Previous policies in the less developed economies and especially in the economies in transition promoted large-scale, State-owned enterprises, usually at the expense of SMEs. The large-scale state sector assumed the primary role in industrialization, even though it was usually over subsidized and excessively bureaucratic, which reduced its competitiveness. Therefore, the future focus of private sector development in the less developed economies and the economies in transition has to be on small industries, promoting their growth and development so that they can expand and contribute to industrial growth and form linkages with larger enterprises for mutual benefit and long-term sustainable growth. In this context, the experiences of various advanced ex Yu developing countries with business incubation schemes may provide useful lessons for the preparation, implementation and management of such schemes with a view to their replication in those countries which aim to develop their SMEs.