26/2002
October
Small and Medium-Size Enterprises: A Comparative Approach to Latin America and the European Union
 
Patrizio Bianchi - Mario Davide Parrilli


This paper presents a comparative analysis of the role played by the Small and Medium-sized Enterprises (SMEs) in the process of restructuring in Latin America and Europe over the last few decades. This paper focuses on the divergent competitiveness of the SMEs among the two regions, and hypothesises that it is due to the different process of liberalisation and productive restructuring that have taken place there. In Europe, small and medium firms have been the dynamic response of the socio-economic system to the crisis of the Fordist giants of the 1960s and 1970s. In Latin America, the small firms have rather been a survival solution to the recession produced by the debt crisis of the 1980s and the inefficiency of larger companies. Going through four case studies taken from South and Central America (i.e. Argentina, Chile, Nicaragua and Costa Rica), this work
elucidates what mechanisms operated from the 1980s onwards and produced the present socio-economic outcome. The document does not aim at comparing the too different situations of Europe and Latin America, but - for its policy purposes - tries to compare the learning process that has taken place in their own policy-making and its effects on the productive system. This learning process led Europe to choose a "commonly regulated opening"; in contrast, the Latin American economies have opted for a type of "unilateral opening". This analysis shows the solid outcomes generated by the European type of reaction to the globalisation of markets. This response has been organised around a set of structural policies oriented to create economies of scale by incentivising processes of
agglomeration and networking, which strengthen the competitive position of SMEs.

 
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