SME Development

Nexus Associates, Inc.

Economics and Management Consulting

SME Development

We have expertise in planning, implementing, monitoring and evaluating programs that aim to support the development of small- and medium-sized enterprises (SMEs) in a wide range of areas, including access to finance, business development services, worker skills training, value chain integration, technology innovation, energy efficiency, renewable energy, and corporate social responsibility. We have worked with numerous organizations to delineate program objectives, develop program logic models, define appropriate performance indicators, develop data collection strategies and management information systems, and undertake qualitative and quantitative analyses.

Recent projects

Evaluation of International Finance Corporation Private Enterprise Partnerships

The International Finance Corporation (IFC) has established a number of donor-funded organizations around the world to promote private sector development. These organizations typically undertake projects in five program areas: access to finance, business enabling environment (investment climate), corporate advice, public-private partnerships, and environmental and social sustainability. Over the past six years, Nexus Associates has undertaken independent evaluations of eight of these organizations, including the Africa Project Development Facility (APDF), Mekong Project Development Facility (MPDF), Private Enterprise Partnership for the Middle East & North Africa (PEP-MENA), Private Enterprise Partnership for the Pacific (PEP-Pacific), Private Enterprise Partnership for the Philippines (PEP-Philippines), Program for Eastern Indonesia Small & Medium Enterprise Assistance (PENSA), SouthAsia Enterprise Development Facility (SEDF), and Southeast Europe Enterprise Development (SEED). Based on a combination of qualitative and quantitative research, each of the evaluations examined the relevance, efficiency, and effectiveness of programs undertaken by the organizations.

Evaluation of the NIST Manufacturing Extension Program

Nexus Associates was retained by the National Institute of Standards & Technology (NIST) to estimate the economic and fiscal impact of the NIST MEP program on the U.S. economy. The study was based on an analysis of MEP client impact data as reported in MEP Client Feedback Surveys obtained between 2000 and 2001, adjusting for the survey period. Using a regional economic model of the United States in conjunction with the results of the Client Feedback Survey, the total economic and fiscal impact of the program was estimated in terms of employment, personal income, GDP, and government revenues and expenditures in the United States.

Nexus Associates also undertook three related studies commissioned by the Modernization Forum – an association of organizations involved in manufacturing extension throughout the United States. The first paper, “The Rationale for Public Support of NIST MEP Centers: Generating Public Benefits by Addressing Market Imperfections,” examined the role of small manufacturers in the economy, the particular problems that they confront, the reasons why companies may not invest sufficient resources in needed services in the absence of the MEP program, and the results of studies demonstrating the effectiveness of the NIST MEP program. Based on the results of a survey of NIST MEP centers and a sample of their clients, the second paper, “Impact of Proposed Cuts in Federal Funding: Could NIST MEP Centers Continue to Serve America’s Small Manufacturers?“ examined the implications of the proposed elimination of federal funding on NIST MEP centers. The third paper examined the current market penetration of the NIST MEP program.

Assessing the impact of SME programs on the poor

Donor agencies have undertaken a broad range of initiatives to promote the development of small enterprises in developing countries. These programs have been designed to help companies gain access to financing and business development services as well as to strengthen the overall business enabling environment. In so doing, the overall goal of these programs is to reduce poverty. The Committee of Donor Agencies for Small Enterprise Development (Donor Committee) asked Nexus Associates to prepare a paper on assessing the impact of SME programs on the poor. The paper provides a conceptual framework for measuring the poverty impacts of small enterprise programs, particularly those that focus on business development services (BDS). It describes various evaluation methods that could be used to determine the extent to which particular programs reduced poverty within a target population. Given the interest in assessing the impact of programs on the poor, the methods described in the paper focuses on estimating the effectiveness of programs in boosting household income in a target population above a specified poverty line.

Evaluation of the Center for Economic and Technological Development in Mexico

The rural region of Nueva Vizcaya in Mexico suffered a major economic crisis with the collapse of metal prices in international markets in 1991. In response, a series of initiatives were launched to revitalize the economy including the creation of Center for Economic and Technological Development, a business development center, to provide consulting and technical assistance services to existing businesses and promote new business developments. Based on the initial success of these regional efforts the Inter-American Development Bank (IDB) agreed to provide approximately $1.3 million over three years beginning in 1998 to support the ongoing efforts of the center. Nexus Associates was been retained by IDB to conduct an evaluation of the center’s operations, measure its impact on the regional economy, and assess the reliability of the program in similar communities in other developing countries. The evaluation involved case studies, participant assessments, and quasi-experimental analyses based on client surveys and data obtained from the national statistical agency (INEGI).

Development of M&E system for cluster programs in Latin America

The Inter-American Development Bank (IDB) has established a number of projects throughout Latin America and the Caribbean to help improve the competitiveness of small businesses through collective action. Funded through the Multilateral Investment Fund (MIF), these projects are intended to boost the productivity and sales of participating companies, leading to economic development in the respective regions. IDB asked Nexus Associates to develop a common M&E system that could be used by the executing agencies that are undertaking cluster programs. Nexus Associates defined performance indicators, established data collection procedures (including company surveys), and developed an internet-based application for entering, storing and retrieving data on particular projects.

Development of planning and evaluation system for SME programs in Mexico

In a project funded by the World Bank, Nexus Associates, Inc. developed plans for the establishment of a planning unit within the Mexican Government to focus on issues related to small and medium-sized enterprises. Based on an intensive review of existing planning processes, recommendations centered on establishing systems to monitor SME performance, undertake research on the SME needs, review programs to ensure alignment with policy objectives, and support the preparation of the National Development Plan and annual budgets. In a second project, Nexus Associates designed an evaluation system for SME programs. The evaluation system is intended to help program administrators, senior government officials, and other stakeholders determine the extent to which Mexico’s assistance organizations are meeting their stated missions of improving the performance of SMEs in Mexico. The system includes standards for program evaluation, performance indicators, data collection strategies and suggested analytical techniques.

Evaluation of Industrial Resource Centers in Pennsylvania

Nexus Associates was retained to conduct an evaluation of the economic impact of the program, determine the likely future of manufacturing particularly with respect to small and medium-sized manufacturers, and assess the implications for the Industrial Resource Center (IRC) program in the decade ahead. The first impact analysis was conducted in 1999 and a follow-up study covering the program from 1989 to 2001 was conducted in 2003. In the follow-up study, direct program impacts were estimating using a quasi-experimental research design that compared 818 Ben Franklin clients to a statistically similar, individually matched, control group of 2782 non-client manufacturers. Differences between the two groups (client impacts) were then used to model the program's overall economic impact on the state's employment, gross state product (GSP) and tax revenues. Data for the comparison group were drawn from the ES202 database, a collection of employment and wage data from employers participating in government unemployment insurance (UI) programs. The assessment also included eight (in 1999) and four (in 2003) in-depth case studies outlining the specific role of the BFP program in the success of participating companies and regional initiatives. The 1999 study also included an in-depth analysis of the manufacturing sector in Pennsylvania and a Delphi exercise on future trends. The Delphi panel consisted of 23 people, including representatives from manufacturing companies, management consulting firms, industry associations, labor unions, and academia.

Establishment of a web-based benchmarking system for manufacturers

Funded by the World Bank, Nexus Associates provided technical assistance to the Secretaria de Comercio y Fomento Industrial (SECOFI) concerning the establishment of a national benchmarking program for small and medium-sized manufacturers – Sistema de Evaluación de Indicadores de Competitividad. Nexus Associates reviewed progress, critiqued current plans, and provided recommendations on how the project might be structured to meet the objectives sought by SECOFI. The report covered the selection of appropriate performance measures, establishment of valid comparison groups, design of the survey questionnaire and report, data collection procedures on the web site, and the relative merits of different international databases. The report was based on extensive discussions with SECOFI staff, independent consultants in Mexico, and members of a task force as well as the firm’s prior experience in the development of performance measures and benchmarking programs.

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