166, 167, 169,

172, 174, 183, 209, 214, 217Communist Party 164Companies Commission of

Malaysia (CCM) 70 Company Law 47Competitiveness 14, 16, 68, 114, 128,

129, 131, 132, 133, 136, 140, 141, 142, 159, 161, 163, 165, 170, 178, 180

Constraints 14, 16, 104, 114, 145, 153, 159, 160, 161, 164, 165, 168, 169, 170, 172, 174, 175, 177, 178, 179, 180, 181, 183, 184, 186, 198, 207, 208, 209, 211, 213, 214, 217

Cooperative 47, 57Coping mechanism 218Created/ulled entrepreneurs 187Credit scheme 159, 161Curungs 205Custom 185, 186, 206, 217

Da Nang 52Daihatsu, PT 151Demand factors 35Demand side 30, 34, 35, 162, 181Deng Xiaoping 80Department of Industrial Promotion

(DIP) 172Department of International

Development (DFID) 93 Depreciation 126Developed countries/economies 18, 28,

30, 37, 44, 189, 210, 217

Developing countries/economies 1, 2, 3, 17, 18, 19, 20, 24, 28, 31, 37, 39, 44, 45, 52, 91, 123, 124, 128, 130, 131, 139, 142, 143, 144, 146, 147, 148, 149, 150, 151, 169, 174, 188, 189, 192, 194, 207, 208

Development 18, 19, 21, 24, 25, 26, 28, 30, 31, 32, 36, 37, 46, 47, 48, 55, 68, 69, 78, 87, 95, 102, 104, 114, 116, 122, 123, 126, 128, 133, 136, 137, 141, 142, 143, 145, 146, 147, 148, 150, 151, 159, 162, 164, 165, 167, 168, 169, 172, 173, 174, 177, 178, 179, 181, 182, 184, 185, 187, 189, 190, 194, 196, 199, 202, 203, 204, 205, 206, 207, 211, 213

Diffusion 138, 147, 154Diversification 36, 78Diverticalization 17Doi Moi 12, 47

East Asia 18, 37, 146, 192East Java 125Economic crisis 125, 126, 136, 156, 162Economic development 3, 14, 17, 19,

20, 21, 22, 24, 26, 28, 47, 52, 69Economic growth 21, 37, 60, 80, 122Economic integration 32Economic pressures 185, 187, 196, 217Economic reform 125, 162Economic share 26, 28Economies of scale 18, 21, 123, 175Educational attainment 185, 186, 187,

189, 192, 199Eighth Malaysia Plan 204Electronic industries 18Employment 1, 20, 21, 23, 24, 25, 28,

33, 34, 35, 36, 37, 39, 47, 48, 52, 55, 57, 61, 62, 69, 70, 73, 75, 80, 83, 84, 85, 88, 91, 92, 93, 96, 114, 137, 146, 170, 179, 192, 197, 202, 206, 217

Engel’s Law 30Enterprise Law 12Ethnic 185 , 186, 205Export 16, 25, 37, 45, 46, 47, 61, 69,

70, 79, 83, 86, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 117, 118, 119, 120, 121, 122,

Index 259

123, 125, 126, 127, 128, 129, 133, 138, 144, 148, 161, 162, 180, 201

Export-led technology development 148

Export Promotion Board 162Europe 21, 26, 28, 120, 150

Family workers 19, 31, 151, 192, 194Female businesses 201Feminine 189, 195Filipino women 202Financial institution 159, 163, 169,

172, 173, 174, 175, 177, 181, 183, 208, 212, 217, 219

Flexible specialization 18, 26, 28, 30, 31

“Forced/Pushed” entrepreneurs 187Foreign direct investment (FDI) 3,

12, 47, 49, 69, 109, 131, 142, 143, 144, 145, 147, 148, 149, 151, 158

Foreign tourists 104, 148Free Port, PT 145

Gabon 124Gender Development Index (GDI)

189, 190Gender Empowerment Measure

(GEM) 189, 190Gender Equity Index (GEI) 191Gender Gap Index (GGI) 192, 193Germany 19, 24, 26Ghana 124Globalization 26, 92 Government policies 3Growth phase 19Gujarat 194

Hai Phong 52, 116Handicrafts 3, 17, 20, 64, 68, 90, 91,

117, 120, 138, 151, 201, 204Hanoi 51, 52, 116Heavy manufacturing 23, 24Ho Chi Minh City (HCMC) 51, 52, 116Hong Kong 108, 109, 120, 143, 148Human Development Index (HDI) 190

Import-substituting industries 144Income 1, 17, 20, 23, 24, 25, 26, 28,

30, 31, 32, 33, 34, 35, 36, 94, 96,

120, 185, 186, 187, 188, 189, 196, 200, 201, 203, 206, 211, 217, 218

Index of Industrial Production (IIP) 84India 4, 14, 83, 84, 85, 97, 120, 121,

130, 147, 162, 168, 175, 177, 178, 185, 187, 194, 195, 207, 210, 212

Indo-Aryan community 205Indonesia 3, 12, 14, 34, 37, 39, 45, 47,

49, 52, 73, 85, 97, 98, 101, 102, 103, 104, 106, 108, 109, 112, 116, 122, 125, 126, 128, 130, 136, 137, 138, 139, 144, 145, 147, 148, 150, 151, 153, 155, 159, 161, 162, 164, 165, 169, 186, 187, 196, 198, 199, 216, 217, 218

Indonesian Export Training Center 162Industrial Development Plan 174Industrial districts 28Industrial goods 17Industrial organization 26, 28, 44, 91Industrial restructuring 26Industrial revolution 150Industrial system 18Industrial Technology Assistance

Program (ITAP) 137Industrialized countries 18, 19Industrialization 19, 20, 21, 30, 87, 95,

148, 185Inferior goods 24, 30Informal lender 160, 161, 171Information technology (IT)

industry 83Innovation 14, 18, 28, 129, 130, 131,

132, 133, 136, 137, 138, 139, 140, 141, 145, 146, 148, 152, 155, 161, 198

Interfacing and interacting 212Inter-firm linkages/cooperation 37, 137Inter-island trade 162Inter-regional trade 162Intermediaries 103, 104, 106, 148International Organization for

Standardization (ISO) 130, 131, 133, 153, 164, 203

International Consultancy Group (ICG) 93

International Financial Corporation (IFC) 130

International Labour Office (ILO) 192International marketing 101

260 Index

International Monetary Fund (IMF) 57, 125, 162

International Organisation for Standarisation (ISO) 79

International trade 103, 122, 123, 124Inti 151, 152, 153, 154, 155Invention 28Invisible entrepreneur 207Involutionary 36Iran 109 Ireland 108Islam 213, 217Italy 26, 109 Izzat 213

Japan 28, 108, 109, 138, 144, 151Jakarta 104, 125, 138, 153, 157, 217Java 45, 216, 217Javanese 186Jepara 104, 106, 125, 126, 148Job Opportunities and Business Supports

(JOBS) Program 182 Joint venture 145, 146, 149, 150Just in time 18

Kampong Cham 66Kampong Thom 66Karanggeneng 138Karnataka 194Karya Paduyasa, PT 155, 157, 158Katshusiro, PT 151Khadi industry 83Khmer Rouge (KR) 57Kip 171Klang Valley 141Klaten 138Klepu 137Knowledge-based economy 204Kolkota 121Komatsu Indonesia (KI), PT 151, 152,

153, 154, 155, 156, 157, 158Korea 217Kubota, PT 151Kulon Progo District 198

Labour market 28, 33, 34, 48, 179, 192Labour productivity 2Lack of capital 159, 161, 182Laguna 162Lao PDR 37, 52, 68, 69, 78, 108, 109,

144, 147, 170, 171

Last resort 36, 91Law on Commercial Rules and

Registration 60Law on Investment 61Leading firm 46Less developed countries (LDCs) 144, 147Light manufacturing 21Local significant 1Ludhiana 86Luxembourg 21

Macroeconomic stability 58, 87 Mactan Export Processing Zone

(MEPZ) 119Magna Carta 5Maharashtra 194Malaysia 4, 14, 37, 69, 73, 108, 112, 114,

116, 130, 136, 139, 140, 141, 147, 150, 164, 173, 174, 203, 204, 219

Maldives 185 Maluku 45Manchester Business School 174Manufacturing 4, 14, 17, 18, 19, 20,

21, 23, 24, 25, 30, 37, 39, 45, 49, 52, 53, 57, 59, 60, 64, 65, 66, 68, 69, 70, 71, 72, 73, 74, 75, 78, 79, 81, 82, 83, 84, 85, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 100, 101, 102, 103, 112, 114, 117, 118, 119, 120, 122, 124, 125, 133, 134, 136, 138, 140, 141, 144, 145, 146, 147, 148, 149, 150, 153, 154, 161, 169, 172 , 174, 177, 180, 182, 194, 195, 196, 198, 199, 201, 203, 204, 207, 216, 218

Market 17, 18, 19, 25, 31, 32, 47, 61, 62, 68, 78, 80, 84, 88, 92, 95, 98, 103, 104, 106, 108, 109, 112, 114, 116, 118, 120, 122, 123, 124, 126, 127, 128 130, 131, 138, 143, 148, 150, 152, 154, 159, 161, 162, 167, 170, 171, 172, 175, 177, 178, 179, 180, 181, 201, 204, 205, 208, 209, 212, 214

Master plan 173 Mayong Lor 137Metro Manila 202Micro Industries Development

Assistance and Services (MIDAS) 93

Middlemen 45, 46

Index 261

Milan of Asia 118Ministry of Commerce 60, 66, 168Ministry of Environment 168Ministry of Finance 95, 177Ministry of Industry 52, 60, 85, 120Ministry of Industry and

Handicraft 170Ministry of Industry and Primary

Resources 79, 174Ministry of International Trade and

Industry 4Ministry of Labor, Invalids and Social

Affairs 116, 133, 165Ministry of Micro, Small and Medium

Enterprises (MSME) 84, 121, 130Ministry of Planning 66Ministry of Women Affairs 168Modern goods 24, 32Modern theories 18, 28, 29Modern business 217Moslem 185, 186, 217Most-favored nations (MNF) tariffs 122Multinational companies (MNC) 3, 14,

52, 97, 109, 112, 116, 126, 131, 140, 142, 143, 145, 149, 150, 151, 155

Myanmar 37, 108, 109, 112, 144, 147

National Agency for Export Development (NAFED) 162

National Capital Region (NCR) 55National Productivity Corporation 139National SME Development Council

(NSDC) 4Natra Raya (NR) 156, 157, 158Natural barriers 32Nawaz Sharif 87Nepal 14, 95, 96, 144, 147, 184, 185,

190, 191, 205, 206, 206, 209, 211Netherlands 109, 120New Order 151, 162, 196Newly industrializing countries (NICs) 143New industrializing countries 18New roles 28Ninth Malaysia Plan 204Non-farm activities 1, 25, 33, 36Non-farm employment 35, 36Non-Fordist production 26Non-professional approach 210Non-tariff barriers (NTBs) 122,

123, 126

Non-working wives 210North Sumatra 186Nusa Tenggara (NT) 217, 218

Office of SME Promotion (OSMEP) 52, 137

Organisation of Economic Cooperation and Development (OECD) 148

Pakistan 4, 14, 87, 91, 97, 179, 180, 181, 185, 206, 207, 209, 213

Panasonic 125Panipat 85Papua 45, 145Pasuruan 125Penang 141Philippines 5, 37, 55, 109, 118, 133,

136, 139, 150, 162, 163, 164, 188, 189, 192, 200, 202, 203

Phnom Penh 66Plasma 151, 152, 153, 154, 155Policy 1, 28, 70, 87, 102, 122, 123,

125, 126, 129, 136, 143, 144, 145, 146, 149, 159, 162, 164, 165, 168, 169, 171, 172, 173, 174, 177, 178, 179, 182, 184, 185, 200

Political stability 58Poor 2, 20, 32, 34, 36, 39, 91, 133,

161, 165, 167, 169, 172, 173, 175, 180, 182, 187, 208, 211, 212, 214, 219

Population 1, 3, 17, 25, 35, 36, 91, 94Poverty 1, 26, 34, 36, 37, 47, 48, 91,

194, 196, 201, 208, 219Preman 218Prey Veng 66Prima Karya, PT 155, 156, 157Prime Ministry Decree no 42, 68 Priority sector 177Private Enterprise Law (PEL) 47Privatization 58, 61Production linkages 3, 18, 52, 138,

145, 149, 151PROTON 140Punjab 86, 88Punjabi Khatri 194Push/pull factors 34, 35, 187, 194, 218Pulled entrepreneurs 194 Purdah 213Putting-out system 150

262 Index

Red River Delta 51Religion 185, 213, 216, 217Research and development (R&D) 129,

130, 143, 146, 148, 177, 178, 180, 182, 184, 204

Reserve Bank of India 177Reserved products 179Rupiah 126, 162Rural areas 1, 2, 19, 24, 25, 31, 32, 34,

35, 39, 48, 90, 94, 124, 137, 159, 161, 175, 178, 186, 196, 199, 204, 206, 211, 216, 217

Rural industries 1, 18, 32, 33, 34 Rural Java 3, 138, 198, 219Rural market 31, 32Rural people 31Rural population 20Rural producers 32Russia 109

Sanwa, PT 151Schumpeter 129 Second industrial divide 26Seedbed LEs 2Self employment 3, 20, 24, 36, 37, 39,

82, 153, 192, 194, 196, 200, 204, 206, 207

Sherpas 205Sindh 88Singapore 3, 37, 108, 109, 120, 143,

169, 190, 191Single product/service enterprises 196Small Enterprises Research and

Development Foundation 202Small scale industries (SSI) 83, 84, 85, 86Small and Medium Enterprise

Promotion and Development Office (SMEPDO), 68

Small and Medium Enterprise Development Authority (SMEDA) 87, 181

Small and Medium Industries Development Corporation (SMIDEC) 4

SME Development (SMED) Council 11SME Promotion Act 136Social-cultural background/value 185,

187, 213Social Watch 191South Africa 124

South Asia 97, 120, 185, 190, 207, 208, 211, 214

South Korea 18, 37, 97, 122, 123, 142, 143, 146, 148, 190, 191

South Sulawesi 186Southeast Asia 37, 97, 122, 128, 144,

150, 192Specialization 24, 45, 46, 47Spillover 143, 144Spouse program 210Sri Lanka 185, 192Subcontracting 4, 18, 25, 45, 52, 69,

97, 103, 118, 125, 126, 138, 144, 145, 146, 149, 150, 151, 152, 153, 154, 155, 161, 165

Sukabumi 138Sumatera 45, 216Sundanese counterparts 186 Supporting firms/industries 140, 165Supply factors 35Supply side 25, 30, 33, 34, 35, 162, 181Surabaya 125, 217Survival strategy 196, 218State-owned enterprises (SOEs) 49, 68,

82, 131, 162 , 164, 165, 166, 167State-owned trading companies 116Stockholm School of Economics 116, 133Strategic alliance 95, 144Structural change 19, 21, 92, 195Structural shift 30Sweden 28, 109 Swedish International Development

Cooperation Agency (SIDA) 93Swiss Agency for Development and

Cooperation (SDC) 93Switzerland 109

Taiwan 18, 109, 142, 143, 146, 148Takaru cooperative 154Tall poppy syndrome 48Tamil Nadu 86, 124Technology 2, 3, 14, 17, 18, 26, 28, 39,

46, 47, 92, 104, 106, 114, 123, 125, 128, 129, 132, 133, 136, 137, 138, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 154, 155, 159, 161, 163, 165, 170, 172, 173, 174, 175, 177, 178, 179, 180, 182, 184, 195, 198, 200, 203, 204, 205, 208, 211, 213, 214, 219

Index 263

Transfer of… 14, 128, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 155, 180, 184

Technical license 142, 143, 149Tegal 125, 148, 151, 152, 154, 155,

156, 157Thailand 4, 11, 12, 14, 21, 37, 52, 97,

101, 106, 109, 112, 116, 122, 130, 136, 137, 145, 146, 147, 150, 162, 164, 169, 171, 172, 173

Thakalis 205Tibeto-Burman community 205Tirupur 85Town and village enterprises (TVE) 82,

121Trade liberalization 14, 97, 122, 123,

124, 126, 143, 144, 145, 146Trade policy 126Trade promotion 101, 126Trade monopoly 122Trade reform 123, 124, 125Trade regime 122 Trading houses 103Traditional 24, 30, 31, 32, 39, 83, 204,

211, 212, 216, 217Transfer of technology 14, 16Transformation process 28

Unit Pelayanan Teknis (UPT) 154United Kingdom (UK) 108, 109United States (US) 28, 108, 109, 120,

150, 217United Nations Development

Programme (UNDP) 189, 204United Nations Industrial Development

Organisation (UNIDO) 45, 149

United States Agency for International Development (USAID) 93

Urban areas 20, 24, 25, 32, 90, 91, 94, 124, 137, 159, 175, 178, 199, 204, 206, 211, 216, 217

Urban centers 32Urban enterprises 25Urban goods 31Urban industries 31Urban market 32Urbanization 20, 120

Vendor 140Vientiane 68, 69, 170Viet Nam 4, 12, 13, 14, 37, 47, 48, 49,

51, 52, 116, 117, 127, 131, 132, 133, 139, 162, 164, 165, 166, 167, 169

West Java 125, 151, 186, 187White Paper on SME 52Women entrepreneur 14, 16, 185, 186,

187, 188, 189, 194, 195, 196, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 212, 213, 214, 216, 218, 219

Women entrepreneurship 185, 186, 189, 194, 196, 198, 199, 202, 205, 210, 212, 216, 218

Women’s marginalization 219World Bank 130, 136, 168, 180, 181World Economic Forum (WEF) 192World Trade Organisation (WTO) 13

Yemen 109, 147Yogyakarta 198