Building Regional Management Training Programs in Latin America

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McDermott, Gerald A.
Mar 2001
This paper analyzes MIF efforts to improve inadequate training institutions and emphasize the basic importance of updating management and worker skills in SMEs in Latin America. The paper is organized as follows: Section I analyzes the problems behind the failures of both market-based and bureaucratic approaches to provide services such as training for SMEs. A cursory look at existing evidence from the developing world and Latin America in particular shows that SMEs not only lack adequate training institutions, but also an understanding of the basic importance in updating management and worker skills. Due to massive market failures and a lack of institutional experience, innovative supply-side initiatives are critical to help SMEs break out of low-equilibrium traps. Section II then shifts attention to the six SME training projects. After a discussion of the general aims of the Program and the individual projects, the paper assesses the projects in terms of their abilities to fill their different niches. In conclusion, Section III summarizes the lessons learned thus far from these projects.