Role of Business Development Service Providers Implementation

Role of Business Development Service Providers – Implementation of Technology transfer 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau 1

SME Demarcation in Sri Lanka Based on Asset value (excluding land building) Small enterprises – Rs. 01 – 20 million Medium enterprises – Rs. 21 – 50 million Ownership Structure 80% Sole proprietorship and partnerships Principle business market 86% Domestic 14% Exports 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau 2

Role of BDS Providers Well planned Legally accepted Technologically sound Assured sales Higher productivity Profit maximized Access to finance Visionary and objective oriented Expected Business Non financial services Services Present Business 19 -08 -08 New / Existing ? Financial Services BDS Provider Lakshman Wijeyewardena Director General Industrial Services Bureau 3

Types of BDS providers • Government ministries and departments – – Mostly free of charge or subsidized Effectiveness of service delivery varies SME’s perspective on Gvt. BDS’s Policy making • INGOs and NGOs – Limited focus – Absolutely free of charge – Limited to project period – Limited to target group and locality 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau 4

• Associations and Societies – Sector base – Initiated because of an influence – Free services – Voluntary contribution • Private Institutions – Specialized or multidisciplinary – Profit oriented and fee based – Sustainable market strategies 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau 5

Business Development Services (BDS) (01) Planning and Management Services (02) Marketing Services (03) Training Services (04) Technical Services (05) Policy Support and Implementation (06) Research and Development (07) Financing 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau 6

• • • • • 19 -08 -08 (01) Planning and Management Resource identification Services Market trends and network Potential sectors Vs geographic areas Evaluation of entrepreneurship competencies Matching entrepreneurs with viable businesses Business planning Feasibility studies Pre-investment studies Performance evaluations Financial analysis Development of business plans Business appraisal Business evaluation Accounting & auditing Business registration & licensing Management information systems Linking with financial institutions Productivity development Business counseling Formation of associations for mutual problem solving and lobbying Lakshman Wijeyewardena Director General Industrial Services Bureau 7

(02) Marketing Services • • • 19 -08 -08 Market research Market plan Market linkages Trade fair & exhibitions Advertising & sales promotion Export / import marketing e-marketing Marketing evaluation Incentive packages for market development International Business exploration visits Lakshman Wijeyewardena Director General Industrial Services Bureau 8

(03) Training Services • Training need assessment • Training program design • Training module preparation – – – – – Management training Mobilization training Enterprise development training Vocational training Leadership training Technical training Human resource development training Business counseling Institutional development training Capacity development training • Training program evaluation 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau 9

(04) Technical Services • Technical trainings (agriculture, engineering, dress making, beauticulture, electrical, etc. ) • Technology transfer • Product development • IT Services • Packaging & labeling • Quality control 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau 10

• Policy Support and Implementation Support the government or policy makers to develop new policies and involve policy changes Support to the government for policy implementation and policy decision Policy development research – Need & impact assessment and policy suggestions 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau 11

Research and development • • • 19 -08 -08 Survey programs Need and impact assessment New technology identification New product & development Methodology development Coordination with research & development organizations Lakshman Wijeyewardena Director General Industrial Services Bureau 12

Financing • Finance Product – Credit – Savings – Insurance – Money transfer – Bank draft • Collateral Vs Business feasibility and entrepreneurship 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau 13

Problems in SME Sector Sri Lanka experience • • • • 19 -08 -08 Small Lack of access to market Local or regional market focus Infrastructure for SMEs based in rural areas Quality of infrastructure (electricity fluctuations) Technical weaknesses Lack of entrepreneurship Lack of skills (Product development, Packaging, Distribution, Sales promotion) Financial barriers Inefficiencies in management of finance IT problems and access to information Policy decisions (tax, imports etc. ) Lack of skilled labours Lack of a network Low productivity Lakshman Wijeyewardena Director General Industrial Services Bureau 14

Problems associated with BDS Market • There is no standardization of BDS providers • Lack of clear cut government policy and rules and regulations governing BDS markets • Repetitions of BDS service especially from government sector • Free of charge or subsidized BDS services (Gvt. & NGO) Vs Fee based BDS (Private Institutions) • Attitude of SME’s for paying BDS • Absence of coordinated effort for BDS delivery • Distorted and discontinuation of BDS markets by projects • Lack of technically qualified officers with BDS providers 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau 15

Barriers in finding, adopting & using technology • • • • 19 -08 -08 High cost of plant & machinery & equipment High cost of burrowed capital Limited market opportunities for upgraded products & services Unavailability of expertise Unaware best technology Unaware which technology is most needed Personal attitudes Reluctant to pay for BDS services High cost of expertise Lack of skilled labour Environmental barriers Rules and regulations Different policies in the Region Lakshman Wijeyewardena Director General Industrial Services Bureau 16

Factors Affecting Competitiveness & Business Viability • • • 19 -08 -08 Affordable loan interest rates Business friendly banks Affordable power costs (in a region) Incentives for alternative power applications Improve product or service quality from new technology adoption Reduced import tariffs and eliminate non tariff barriers Marketing linkages & opportunities Factory efficiency & effectiveness Business innovativeness Lakshman Wijeyewardena Director General Industrial Services Bureau 17

Success Factors Sustainability Out reach Impact Area No. of people 19 -08 -08 Service portfolio Lakshman Wijeyewardena Director General Industrial Services Bureau 18

Effective BDS for Technology Promotion • • • 19 -08 -08 Reputation and image Information with regard technology Incentive schemes (loan etc. ) Awareness campaign (international and local exposure to SMEs) Technical and financial feasibilities (cost benefits) with evidence Cluster or Nucleus based approach for technology procurement Promotion of incubators Commercial approach Partnership or accountability (results based charging for BDS) Lakshman Wijeyewardena Director General Industrial Services Bureau

Thank you 19 -08 -08 Lakshman Wijeyewardena Director General Industrial Services Bureau