Micro, Small and Medium-sized Enterprises for Inclusive Growth in PNG

Long promoted as a vehicle for inclusive growth in other developing economies, micro, small and medium enterprises (MSMEs) have been placed at the centre of Papua New Guinea’s (PNG) medium-term development strategy. SMEs face a broad and diverse range of challenges when starting or growing a business in PNG, resulting in widespread informality and a lack of upwards mobility, or the “missing middle”.

In 2016, through the draft Small and Medium Enterprise Policy, the Government of Papua New Guinea positioned SMEs as a vehicle for inclusive growth, job creation and poverty reduction. Like other countries that have introduced policy instruments to promote SMEs, PNG’s SME Policy is seeking to redress market asymmetries in the way in which SMEs, compared to larger businesses, are impacted by PNG’s challenging business environment. The PNG SME Policy also positions itself as a social policy tool to promote inclusive economic growth and greater ownership of the formal economy and job creation for PNG citizens.

This report draws  together regional and global experiences of SME sector development to identify lessons learned that may be applicable to the PNG context. By situating key aspects of PNG’s SME Policy and Master Plan in global and regional settings—including the SME definition, growth targets, policy objectives and key development strategies—the report highlights practical insights and directions for consideration by PNG Government and business community stakeholders.