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Building the competitiveness of Lao PDR and their entrepreneurs Workshop on “Lao PDR towards AEC 2015” 19 and 21 February 2013, Laos PDR. Dr. Witada Aunkoonwattaka Trade and Investment Division, ESCAP [email protected] Competition vs Competitiveness. Competition (การแข่งขัน)

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Building the competitiveness of Lao PDR and their entrepreneursWorkshop on “Lao PDR towards AEC 2015”19 and 21 February 2013, Laos PDR

Dr. Witada Aunkoonwattaka

Trade and Investment Division, ESCAP

[email protected]

Competition vs competitiveness
Competition vs Competitiveness

  • Competition (การแข่งขัน)

    • A state of market influenced by regulation

  • Competiveness (ความสามารถในการแข่งขัน)

    • At firm level

      • Ability of a firm to compete in the global market

    • At country level

      • Ability of a country to improve and maintain national well being

      • Measured by a combination of factors such as “relative” rates of growth, income per capita exports, investment, job creations, etc.

In a world of competition, only competitive players remain.

ในโลกแห่งการแข่งขัน ผู้มีความสามาถในการแข่งขันเท่านั้นที่จะอยู่รอด

Future scenario
Future scenario

  • Competition will be more and more intense

  • Inflows of FDI in mining and electricity industries

  • Potential to become an export platform of ASEAN (using LDCs status)

    • Light manufacturing

    • Agriculture and forestry

Challenges facing laotian entrepreneurs
Challenges facing Laotian entrepreneurs

  • Competitions between local and foreign entrepreneurs

    • Domestic goods and imports

    • Local businesses and multinationals

  • Will Lao PDR be fitted into the “Factory of Asia”?

    • Real value is productivity gains

Four success factors
Four Success Factors


Management Skills

Business Plan


Those factors translate into five requirements to remain competitive
Those factors translate into five requirements to remain competitive

Customer development: identify new market niches/ nurture customer relations

Product development: identify shifting market demand

Improve productivity: Human resources development and technology

Risk management

Cash flow management

Strategies for entrepreneurs 1
Strategies for entrepreneurs (1) competitive

  • Market research and understanding international market trends

  • Innovation is the key

  • Cluster strategies

    • Strengthening associations within industrial clusters

    • Invest in your own R&D, if need be in partnerships or clusters

Strategies for entrepreneurs 2
Strategies for entrepreneurs (2) competitive

  • Branding Lao PDR in high-value products and services

    • E.g.. exporting furniture not logs, high-income tourists not backpackers

  • Invest in people: human resource management

    • Foreign languages, marketing, IT, design, basic business skills

Issues for entrepreneurs
Issues for entrepreneurs competitive

  • Deepening commercial and contractual relationships with local and foreign partners

    • All agreements should be recorded in writing.

  • Competitiveness will not occur without investment

    • Investing in human capital (language, marketing, IT, business skills)

    • Adopting new technology

    • Systemize the business process

  • Protecting your IPRs

  • 10

    Value of joining GVCs: competitive

    opportunities to grow & improve productivity

    • Increased access to international markets

    • Support from TNC (training/investment in business process/information sharing etc.)

    • Technology and knowledge transfer

    • Long term buyer-supplier relationship

    • Reputation and brand development

    • Opportunity to upgrade and move up to the next tier

    Thailand competitive: various GVCs in auto, electronics, high-tech, agri-business, consumer-goods sectors.

    Viet Nam: GVCs under development in garment, consumer goods, auto and electronics sectors

    Cambodia, Lao PDR and Myanmar: Agro-business and garments; need promotion to attract GVCs (underdeveloped domestic markets)

    GVCs in GMS

    Entrepreneur centred development strategies
    Entrepreneur centred development strategies competitive




    Access to




    and innovation






    Competitiveness framework in the world of gvcs
    Competitiveness Framework in the world of GVCs competitive

    • -Market access

    • - Access to resources

    • - Business related regulatory framework

    • - Supporting services

    • -

    • -Contestable market power

    • - Capacity to respond effectively to competitors

    • - Capacity & flexibility to respond to changing environment

    • - Capacity to create new market niches

    Enterprise (internal)


    QDC (Quality, Delivery, Cost)

    Last but not least

    Last but not least… competitive

    The key role of government

    Favourable business climate is key! competitive

    Ease of Doing Business Ranking 2013 (World Bank and IFC)

    Difficulty of completing trade procedures 2012
    Difficulty of completing trade procedures (2012) competitive

    Source: APTIR (2012)

    Building competitiveness of Laotian entrepreneurs require the government to provide appropriate business climate.

    The priority for the government is to reduce regulatory burdens to make it easier to engage in international trade.


    Thank you

    Thank you the government to provide appropriate business climate.