Does globalisation impact SME development in Africa?

Abstract

Purpose – The purpose of this paper is to increase understanding and knowledge of the impact of globalisation on African small and medium enterprise (SME) development. The contribution of SMEs to manufacturing industrialisation can be viewed in the context of the changing setting of globalisation. Globalisation is a description as well as a prescription. It can be broadly defined as closer economic integration as a result of rapid advances in technology, growth of world trade and competition, and policy changes towards economic liberalisation. Globalisation can also pose a challenge on how SMEs in Africa should brace themselves to respond to – and take advantages of – the changes, and carve an appropriate position in the global competitive economy. Design/methodology/approach – The paper reviews and synthesises the eclectic literature and also draws from the experiences of both developed and developing economies. Findings – The evidence from the literature points to several stumbling blocks that prevent African manufacturing SMEs from participating successfully in the global economy. These include problems with exports, technology, competitiveness and inter-firm linkages as well as barriers in the institutional and policy environments. Originality/value – The paper will be useful to businesses, researchers, policy makers, civil society and others interested in understanding the impact of globalisation on manufacturing SME development.