Making policy choices in nonfinancial business support: an international comparison

The paper reports an international literature review of advisory business support. Most industrialised countries provide a degree of business support to small and medium-sized firms, such as information and advice. It is normal for programmes to be justified using arguments about market failure and programme designers tend to weight different aspects of market failure leading to different policy choices. The paper was based upon a literature review of business support in OECD countries conducted in 2004. A visual analogue scale was developed based on the choices made by policy makers across OECD countries which developed a taxonomy of business support choices to enable both a more systematic comparison of, and to differentiate, programmes. There are a considerable number of choices that can be made regarding how a programme is designed and delivered for a specific set of market failures. The key result of the research is to suggest a hierarchy of policy choices. At the top are four choices: Who delivers? What ‘type’ of support? How is it rationed? And how is it funded? At a point in time when there are significant institutional changes in English business support the paper has the opportunity to contribute by making more explicit the policy choices in the area of business advice to small firms.