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UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Beyond the crisis: policies to support young enterprises
OECD-MENA Investment Program and MoDIC
Tunis 29 -30 March 2010
Enterprise Growth and Expansion Phase:
UNIDO technical assistance tools to support
successful entrepreneurs in the MENA Region
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
▶ To increase the impact of private sector development on
poverty reduction UNIDO supports the efforts of developing
countries to
▶ improve the business environment and lay the policy and
institutional foundations for the development of a vibrant
private sector,
▶ promotes domestic entrepreneurship and development of the
entrepreneurial skills of disadvantaged groups,
▶ link domestic enterprises to international investment and
technology flows, and
▶ facilitate access to resources and support services that small
and medium enterprises (SMEs) require to become more
competitive.
Innovation, entrepreneurship and competition are important
sources of productivity growth that, with appropriate policy
and incentive structures, can bring about pro-poor market
outcomes in the form of more sustainable jobs and incomes
as well as affordable goods and services.
2
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Outline of presentation
3
▶ UNIDO programs to support entrepreneurs in their early
stage of development
▶ The Enterprise Development Program
▶ Some Stories
▶ Key success factors
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
UNIDO Enterprise Ddevelopment and Investment Program
▶ Dynamic entrepreneurship is an essential for creating wealth,
employment and income through growth-oriented micro-, small- and
medium-scale enterprises.
▶ The Enterprise Development and Investment Promotion Program
(EDIP) launched in Bahrain in 1999, aims at helping potential
entrepreneurs (micro, small & medium) translate their ideas into
commercial ventures in manufacturing/ service sectors and assisting
SMEs expand and grow .
▶ Domestic investment will in turn leverage the flow of foreign direct
investments.
4
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Bahrain Model Enterprise
Development
Bahrain
Saudi Arabia Sudan Yemen
Kuwait Syria
Jordan Lebanon Tunisia
Morocco
Algeria
China
Uruguay
Egypt United Arab Emirates
Thailand
Laos
Mozambique
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Bahrain Model -
Enterprise Development & Investment Promotion Program
Capacity Building
Counseling / Technology
Tie-up & JV
Financial Linkages
In-Wall or
Virtual Incubation
GROWTH
Operational Phase
Incubation
Pre-Investment Phase
Pre Incubation
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Bahrain Model Enterprise Development
Entrepreneurship development is a process that requires
collective joint efforts of various institutions on each level of
the entrepreneur’s development cycle.
Accordingly, the Enterprise Development & Investment
Promotion Program targets three categories of potential
entrepreneurs:
Innovators , Entrepreneurs , Growth entrepreneurs
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Bahrain Model Enterprise Development
Innovators
(Micro
Entrepreneurs)
Human Development
Special EDIP program focusing on confidence building
to assist them in moving from the informal to the formal
sector
Technical Support/Administrative
Access to markets: through export consortia, collective
local marketing campaigns and clustering
Technical assistance programs introducing modern
know-how and quality issues
Legal Support
Simple Book Keeping / Accounting
Financial Support Micro and small Finance
Infrastructure Incubators
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Bahrain Model Enterprise Development
Entrepreneurs
& Growth
Entrepreneurs
( techno-
preneurs)
Human Development EDIP at the same time conducting Entrepreneur
SWOT Analysis
Technical Support/Administrative
Developing growth business plans
Business Counseling, Co-entrepreneurship & Angels
Program
Access to new Markets: Identify new markets and
assist companies expand; through Franchising,
Clusters, export consortia and Subcontracting
exchanges
Technology upgrading: Raw materials sourcing ,
sourcing of technology
Quality management & upgrading to ensure
adherence to international markets
Legal support
Match making aimed at Forming partnerships for
Joint ventures and collaboration
Financial Support
Medium to large financing, Seed capital and Venture
Capital Funds
Infrastructure
Incubators, Technology Parks and research &
development facilities
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Results of model
2007 vs 2009
2007 2009
Entrepreneurs Assisted 181 250
Enterprises established
undergoing growth
115 174
Estimated Investment $112 million $200 million
Jobs Created 1944 2463
10
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Some stories
▶ Ms Amina , electrical engineer. Start up . Oil seeds production (Black cumin,
Jojoba, Anise, Almonds etc.) Amina started with initial inv. Of 10.000 $ in
2004 to buy the extraction machine from Germany. She was the only
employee. Gradually she invested in other machine like, filling, filter and than
she bought a second extractin machine.
▶ Ms Ramadneh sold around 2000$ worth oil in the year 2005 and 18.000 $ in
2007. Her clients were local shops selling herbal medicine than started the
export to the Gulf Countries.. She strated alone and than she hires local
workers on a job order basis. She underwent training and counselling on
entreprenerurial competences, business skills, personality development
skills, accounting, linkages with buyers and equipment suppliers
11
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Some other stories
▶ Mr. Jeries started his company (supply of hospitality items as another
activity in 1999)One employee 50.000$. Training on management
systems, business skills and marketing. Linkages. In 2007 reached
a turnover of 350.000 $.
▶ Ms Rania . Civil engineer. 8 years in private firms. In 2004 started a
company to take the dealership for UAE Trading company fro bab
furniture but she failed. She moved on and diversified. Supply and
installement of Steel structurals. In 2006 she reached a turnover of
half million $ , in 2007 800.000 $ and has 5 employees. Counselling
on marketing and financial plans. Linkages with suppliers.
12
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Key factors for successful entrepreneurs
▶ Entreprenerus can be enleashed if proper support is
provided. A successful entrepreneur will move from
informal to the informal sector to meet their aspiration
▶ Some ingredients. Training yes. Couselling, Mentoring
more important. Institutional Framework. Linkages. Role
of intermediaries in promoting direct support. Project
financing. Equity Venture Capital.
▶ Involvement of private sector. Peer to peer training.
Supply-demand. Business opportunities. Linkages
▶ Coaching: I will teach you to do it. I will not do it for you
▶ I will understand your needs. I will not tell you what to do
▶ I will Encourage you and Expose you to experiences and
share knowledge
13
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 14
―… unleashing the domestic resources
in an economy—both financial and
entrepreneurial—is likely to create a
more stable and sustainable pattern of
growth.‖
UN Secretary General, 2004
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 15
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
UNIDO Export Consortia Development Program
Egypt
Uruguay
Maroc Jordanie
Inde
Pérou
Tunisia
Sénégal
Bleu: projets en cours
Bleu clair: activités préparatoires
Rouge: projets conclus
Argentine
Mexique
Côte d’Ivoire
Arménia
Pérou
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Technical Services
SPL/Cluster Program
▶ Cluster Mapping
▶ Awareness building and training
▶ SMEs Network Development
▶ Study Tours
▶ Cluster Twinning
▶ Institutional Framework
▶ Corportae Social Responsibility
▶ Monitoring and evaluation
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Cluster Development
▶ L’organisation au sein de la filière productive cible : animation des synergies entre acteurs, construction d’un climat de confiance, promotion de réseaux de coopération interentreprises.
▶ La formulation de stratégies collectives : élaboration d’un diagnostic participatif, d’une stratégie de développement et d’un plan d’actions concertées.
▶ L’exécution de projets collectifs structurants : confection des plans d’affaires, recherche de financement, mise en œuvre, suivi et évaluation.
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Systèmes Productif Locaux (SPL) et Pôles de compétitivité
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
UN Secretary General in March 2004 by the Commission
on Private sector & Development entitled “Unleashing Entrepreneurship: making business work for the poor‖ the report states the following:
―We focus here on the domestic private sector—for
three main reasons.
First, domestic resources are much larger than actual
or potential external resources. Domestic private
investment averaged 10–12% of GDP in the 1990s,
compared with 7% for domestic public investment and
2–5% for foreign direct investment (FDI).
Second, when informal resources are examined, such
as the potential value of land, the domestic assets that
can be tapped are significantly larger than the
cumulative FDI or private portfolio flows.
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
UNIDO’s Investment Programme
▶ Provide means to:
Measure impact of investment on growth and development
Distinguish between different types of investment and their
relative impact
Design policy based on empirical evidence
Test policy efficacy
Craft investment promotion strategies based on consensus
Identify and promote investment opportunities
Compare country investment environment to competitors
Identify and address major impediments to attracting FDI and
generating DI
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Approach to achieving strategic objectives
▶ Generate a comprehensive database on foreign investors
and domestic enterprises through regular surveys Unique public good for governments and agencies to use for strategy
formulation and services design
A resource for development partners to design and monitor TC
Global forum (publish rankings, indicators, etc.)
Can expand to include special issues (energy and environment)
Replicate into a global database
▶ Build capacity in national and regional institutions to
utilize the database for policy making, strategy design,
investor targeting, etc.
▶ Develop a mechanism for linking FDI to DI through
backward linkages to enhance the impact of FDI
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 23
INVESTOR
PERCEPTIONS
Intermediary
Agencies
Political will INVESTMENT
CLIMATE PERFORMANCE IMPACT
Management
of FDI-Local
economy
•Growth
Employment
Investment
•Local supply chain
•Training
•Technology diffusion
•Export
•Output growth
•Investor satisfaction
•Productivity
•Market conditions
•Local resources
•Operational and
regulatory impediments
Priority issues to be
addressed Investor
support
services
Political will
Policy
Intervention
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Programme Components
1. Survey
Data collection, analysis, report
2. Monitoring Platform
Public web-based platform hosting the data
3. IPA capacity building
Using the data for evidence based policy advocacy, consensus
building, strategy formulation, targeted promotion, design of
investor services
4. PS organization capacity building (SPX)
Supplier benchmarking and development, matchmaking,
subcontracting and partnership exchange
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 25
Planned Outputs ▶ Survey dataset of foreign and domestic investors
Investor profile, performance, employed labor and capital
Energy consumption and co-production
Business linkages and regional trade issues
Perceptions on support services
Technology impact
▶ Report
▶ Web-based Monitoring Platform Facilitating on-line research
Linking users
Platform for B2B partnerships
▶ Supplier Development and Partnership eXchanges Supplier benchmarking and mapping and dataset
Linking suppliers and sub-contractors to major buyers
Network of national eXchanges
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 26
Anticipated Outcomes
▶ Upgraded capacities of IPAs Research and monitoring of investment flows and impact of different
investor types
Empirical evidence based policy advocacy
Measuring impact of policy and other interventions
Guiding and informing investors
Aftercare
▶ Develop national investment strategies Consensus building among national stakeholders
▶ Build linkages between domestic and foreign investment Supplier development
Investment project articulation and promotion for supplier development
Domestic investment promotion
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Expected Development
Increased transparency Measurement of impact of investor categories
Better and more informed business decisions by private sector
Stimulating public-private partnerships
Empirical evidence to support debate between civil society and private
sector
Enhanced investment governance Evidence-based policy interventions in response to developmental
priorities and private sector needs
Improved efficiency in investment promotion
Strategies for investor targeting
Regional integration process moved forward
27
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 28
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 29
MONITORIN
G
PLATFORM
National
institutions Investment promotion
Policy Strategy Services
Analysis of trends Assessment of impact Measurement of responses Comparison of sites Sectoral analysis
Development
organizations
Country specific
information
Private
sector
Investment projects
Monitor projects
Identify Development
gaps Monitor TA Programmes and
progress in diversification
Trend analyses Identification of inv. opp. PPPs
Financial
institutions
MONITORING
PLATFORM
Transparency
Case studies
Inv. Opportun
ities
TA Prog’s
Perception, performance, impact data
Investment Monitoring Platform
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 30
Countries
Measure response to change in investment climate parameters
Empirical documentation for policy advocacy
Spot trends
Customize targeting strategies to design after care programs
Private sector (private and foreign)
Benchmarking with other companies
Host country structure and comparison with other countries
Supply chain and distribution opportunities through matchmaking mechanism
Equity funds: Investment opportunities
Academia
Raw data
Country and sector analyses
Development organizations
Indicators: Indexes, rankings, forecasts, etc.
Key users of the information platform
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Where we can work with PE
▶ Monitoring Platform to assess environments and link
companies with funds
▶ Funds that link into the SPX programme
Invest in companies participating in supplier development
programmes
Post investment support to projects through SPX (SME)
Link supply chain of existing investments into SPX (Large)
▶ Develop institutional linkages between funds and IPAs
How IPAs can play a role in supporting PE funds
How funds can enhance the effectiveness of IPAs
▶ Link to EDIP programme with start-up funds
31
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 32
Sub-contracting exchange and supplier development
▶ Objective: Leverage large investors and public procurement (especially state owned enterprises) to become drivers of SME development
▶ UNIDO Sub-contracting and Partnership Exchange (SPX) programme
Traditional UNIDO programme covering over 45 countries
Matching potential sellers with major buyer
▶ In 2007 new SPX programme designed taking lessons of past 20 years’ experience
▶ New SPX programme brings three new elements:
Benchmarking of potential suppliers to assess their level of maturity
Strategic partnerships with large buyers
Supplier development
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 33
Oil
Companies
Mining
Companies
Power
Companies
Transport
Companies
Agriculture
Companies
Others
Shell
BHP Billiton Angola
Eskom
Transnet
Unilever Nestle
Need analysis
Gap
analysis
Facilitated self-
assessment
Upgrading
plans Investment
projects
Financing
ITPOs
COMFAR
BUYERS
S(B)PX
Database
Other
database
Supplier
mapping
Local companies
Benchmarking
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 34
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth 35
Detailed view of how the company rates against buyer
requirements and the means to address performance gaps
Financial Performance
• Cost management
• Productivity
• Financial Stability
Customer Performance
• Product Quality
• Service Quality
• Customer responsiveness
Internal Processes
• Operations Management
• Supply Chain Management
• Information Management
• Corporate Governance
Learning and Growth
• Leadership
• Human Capital Management
• Safety and Health
• Environmental Management
Bu
ild
ing
Blo
cks
Ou
tpu
t A
reas
Exceed buyer expectationsBelow Expectations Exceed Expectations Below Expectations
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Cooperation partners
▶ OECD
▶ African Union/NEPAD
▶ RECs
▶ CIPS
▶ Union of African Chambers of Commerce and Industry
▶ Vale Institute (Columbia University)
▶ AVCA
▶ IFC
▶ MicroSoft
▶ MIGA/FIAS
▶ WB
▶ WAIPA
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Data sets
▶ Survey
▶ Investment project ideas of companies surveyed (CPP)
▶ SPX supplier profile
▶ SPX supplier benchmark results
▶ Companies provided improvement assistance based on
benchmark results
▶ Investment project proposals emanating from supplier
development
37
UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Reducing poverty through sustainable industrial growth
Using the data sets
▶ TC design for capacity building (IPA, Ministries, PSO, NSO)
▶ Investment projects for promotion (ITPO)
▶ Green projects
▶ Upgrading projects
▶ Linkages to PE (EGM)
▶ E-learning platform
▶ Research (Publications)
▶ Business portal
▶ Evaluation of TA impact (RBM)
▶ Policy recommendations, sector analyses
▶ VC Mapping