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Business Development Services (BDS) are generally defined as:
“… services that improve the performance of the enterprise, its access to markets, and its ability to
compete. The definition of ’business development service’… includes an array of business services
[such as training, consultancy, marketing, information, technology development and transfer,
business linkage promotion, etc.], both strategic [medium to long term issues that improve
performance] and operational [day-to-day issues]. BDS are designed to serve individual businesses,
as opposed to the larger business community.”
(Committee of Donor Agencies for Small Enterprise Development, 2001)
Following the initial process of economic, social and democratic transition, various
international organizations and donors such as UNDP, EC, US AID, DfID, GTZ, etc. became
active in establishing BDS in the European and the Commonwealth of Independent States (CIS)
regions. In the absence of government intervention in an area which is widely recognized for
exhibiting various market failures, BDS programmes and projects spread rapidly throughout
these regions.
UNDP has been one of the key players behind the spread of BDS. Key areas of on-going
intervention include the following:
· Business support centres (BSC).
· Local economic development initiatives (LED).
· Business incubators (BI).
· Information and communication technology centres (ICT), etc.
The above deal with various aspects of BDS, although the mechanism employed to deliver BDS
is typically a business support centre (BSC). In certain cases, a BSC may include elements of
LED, BI and possibly ICT. This How to Guide or Primer refers primarily to BSCs, however, the
principles highlighted apply to all the different types of BDS mechanisms.
BDS are a very important means of supporting the development of micro, small and medium-sized enterprises (MSMEs), which are known to create employment, generate income and
contribute to economic development and growth. Employment and income generation are
particularly important as far as impoverished rural areas, vulnerable communities and groups
are concerned. In this sense, supporting BDS is an important means of achieving the
Millennium Development Goals (MDGs) by addressing poverty and empowering the poor and
vulnerable groups (see IBLF/UNDP, 2003). Recent UNDP strategic developments, such as the
publication of the report “Unleashing Entrepreneurship” (2004a) and the small enterprises
strategies for South-East Europe (2003a) and Central Asia (2003b), have underlined the
BDS How-to Guide, UNDP (2004)
For circulation and comment
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continuing role to be played by UNDP in addressing private sector development, partly
focused on MSMEs through support to BDS provision.
However, 15 years into the process of transition in Europe and the CIS, a revised approach
needs to be developed, in recognition of certain important facts:
· Many donors, international organizations and International Financial Institutions (IFIs) are
engaged in the process of BDS, raising the question as to where UNDP’s value-added lies
and how best it can be deployed.
· Many BDS have been established, especially in the larger urban areas, requiring UNDP to
consider how best to target limited resources.
· Most BDS fail to become viable or sustainable once donor funding terminates, requiring
UNDP (and others) to reconsider its approach.
· Alternative approaches are emerging in relation to the implementation of BDS, embodied in
the new Market Development approach, requiring UNDP to take on board international
good practice and be more explicit in setting out its approach to BDS

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