An Overview of Small Firms Development in Tanzania

This journal focuses on the functions and responsibilities of small firms in Tanzania and how their role in business can affect the economy at large. In the first part of the journal the scholar is stating that in developing countries such as Tanzania globalization cannot live up to its full potential. Competing globally in the African market is not an option but an economic imperative, therefore in order to thrive in the African market Tanzania has to focus on narrowing their deficit in trade and paying more attention to their export goods and the possibilities that can be laid before them in that field.

A study was conducted in 2002 about the owner-managers of handicraft enterprises; it was found that a large number of the firms had less than ten years of export experience and a very small percentage of the firms had more than ten year of experience in the export field. This shows that networks have value adding benefits to small businesses and the networks of the owner-managers initially facilitated entry into foreign market.

Results of the study have shown four typologies of networks commonly used by small handicraft exporting firms in Tanzania:

• Networks with friends, customers and close family ties.
• Networks with independent distributors in foreign markets
• Networks with cluster members, local and foreign associations like AMKA, AEN, Chamber of Commerce.
• Networks with local producers.

All in all, it is rather obvious from the findings of this study that partnering through networks and clusters is an alternative way for many small enterprises in developing country to end their isolation in the current liberalized and globalized world and to become competitive in foreign markets.

In the same layer, business growth in the current competitive environment will greatly depend on the ability of the owner-manager to establish networks.

The results of the case studies showed that networks have value adding benefits to small businesses; it also initializes the aid to enter foreign markets hence giving access to a more globalized industry.   

Referred to 

Small Firms' Internationalization for Development in Tanzania Exploring the network phenomenonThe AuthorsLettice Rutashobya & Jan-Erik Jaensson