ABSTRACT
So far, this book has been about small firms in developed countries but the main findings (with a few important exceptions) are more urgently applicable to the poorer countries of the developing world and to countries in transition.1 It is hardly necessary to emphasise that the fact that 23 per cent of the world’s population live in extreme poverty (living on less than $1 a day) (IBRD 2001c) is a human tragedy as well as a threat to global peace and security. Some progress has recently been made (the proportion of the world population living in extreme poverty fell from 29 to 23 per cent between 1990 and 1998), but some parts of the world (notably sub-Saharan Africa) have also slipped backwards and continue to have very much higher infant mortality and lower life expectancy than middle-or higher-income countries.2 The outlook would be very bleak if some parts of the world (notably East Asia and the Pacific from the 1960s and, more recently, China) had not shown that rapid emergence from underdevelopment is possible. However, it does not seem that overall there is much evidence of convergence in the sense that poorer countries are catching up with the leaders, at least since the 1970s.3
