George and Steve both make good points and both are very accomplished builders of small IC engines.
From an engineering standpoint there are three main types of things to consider when scaling down.
First there are things that do not change. Atmospheric pressure, compression ratio and voltage breakdown for example. Atmospheric pressure and compression ratio combine to give about the same cylinder pressure on both the compression stroke and power stroke. If you scale the spark plug the voltage breakdown of the insulator may become and issue. This will be compensated by the reduced spark gap, but the gap needs to be at least 0.020 inch to keep plug fowling down and to allow proper ignition.
Second on the list are things that mostly vary with the square of the scale factor. That is for a scale of 1/2 the factor is 1/2 X 1/2 or 1/4. High on the list is drag on the pistor in the cylinder. If the original engine uses an O-Ring for sealing the piston then the wall pressure will need to stay the same as the cylinder pressure remains the same. The contact area will reduce by 1/2 as the circumference is 1/2 and the friction is reduced by 1/2 again as the stroke is also 1/2. By replacing the O-ring seal with a lapped cast iron piston and cylinder the friction can be reduced in a major way. Plain sleeve bearings also follow the square rules as the circumference is also 1/2 and the length is 1/2. As the loading is less it is a bit better than this, but this is negated quite a bit as the RPM of small engines is usually higher. Replacing any sleeve bearings on rotating parts with ball bearings. These include the main crankshaft and cam bearings. Since the Ford engine has a single overhung crank it would be relatively easy to put a ball bearing in the connecting rod big end.
So the good news is most of the friction losses decrease by a factor of 4 if we make no improvements. But the bad news is that the available power is decreased by a factor of 8, as
methuselah1 mentioned, as the displacement follows the cube rule. Not much can be done about this unless the scale factor is modified to slightly increase the cylinder bore or stroke. Changes in the TRIM
he bore is more effective as it follows the square rule while the stroke is linear as it applies to the displacement. Also it is does not change the visual appearance as much as changing the stroke.
All of the above are approximations as there are many other factors that will apply in as least a minor way, but it will give you some guide lines for areas that can help you be more successful.