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Regarding SMEs, the challenge is to increase accessto credit through dedicated and diversified fundingmechanisms, which include for example smallbusiness loans, impact investment, venture capital,and standards for credit assessments ofSMEs. 439,440 Fiscal incentives and financial supportschemes that promote increasing productivity,reallocating resources towards higher value addedproducts and industries, and enhancingsustainability are also widely used.Demand side policy areas(a) Sustainable public procurementPublic procurement is a powerful transversal toolfor promoting domestic market development andsteering the market towards production andconsumption transformation in pursuit of specificsocial and environmental goals. For example, precommercialpublic procurement is used bygovernments to support socially andenvironmentally valuable technology endeavourscharacterised by a high level of uncertainty.Various forms of public procurement are used tostimulate the development of more sustainableproduction and products. At initial stages ofdevelopment, public procurement can beinstrumental for the creation of domestic marketsand the growth of private companies asgovernment is often a major consumer indeveloping countries.(b) Trade development and regulationDeveloping countries have much to gain from astrategic development of their export capacity.Trade development introduces competitive forcesin the domestic economy and offers multipleopportunities for technological learning. Alongside“traditional” trade policies, countries havehistorically relied on other instruments aimed atincreasing the export-orientation and integrationin the international market of domestic companies.These measures include both hard and softmeasures, from subsidies, conditionality, exportzones and inward investment agencies, to variousbilateral cooperative partnerships, country-brandbuilding and market foresight analysis andinvestment advice.There is often an element of serendipity in howparticular industries come to gain a foothold in aparticular country. Once established,agglomeration economies and dense suppliernetworks may attract other enterprises in thesame or related businesses to the same location 441 .Table 5-2. Industrial policy toolbox94