Latin America and the Caribbean 2019

Policies for Competitive SMEs in the Pacific Alliance and Participating South American countries

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The SME Policy Index is a benchmarking tool that assists emerging economies in monitoring and evaluating progress in policies that support small and medium-sized enterprises. This first application of the Index methodology in the Latin American and Caribbean region covers the four Pacific Alliance member countries (Chile, Colombia, Mexico, Peru) and three participating South American countries (Argentina, Ecuador, Uruguay). Divided into seven policy dimensions, this report assesses the strengths and weaknesses that exist in different areas of SME policy design, implementation, and monitoring and evaluation, and provides guidance to policy makers in identifying policy areas for future reform according to international good practices. This report is a joint effort between the Development Bank of Latin America (CAF) and the OECD through its Latin America and the Caribbean Regional Programme (LACRP), in co-operation with the Latin American and Caribbean Economic System (SELA) and the “Foundation for the Strategic Analysis and Development of the SME” (FAEDPYME).

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Chile places SME and entrepreneurship support as an important element of its economic policy agenda and its efforts to achieve a more diversified and competitive economy. It has in place a number of good international practices in terms of business development services, supporting SME innovation and productive transformation. This is reflected in a policy performance consistently above the regional average. As it moves from a productive transformation-oriented approach to a more horizontal approach aimed at improving the general business environment and reducing barriers to enterprise entry and competition, Chile could benefit from a number of initiatives. It could consider integrating closer dialogue with the private sector to identify and address the main barriers to SME development. It could also develop more detailed and integrated strategic frameworks on business and entrepreneurial development services and on innovation. Chile could also improve the legal and regulatory framework for access to finance and increase public knowledge about the benefits of regional integration connected to existing FTAs and corresponding business opportunities.

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