Analysis of small and microenterprise programs: Implications for urban economic development policy

This study examined the effectiveness of small business and microenterprise development programs in assisting participants to start or expand a business, and/or transfer the skills gained from the programs to wage employment. Further analysis specifically concentrated on finding out if a comprehensive approach is more effective than a more focused model and what factors constitute the success or failure of programs. It went further to assess the possibility of replicating an effective model in developing economies, particularly Nigeria. Three survey instruments were developed.; A pilot study was conducted to identify programs that are associated with microenterprise and small business development. Questionnaires were sent to 270 Chicago programs. With follow-up telephone interviews, a total of 135 (50%) responded. Participants' lists were provided by the program managers, from which three stratified random samples were drawn based on the service delivery approach of the program. In order to get a normal distribution, each stratum contained at least 35 respondents. A total of 137 participants were interviewed comprising 36 in focused programs, 60 in complementary, and 41 in comprehensive programs. The third set of questionnaires was administered to 100 Nigerian federal and state policy makers, business educators, small business owners and community activists at home and abroad.; The findings revealed that the following factors are likely to influence the effectiveness of a program. These are program objectives and principles, target groups, funding and ownership, staffing, type and method of assistance, recruitment and selection procedure, public policy, progress monitoring and adoption of lessons from evaluations. Those that are less influential include: program premises, meeting place, type of support institution, the frequency of annual provision, racial or gender preferences and high education of participants.; The comprehensive approach is most effective in assisting participants of varied backgrounds to start and expand a business and also to transfer the skills acquired from the program to secure wage employment. Although all the models were helpful to the participants, microenterprise is not yet at the level to stimulate sustained economic development. However, the study recommends a collaborative approach that combines microenterprise and small business development with other strategies to stimulate urban economic development.; On globalization and technology transfer to the less advantaged economies, 85% of respondents selected the comprehensive approach as being the most suitable for the diverse Nigerian population and adaptable for effective implementation despite socioeconomic, cultural and political adversities. This supports policy changes in favor of more commitment to microenterprise and small business development.