enterprise growth and expansion phase: unido technical ... · swot analysis technical...

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



▶ 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



Outline of presentation

3

▶ UNIDO programs to support entrepreneurs in their early

stage of development

▶ The Enterprise Development Program

▶ Some Stories

▶ Key success factors



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



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



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



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




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




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



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



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

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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



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


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



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



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



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.



Systèmes Productif Locaux (SPL) et Pôles de compétitivité



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.



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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

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