Although the importance of small and medium-size enterprises (SMEs) to local development is globally recognized, less
attention is given to their design, development and promotion particularly in developing countries. The main focus of this paper is to examine the process of designing, developing and promoting SMEs in developing countries. Results of a study conducted in a SMEs’ enclave in Kumasi (Ghana) are presented and discussed. Results show that although SMEs in developing countries remain a major source of livelihood for many individuals, their potential contribution to local development can be enhanced and sustained through the creation of common geographical enclaves for related SMEs. Findings indicated that the concentration of SMEs involved in wood processing in one location in Kumasi has reduced the cost of production (e.g., transportation), and resulted in marginal increase in sales for many SMEs, despite the widespread challenges of lack of access to credit and low promotion of products.