SME Policy Index: Latin America and the Caribbean 2024

The second OECD SME Policy Index assessment of Argentina highlights the country’s extensive array of programmes and initiatives aimed at fostering SME development. These efforts encompass various support schemes for SMEs and entrepreneurs, offering a wide range of business development services and measures to enhance access to public procurement opportunities. Additionally, Argentina provides a robust suite of financing supports designed to enable and encourage SME innovation. As a well as a plan that promotes the integration of SMEs into supply chains, aiming to transform the country’s productive and technological structure.

Brazil debuts in the SME Policy Index for LAC with an overall strong performance, ranking above the regional average in four of the eight evaluated dimensions: Institutional Framework, SME Development Services and Public Procurement, Innovation and Technology, and Digitalisation. It performs at the average level in the Access to Finance dimension.

However, the country’s commendable performance in productivity enhancement and association measures is offset by significant challenges in global trade integration, which poses a major obstacle to the internationalisation of SMEs. This affects its results in the dimensions of Productive Transformation and Access to Market and Internationalisation.

Colombia demonstrates notable improvement in the second SME Policy Index assessment, surpassing the LA9 average in seven out of the eight evaluated dimensions. Compared to its 2019 scores, Colombia has enhanced its performance in four dimensions: Operational Environment and Simplification of Procedures, SME Development Services and Public Procurement, Innovation and Technology, and Productive Transformation. However, challenges persist in Dimension 8, where despite achieving a reasonably strong overall score, largely due to its robust National Digitalisation Strategy, its performance is somewhat hindered by deficiencies in the digital skills framework.

Chile demonstrates top performance in this second SME Policy Index assessment, ranking as the leading LA9 performer in all dimensions except for Access to Finance. This success is attributed to an advanced framework for SME policy, which includes clear mandates for policy formulation and oversight, a relatively robust operational environment, and a wide array of SME support services available across all dimensions. 

However, Chile could benefit from the elaboration and approval of the new SME strategic development plan that incorporates advanced monitoring and evaluation mechanisms.

Ecuador continues to make significant efforts in developing policies aimed at SMEs, as evidenced by the improved scores in several of the eight evaluated dimensions compared to its 2019 performance: Operational Environment and Simplification of Procedures, SMEs Development Services and Public Procurement, Innovation and Technology, Productive Transformation, and Access to Market and Internationalisation. However, the previous policy focus on entrepreneurship and micro-enterprises has faced disruption due to macroeconomic challenges and political instability, impacting primarily its Institutional Framework and Access to Finance.

Mexico continues to stand out as a top performer in the assessment, outperforming the LA9 average across seven of the eight dimensions. However, significant changes have occurred since the 2019 SME Policy Index due to a shift in policy direction.

Paraguay's first participation in the SME Policy Index assessment recognises the various efforts the country has made regarding SME development policy but identifies significant gaps across various assessment dimensions. Since 2012, Paraguay has established a relatively well-defined institutional framework for SME policy, with a clearly assigned policy mandate and a practice of medium-term policy planning. However, weaknesses are evident in policy implementation, monitoring and evaluation, and policy coordination. Additionally, Paraguay is in the early stages of legislative simplification and regulatory reforms, which are crucial for enhancing its regulatory environment.

Peru's performance demonstrates the various efforts and programmes the country has in place for SME development. Overall, Peru's stands out in the dimensions of Innovation and Technology  and Market Access and Internationalisation, where it has improved from the 2019 assessment and scored above the regional average. However, the country still faces particular challenges in the dimension of Operational Environment and Simplification of Procedures. Although it has improved its score compared to its participation in 2019, mainly due to the development of its e-government services, it is still below the regional average.

Uruguay stands out with significant improvements in 6 out of the 7 dimensions evaluated in the 2019 edition, positioning itself above the regional average for LA9 countries, and showcasing its commitment to adopting previous recommendations. This progress is supported by a wide range of SME support services. At the same time, the country demonstrates a remarkable performance in the new Digitalisation dimension. However, key opportunities for improvement for Uruguay remain in the area of Access to Finance, where the country could benefit from peer learning, as well as its monitoring and evaluation capacity to enhance the overall effectiveness of its policy interventions supporting SMEs.