- 2) **_Programa de Desarrollo de Proveedores_ (Supplier Development Program, PDP)** : This program provides incentives to link suppliers and larger firms. Large firms provide training on quality standards and product design so that local small and medium firms can become reliable suppliers. The program has been better suited for the agro-industrial sector.<sup>27</sup> Raw materials can be easily standardized, and producers are more homogeneous, allowing for easy dissemination of quality standards and reduction of implementation costs.

- 3) **_Programas Territoriales Integrados_ (Integrated Territorial Development Programs, PTI)** : PTI combines training activities, innovation, infrastructure, technical assistance, and business and finance networking to improve productivity in a specific region.

- 4) **_Programa de Fortalecimiento y Creación de Organizaciones Gremiales_ (Program for the Creation and Strengthening of Business Associations)** . This program seeks to modernize the SME networks, train leaders, and improve the professionalism of the services provided to members. To participate in this program, each organization must present a proposal and contribute 30 percent of the cost of the project.

- 5) **_Fondo para la Modernización de las Relaciones Laborales y Desarrollo Sindical_ (Fund for the Modernization of Labor Relations and Union Development** ). This project finances training and provides technical assistance to labor unions. Micro and small business associations have also qualifed for support.<sup>28</sup>

- 6) **_Emprende Chile_ (New Productive Activities Program).** This program coordinates the efforts of a number of ministries and seeks to create an enabling environment for micro and small businesses in a region. The program’s ultimate objective is to improve the quality of life and income level of the inhabitants of participating communities, improve labor conditions and competitiveness of micro and small enterprises, and enhance overall regional development capabilities. First, it evaluates business and employment opportunities based on the socioeconomic characteristics of the region, and, second, it identifies the employment and entrepreneurship support mechanisms that can  link micro and small firms with markets and commercial networks.<sup>**29**</sup>

The PROFO program has produced significant results in productivity and profitability. Companies that participated in the program increased their annual sales by 12.9 percent between 1996 and 1999. PROFO offers one of the few independent evaluations with panels and control groups in the entire portfolio of government private sector support programs. The evaluation found that participating firms were much more likely to gain access to public funding, and take advantage of technical resources from universities and other sources. When a private agent was involved, marketing strategies were more developed. When a public sector agent was involved, greater improvements were seen in worker safety and training. The evaluation concluded that the program was “socially profitable” and that government spending was more than offset by the increased tax revenues.<sup>30</sup> On the other hand, two sectoral networks—wine and pharmaceuticals—were successful without government intervention. These experiences demonstrate the importance of promoting the networking

> 27 In 2001, of the 82 projects in this program, most were in the agriculture and agro-industrial sectors.

> 28  Ministry of Labor news bulletin. June 9, 2002. Available at _www.mintrab.gob.cl._

> 29  Ministry of Agriculture news bulletin, June 25, 2003. Available at _www.agricultura.gob.cl ._

> 30 Development Projects (Proyectos de Fomento – PROFOs): A partnership experience in Chile. José Miguel Benavente H., Department of Economics, Universidad de Chile/University of Oxford, December (1998); Benavente (1998).

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