Due to increasing global competition, small and medium sized enterprises (SMEs) in developing countries find it nearly impossible to compete with the low costs that labor intensive industries can offer. Therefore the "knowledge" factor and the ability to create new products and process them are becoming crucial for SMEs to survive and develop. However, the political and institutional framework conditions in many developing countries do not encourage SMEs to develop substantial technological innovations, thereby confining them to outdated "me too" production.
The German Gesellschaft für Technische Zusammenarbeit (GTZ) had conducted in recent years a number of projects concerning the promotion of technologies and innovation. adelphi therefore suggested writing a positional paper and creating an innovative service portfolio for the GTZ, based on these experiences and recent international trends.