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Report on Competitiveness and Innovation in the Caribbean Main findings and interventions proposed by UNIDO and CDE
Structure of the presentation • I. Methodology and approach • II. Main findings • III. Elements of programme.
I. Methodology and approach • Review of published economic data; • Review of available sector studies and recommendations; • Identification of comparative advantages; • Consultation with stakeholders in the field (public institutions, enterprises, intermediate organizations, banking sector, industrial exports associations, etc); • Analysis of factors that impact competitiveness.
Sources interviewed • Enterprises; • Productive sectors; • Service sectors; • Technical support institutions; • Government departments; • Intermediary organizations; • Financial institutions.
Sources interviewed (e.g. Guyana) Public Institutions • CARICOM Secretariat • CARIFORUM Secretariat • GOINVEST • Government Analyst - Food And Drug Department • Ministry of Health -Veterinary Public Health • Ministry of Agriculture • Ministry of Foreign Trade & International Cooperation • Ministry of Tourism Industry and Commerce • Ministry of Trade - Guyana National Bureau Of Standards Private Sector • Private Sector Commission of Guyana • Berbice Chamber of Commerce and Development Association • Georgetown Chamber of Commerce & Industry • Guyana Furniture Manufacturing • Guyana Marketing Corporation • Caribbean Containers Limited • Forest Products Marketing Council of Guyana Inc. • LAPARKHAN Shipping • Precision Woodworking Limited • Sterling Products Limited • Independent Consultants
1. Economic situation • Due to their size and openness, the international economic environment drives the performance of Caribbean economies; • Regional trend of declining growth moving from an average of 3.9% in the 1970s to 0.5% in the 2000s; • Caribbean economies have not kept pace in terms of productivity, innovation and competitiveness.
1. Economic situation (2) • Factors affecting productivity include: • unproductive public investments (large investments in low productivity traditional sectors; e.g. traditional sectors that did not grow); • investments in maturing sectors (which need to be re-vitalised) e.g. tourism; These investments resulted in a build up of debt in many countries which was not counter-balanced by improvements in productive capacity as represented by increased production, export volumes or tourist arrivals • limited skill availability; • small and fragmented markets. • Limited destinations of FDI (mining, tourism) flows suggest that the region has few competitive sectors.
2. Foreign trade • Mainly commodities and services with low value added; • Trade to GDP ratios averaged 113.6% in the 1990s and 112.8% in 2000s; • Most countries experienced falling market shares; • Trade increasingly driven by services exports; • Tourism accounted for 66% of services exports in 2005; • Traditional markets still dominant.
3. Cross cutting issues Labour • Mismatch between skills available and those needed; • General shortage of technicians; • Free movement of labour within the region limited by certain factors while low skilled/unskilled labour from outside the region are employed in certain states. Machinery • Productive sector in the region is not using the most current technology and there is an urgent need for retooling. Productivity/Product Price • Productivity is low within the region, and product prices are high and globally uncompetitive. Barriers to Trade • Barriers to trade exist within as well as outside the region, particularly in the area of food and agricultural products and enterprises, institutions and governments are unsure of how to deal with them. Innovation and Sophistication factors Business Processes • Business processes being used are old and unsophisticated; Productivity • Could be enhanced by the implementation of modern management systems.
4. General Operating Environment Electricity • Region is dependent on imported fossil fuels; • Relatively high cost of energy; Telecommunications • Reasonably well developed infrastructure and penetration but costs is relatively high compared with Asian countries; Air Transport • Limited intra-regional connectivity. Sea Transport • Limited intra -regional connectivity. • High freight charges and port charges.
Efficient State Depts 8 PR and Advertising QMS/ISO Certification 6 Trade/Technology Exposure Productivity Enhancement 4 ICT Training and exposure Chemists/Standards 2 0 Electrical and Mechanical Re-tooling of plant Technicians Coordinated Institutions Management Management Training Land Issues Low interest loans Cheaper Utilities Areas Identified for Assistance
Survey of existing support activities • There is a wide range of technical assistance funds operating in the region; • All of the areas of competitiveness are covered by at least one of the funds; • Most of the funding is available for technical assistance to address the business environment and for the public sector programmes; • Direct assistance to the private sector is relatively small when considered among all funds.
Existing support activities (2) • In addition to technical assistance funding, some funding is available for equity investments in enterprises; • Programmes targeting the public sector appear to offer more long-term programme assistance based on country strategies; • Assistance to the private sector is more demand driven/ad-hoc rather than programmed.
1. Objectives - what is needed Overall objectives: • To develop and improve the supply side of the trade equation in these countries; • To promote innovation and technological development, and; • To improve access to regional and international markets; Specific objectives • To support the dynamics of upgrading and innovation of industries and related services, and; • To improve their competitiveness, growth and access to national, regional and international markets within the framework of trade liberalization and economic diversification.
2. Main beneficiaries • Productive enterprises; • The regional and national productive support institutions including Technical Centres/ R&D as well as intermediary institutions in the CARIFORUM countries; .
3. Programme approach Improve competitiveness and innovation by: • Upgrading and modernising enterprises; • Strong involvement of stakeholders; • Upgrading technical support institutions, R&D; • Strengthening economic information infrastructure; • Development of partnership for increased market access better integration.
Equipment renewal Organisation & management techniques Production, energy Training plan Quality, certification, traceability Marketing, exp. consortium, communications Partnership innovation 4. Process for Strengthening Industrial Competitiveness and Promoting Innovation ENTERPRISE ENVIRONMENT Strategic diagnostics Institutional & regulatory environment Formulation of the competitiveness and innovation scheme Technical and innovation support infrastructure Approval of the competitiveness and innovation plan Funding decision Incentives and promotion of investments to strengthen competitiveness and innovation Implementation and follow-up of the competitiveness and innovation plan COMPETITIVENESS EMPLOYMENT LOCAL MARKET/EXPORT
5. Example of Programme Structure COMPETITIVENESS AND INNOVATION PROGRAMME FOR CARIFORUM COUNTRIES Component I Component II Support to strengthen competitiveness of industries and to promote innovation Establishment/up-grading of technical support institutions
5.1. Component 1 - Support to enterprises Outcome I.1: Studies on strategic positioning for the priority and contributing products/sectors (e.g.: tourism, agro-food and fish, ICT, etc.) taking into account national specificities and capacities determining diversification; Outcome I.2: Thorough diagnosis and competitiveness strengthening plans for the companies eligible to the Programme; Outcome I.3: SMEs received technical support and coaching in the implementation of activities related to the competitiveness building (priority to business process improvement); Outcome I.4: HACCP, ISO 17025, ISO 22000, ISO 14000, Green Globe, Blue Flag and OSHA certification launched for selected companies and institutions Outcome I.5: Enterprises having specific and priority products carrying high potential for export (meats, fish, fruits and vegetables, flowers, coffee, cocoa…) receive assistance with the implementation of programmes of traceability
Outcome I.6: Quality Management Systems implemented in beneficiary companies/ institutions and certified; Outcome I.7: Intermediary/professional organizations from CARIFORUM region and EU strengthened and involved in international networking; Outcome I.8: Projects on industrial partnership/coaching among the companies eligible to the Programme promoted . Support to negotiating process (business-plan and fund-raising)/strategic coaching provided; Outcome I.9: Complementary studies for formulation of national/regional competitiveness and innovation programmes, and their linkage to EPA partner framework programmes on innovation for each beneficiary country and the region conducted; Outcome I.10: Cooperation in the areas of competiveness and innovation at the institutional/enterprise levels of the supported sectors strengthened.
Outcome I.11: Regional /national programmes of communication and promotion of the Programme (development of promotional materials and thematic website for the CARIFORUM Secretariat and each country) designed and implemented; Outcome I.12: “CARIFORUM Competitiveness and Innovation Tour” for the managers of industries at the regional/national levels and organization undertaken. Information and dissemination seminars on Programme’s results for the different sectors conducted; Outcome I.13: Monitoring Framework for Competiveness and Innovation Programme at national /regional levels established.
5.2. Component 2 -Support to institutions Outcome II.1: Thorough diagnostics, formulation and implementation of the upgrading plans for technical centers promoting priority and export potential sectors (R&D institutions, technology parks, national technical expertise, sectoral technical support and innovation, promotion centers, export promotion agencies, test and analysis laboratories, specialized training institutions, information networks); Outcome II.2: Assistance in development of the legislative framework and procedures for the Competitiveness and Innovation Programme implementation at regional /national levels provided; Outcome II.3: Feasibility study and assistance in establishing financing schemes in order to facilitate access of the local SMEs to funding for the implementation of the competitiveness and innovation plans provided
Outcome II.4: Capacity building for the ministries in charge of industry and trade, competitiveness and innovation centers, SME, employer associations, banks, experts/consultants and trainers for the implementation /follow-up of the Programme provided; Outcome II.5: Promotion, establishment and running export consortia supported. Institutional support provided and creation of favorable legislative framework for export consortia assisted; Outcome II.6: Capacities of investment promotion agencies strengthened and an investment platform established in order to respond to the needs of investors /operators in the area of competiveness and innovation; Outcome II.7: Industrial coaching in innovation activities provided, new products developed and industrial diversification in the CARIFORUM region promoted; Outcome II.8: Technical and professional training institutions at the regional level strengthened.
7. A Monitoring structure is required TECHNICAL UNIT FOR COMPETITIVENESS AND INNOVATION NATIONAL OFFICE FOR COMPETITIVENESS AND INNOVATION
MEMBER STATES CARIFORUM Partnership agreement EXECUTING ORGANIZATION REGIONAL STEERING COMMITTEE Management Contract TECHNICAL UNIT FOR COMPETITIVENESS AND INNOVATION TECHNICAL ASSISTANCE Promotional, technical and financial support Management of financial resources according to contract NATIONAL STEERING COMMITTEE NATIONAL STEERING COMMITTEE NATIONAL OFFICES FOR UPGRADING AND MODERNIZATION NATIONAL OFFICES FOR UPGRADING AND MODERNIZATION NATIONAL OFFICES FOR COMPETITIVENESS AND INNOVATION NATIONAL OFFICES OR COMPETITIVENESS AND INNOVATION ENTERPRISES/CENTRES FOR TECHNICAL SUPPORT ENTERPRISES/CENTRES FOR TECHNICAL SUPPORT
8. Respective roles at regional and national level At regional level: horizontal issues of relevance to all the Member States: • Harmonized regulatory framework and procedures for Programme implementation; • Harmonized information system; • Sectoral studies andstrategic positioning of priority and specific branches, products and sectors; • Introduction and management of the follow-up and evaluation tools; • Upgrading of technical centers and similar institutions; • Capacity building of the staff of administrative institutions and companies; • Training of a core team of regional experts and creation of the regional database of experts; • Supporting development of the national capacities; At the national level: to deal directly with companies’ competitiveness and innovation activities