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Making Private Sector Development a Priority. . . Celene Cleland-Gomez

Enterprise Innovation Challenge Fund Coordinator

Beneficiary Countries

What is Compete Caribbean?

A US$ 40M Program funded by the IDB, DFID and CIDA in

partnership with the CDB, that provides technical assistance

grants and investment funding

to support

Private Sector Development and Competitiveness in the Caribbean

Business Climate Reforms

Knowledge Creation and Management

Innovation and SME

development

Structure of the PCU

Program Coordination

Enterprise Innovation

Challenge fund


Component 1 Closing the Knowledge Gap


Comprehensive Framework for PSD

US$ 2.65M

Component 1

Enterprise Surveys - Impacting Region: One of the principal problems that decision makers face in the region is the lack of updated, reliable data related to the state of business in the region. As part of its commitment to fill information gaps, Compete Caribbean funded the inclusion of Caribbean countries in the Enterprise Surveys undertaken by the World Bank. These are firm-level surveys of a representative sample of an economy’s private sector. The surveys cover a broad range of business environment topics including: Access to finance, corruption, infrastructure, crime, competition and performance measures. The results of these surveys are helping policy makers identify, prioritize and implement reforms of policies and institutions that support efficient private economic activity. Additionally, analytical products developed by the Program have supported five national and six regional Public-Private Dialogue events aimed at identifying the most pertinent business climate reforms needed across the region.

Initiative for Entrepreneurship Compete Caribbean and The Branson Centre of Entrepreneurship Caribbean have signed a Memorandum of Understanding (MOU) to partner and establish the Branson Centre Compete Caribbean Entrepreneurship Initiative. The Initiative will combine the Centre’s effective methodology of fostering entrepreneurs into successful businesses and CCP’s technical knowledge and expertise of the region to establish an innovative network that supports young Caribbean entrepreneurs.

Entrepreneurship

Comprehensive Framework for

PSD

US$ 2.65M

Component 2 Strengthening Conditions for Growth



US$ 9.9M Enterprise Innovation Challenge

Fund

Business Climate Reform: Activities under this component help to identify and address constraints to private sector development and growth. Component 2 seeks to: • Support the design and implementation of productive development policies • Support the design and implementation of business climate reforms • Strengthen public-private dialogue processes and institutions

Component 2

Component 2

Promoting Business Climate Reforms: Compete Caribbean has supported the drafting of legislation and policy documents in the areas of access to finance, investment promotion and trade promotion. Some of the highlights of legislative reform include: • Targeted legislative support to the government of The Bahamas to

reconfigure current public sector support for SME development • Revision to the legislative framework to regulate the operations of the Belize

Trade and Investment Service (BELTRAIDE) • The upgrade of legislation to prevent money laundering and to improve the

regulation of insurance companies and credit unions in Trinidad and Tobago • The drafting of a Secured Transactions Bill in Jamaica • The drafting of a Cabinet Note for an institutional framework for PPPs in

Jamaica

Component 2

Promoting Business Climate Reforms: In addition, institutional strengthening activities have been undertaken such as: • Development of a project in Suriname to implement government reform

related to improving the business climate and to establishing a Technical Unit for a competitiveness council

• Development of a project in Belize to increase the institutional capacity at BELTRAIDE and to hold a Belize Trade and Investment Forum

• Update of the Growth and Social Protection Strategy for the Commonwealth of Dominica. This strategy underpins the development interventions for Dominica over the next few years

• Strengthening of Investment Promotions Institutions in Jamaica

Public-Private Dialogue (PPD)

In an effort to encourage meaningful PPD in the region, Compete Caribbean has engaged in a multi-stakeholder pro-growth initiative known as the Caribbean Growth Forum (CGF). The CGF aims to provide a platform for dialogue around the growth challenge with a view to identifying and implementing practical solutions that inspire action. The Forum was launched in Jamaica in June 2012 with the main objective of identifying practical economic policies to induce sustainable economic growth in the Caribbean. It assembled experts from within the region and from across the world to share best practices and initiate discussions under three themes: Competitiveness, Entrepreneurship and Innovation. CGF is supported by:

Comprehensive Framework for

PSD

US$ 2.65M

Component 3 Leveraging the Strengths of the Private Sector



US$ 9.9M

Enterprise Innovation

Challenge fund

US$ 13.25M

What is a Challenge Fund and is it Useful for the Region?

“a competitive mechanism to allocate financial support to innovative projects, to improve market outcomes with social returns that are higher/more assured than private benefits but with the potential for commercial viability.” The essential elements of a challenge fund are that it:

Issues a challenge in the public domain open to all to compete, to bid and achieve;

Requires innovation from bidders in meeting their challenge and supports their ideas;

Has a governance structure through which decisions are made by an independent panel/committee based on an established set of transparent criteria.

What is a Challenge Fund?

Firms active in developing countries are often slow to respond to potential opportunities or do not respond at all. A number of explanations can be offered: Risks are too high. A weak enabling environment and small markets, lead to greater costs, risks and uncertainty in doing business. Firms may find it just not viable to take on the risk of launching an enterprise. Information failures. Information systems are often weak. This makes cost discovery more difficult, creates uncertainty and increases the perceived risk. Inertia within firms. Inertia is caused by a lack of competition from other firms and an inbuilt bias against going down market where the financial returns may be lower or more risky. Firms are often content to serve attractive, low risk market segments with little market pressure to seek new market opportunities. Failures in the innovation cycle. In addition to inertia within larger firms, many SMEs active in the developing countries generally lack the market linkages, expertise and finance to innovate and expand their companies to a size that impacts on the market.


These constraints must be addressed if inclusive growth is to occur (poverty reduction): Challenge Funds . . .

Provide a potentially effective tool to foster this growth and overcome these problems by sharing risks in projects identified by those who have the ambition to implement them.

co-funds projects that can leverage the inherent strengths of the

private sector namely: i) the creativity and ambition to innovate; ii) the ability to test new ideas and to rapidly abandon them if they do not work; and iii) the capacity to implement and scale up those proven to work.


THE ENTERPRISE INNOVATION CHALLENGE FUND

. . . provides technical assistance and investment funding to support firms, clusters and value chains to develop new products and services, implement new business models, and access new markets fostering innovation and competitiveness.

Support to Clusters Window Innovation Window

Enterprise Innovation Challenge Fund

What is the EICF?

THE INNOVATION WINDOW

Creating Competitive Advantage One Firm at a Time…

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A competitive mechanism that provides non-reimbursable funding of up to US$500,000 to firms and entrepreneurs to take a chance on an innovative, risky business idea to improve the revenue performance and competitiveness of the firm. The window will finance innovative ventures to develop new products, implement new business models, or enter new markets.

What is the Innovation Window?

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Private Sector firms legally established in a CARIFORUM country; and who:

• Register for consideration under the window;

• Present all documentation required by the window;

• Have no enforceable outstanding tax or social benefit obligations;

• Is not delinquent in the servicing of existing debt instruments;

• Commit to provide counterpart funding and accept the financial requirements of the program.

• Agree to involvement in the program’s visibility campaigns;

• Agree to cooperate in the development of an Innovative Business Plan;

• Agree to provide all information required for monitoring and evaluation of results and impact;

• Certify that they are not receiving grant financing for the development of a business plan from another donor agency

Who Can Compete?

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To be considered ideas must: • Be innovative (product, process, marketing or

organizational); • Have commercial application and sustainability; • Be able to be completed within the time frame specified

in the call parameters; • Have the potential to positively impact the livelihood,

skills and incomes of employees and suppliers of inputs and services;

• Be submitted to the PCU using the established mechanisms;

What Type of Ideas are Competitive?

What Project Activities Can Be Funded?

• Consultancies to support the preparation of the business plan, organization, institutional and coordination activities, legal advice, selection and hiring of personnel aiming at that objective;

• Capital investment directly associated to the development of the project;

• Consultancy services (market studies, technical assistance, management consulting, etc.).

• Investment in machinery or equipment or other inputs that will improve productivity, process and product development, quality improvement and design, strategic management, access to markets and market intelligence, etc;

• Intellectual or industrial property protection;

• Knowledge management;

Sorry, NO Can Do . . .

• Working capital; • Investment in capital goods that are not directly related

to the Project; • The purchase of real state or vehicles; • Construction of physical infrastructure costing more

than 30% of the project; • Payment of debts, dividends, taxes or recovery of

capital, purchase of stocks, bonds or any other liquid values;

• Administrative or operating expenses; • The purchase of goods for the project that exceeds the

30% of the total cost of the project.

How Do I Apply?

• The Innovation Window will receive applications in response to a call for proposals at intervals during the year;

• The application process is exclusively electronic and can be accessed from our website at: www.competecaribbean.com;

• The fund is structured as a competition and not every submission can be a winner;

• Winners are chosen through a meticulous, rigorous process of review;

• Applicants will be notified of the outcome following each stage.

http://www.competecaribbean.com/

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How it works – Choosing the Winners

Stage 2 Business Plan Competition

Stage 3 Announcement of

Winners

IBP is developed

Submitted to IP

PCNs are reviewed Due

diligence occurs

Internal panel

reviews

Top ranked ascend

IP reviews and recommends

to EC Winners are announced

Stage 1 PCN Competition

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Stage 4

How it Works … Implementing the Project

Compete Caribbean conducts monitoring and evaluation of the implementation of the project in cooperation with the

firm

Grants are disbursed based on milestones; firms will be reimbursed after the achievement of specific targets agreed

to in the TCA

A Technical Cooperation Agreement is negotiated between the bank and the winning firms

Selecting the Winners

Evaluating Criteria: • Technical quality of the project: innovative merit is considered in

the development of a new idea, or any differentiating factor of an already existing one. Technological impact is important.

• Business Plan quality: commercial strategy, market impact and knowledge, economic results and projections overtime, growth potential, economic indicators evaluation, risk factors, are considered here.

• Coherence: Degree of adequacy in the relationship between planning, activities of execution and results.

• Export Potential • Environmental impact • Incidence in social aspects such as employment, poverty, income,

young people, ethnic minorities, etc. • Gender mainstreaming (policies that benefit women) • Appropriateness in the experience, history and background of the

applicant, in terms of competencies for project execution.

Technical Assistance Awards

CELLUCIAN (Manufacturing) (St. Lucia) Manufacturing of first global frequency

4-SIM/4-phone. Total budget estimate: US$1,547,900

Sun Palace Resorts Ltd (Services) (Jamaica) Innovative niche market business model

that will provide quality elderly health care accommodation to the Diaspora.

Total Project cost: US$ 1,250,000.

Nature Island Paper Products Incorporated (Manufacturing) (Dominica) Company expanding and diversifying

from toilet paper to paper towels, facial tissues and napkins and expand export market to OECS countries.

Total project cost: US$700,000

Tijule Company Ltd. (Manufacturing) (Jamaica) Company wants to develop quality

based products derived from the Ackee tree oil without denaturing the protein, or affecting its color, taste or flavor.

Total project cost: USD$300,000

Technical Assistance Awards Cont.

Can I Apply Now?

• Call open NOW!

• Proposals from any economic sector(s) qualify;

• Closes November 30th 2012;

• Up to US$500,000 in funding available;

• Apply online

http://www.competecaribbean.org/program/enterprise-innovation-challenge-fund

How Do I Apply?









How Do I Apply?

THE SUPPORT TO CLUSTERS WINDOW Building Competitive Advantage through Cooperation

What Are Clusters?

Vertical Clusters Encompasses backward and forward linkages along a value chain

such as upstream with suppliers and subcontractors and downstream with distributors and buyers;

Horizontal Clusters

Refers to linkages between two or more local producers (competitors). This can include joint marketing of products, joint purchase of inputs, joint development of specialized inputs and the common use of specialized equipment;

Why a Cluster Approach for the Caribbean?

A multitude of MSMEs Small domestic economies Limited pools of specialized inputs Clusters represent an opportunity for SMEs to access larger and more sophisticated markets, lobby governments for necessary reforms and infrastructure and jointly develop resources and access to markets that otherwise they could not access.

What is the Support to Cluster Window?

A funding window that provides non-reimbursable funding of up to US$ 500,000 to clusters and value chains to develop initiatives that will improve the ability of the collective to compete in global and regional markets. The window will finance goods and technical assistance to: • Develop and upgrade products and services; • Innovate and improve productivity and quality; • Improve employee and managerial capacity; • Access export markets and attract investments.

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Private sector firms, NGOs, Chamber of Commerce, Universities or Civil Society organisations established in a CARIFORUM country; and who are:

A group of at least two companies that come together to develop a project in order to address a common challenge and/or associate to improve productivity and competitiveness;

Operate as a value chain where there is an alliance between a lead business and its providers to develop a project that contributes to the competitiveness of the chain;

Who is Eligible to Apply?

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Private sector firms, NGOs, Chamber of Commerce, Universities or Civil Society organisations established in a CARIFORUM country; and who are:

Businesses or group of businesses who form alliances with other public and private actors in a given geographic territory to develop a program or project that contributes to promoting and better integrating the productive activities in that area;

Who is Eligible to apply?

What Project Activities Can be Funded?

• Establishment of Common Facility Centers

• Support for establishing Business Incubation Centers;

• Human Resource Development;

• International Certification (social, environmental, health and safety);

• Environmental sustainability concerns;

• Attraction of direct investments;

• Export promotion and marketing;

• Promotion of innovation, technological development, upgrading and transfer;

• Integration into international value chains;

• Diagnostic work to support the design of a cluster project and drafting of a Cluster Competitiveness Improvement Plan (CCIP).

Sorry, NO can do . . .

• Payment of companies’ debts and taxes;

• Operating expenses;

• Working capital for the operation of companies;

• Activities that the applicant regularly implements with its providers.

Evaluation Criteria

• Degree of importance (existing/potential) to national/regional economies;

• Strength of the cluster's linkages to global markets;

• Impact of the intervention on exports, employment, environment, gender mainstreaming;

• Coherency between the activities and budget required to achieve stated objectives;

• Strength of the cluster to carry out/sustain collective action;

• Evidence of a platform/mechanism for consensus building.

• OECS MARITIME CLUSTER

• Seeks to promote economic growth in the OECS countries through the development of a more effective maritime transport sector. Project should bolster intra-regional trade and foster regional integration.

• CARIBBEAN COCOA CLUSTER

• Seeks to develop new ways of modernizing all aspects of the cocoa sector through targeted interventions along the Cocoa value chain and supply chain. Objective is to develop a chocolate processing plant to increase value addition to cocoa derivatives from locally and regionally grown cocoa beans.

• TREASURE BEACH CLUSTER

• Attempts to diversify the tourism product in Jamaica by forging strategic linkages between the Tourism sector and small entrepreneurs within the Treasure beach community.

TECHNICAL ASSISTANCE AWARDS

• CATCH AND RELEASE SPORT FISHING IN THE RUPUNUNI Objective is to develop further the ‘Catch and Release Sport fishing’ ecotourism cluster initiative within the Amerindian Community of North Rupununi in Guyana. This cluster has the potential to impact positively 8,000 inhabitants within the North Rupununi region.

• GRENADA NUTMEG CLUSTER Seeks to maximize the economic benefit of nutmeg through the production of value added products for export. The spices extracted from the nutmeg tree will be used in cosmetics, pharmaceuticals and international food. The nutmeg pericarp and the nutmeg shell will also be used in products.

•BELIZE SHRIMP CLUSTER By achieving ASC Shrimp certification, the Belize Shrimp growers will increase its global competitiveness by having access to niche markets in Europe, USA and the Caribbean. The project should provide an industry example of environmental responsibility given its collaborative work with the World Wildlife Fund (WWF).

TECHNICAL ASSISTANCE AWARDS

How Do I Apply?

• Short Moratorium on Cluster applications to address issues in process design;

• Window will reopen January 1, 2013; • Expected improvements:

– a better designed web presence and application experience – a better established access route to the fund – Greater efficiencies in processing and decision making which

should allow us to move at the speed of our constituents • Interested parties may still register with the program to receive

status updates and notices on the re-opening of the application process.

Registration Page Registration

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