SIDO was established in October 1973 as a parastatal organisation under now Ministry of Trade, Industry and Marketing (now Ministry of Trade, Industry and Investment).
Its objective was to develop the small industry sector in Tanzania. It was expected to fulfill a very wide range of functions, from policy formulation to direct support to industries, to hands-on involvement in the establishment of SMEs in both rural and urban areas. See SIDO Vision, Mission and Objectives
Some of the best-known activities are the Industrial Estates, Technology Development Centres, Training cum Production Centres, hire purchase schemes for equipment, technology development, technology transfer through twinning arrangements and exchanges with industries in Europe and Asia, and direct marketing.
These programmes were strongly supported by the Government and by donors such as SIDA, the World Bank, and the Governments of the Netherlands, India and Hungary. In the context of a centrally planned economy, the virtual absence of a private sector, and an initially very low level of industrial activity, SIDO's efforts made a key and well recognized contribution to the development of the country.
SIDO's role as the Government's instrument for small-scale industrialization had been redefined to respond to the political and economic changes. In 1988, SIDO started a process of restructuring aiming at improved effectiveness and efficiency as well as long -term sustainability.