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

19-08-08

Lakshman WijeyewardenaDirector General

Industrial Services Bureau

Role of Business Development Service

Providers – Implementation of Technology transfer

1

19-08-08



SME Demarcation in Sri Lanka

Based on Asset value (excluding land and 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

2

19-08-08



Role of BDS Providers

Present Business

New / Existing

Expected Business

Services ? BDS Provider

Legally accepted

Access to

finance

Profit maximized

Assured sales

Technologically sound

Higher productivity

Visionary and

objective oriented

Well planned

Non financial services

Financial Services

3

19-08-08



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

4

19-08-08



• 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

5

19-08-08



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

6

19-08-08



(01) Planning and Management Services• Resource identification

• 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

7

19-08-08



(02) Marketing Services

• 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

8

19-08-08



(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

9

19-08-08



(04) Technical Services

• Technical trainings (agriculture, engineering, dress making, beauticulture, electrical, etc.)

• Technology transfer

• Product development

• IT Services

• Packaging & labeling

• Quality control

10

19-08-08



• 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

11

19-08-08



Research and development

• Survey programs

• Need and impact assessment

• New technology identification

• New product & development

• Methodology development

• Coordination with research & development organizations

12

19-08-08



Financing• Finance Product

– Credit– Savings– Insurance– Money transfer– Bank draft

• Collateral Vs Business feasibility and entrepreneurship

13

19-08-08



Problems in SME SectorSri Lanka experience

• 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

14

19-08-08



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

15

19-08-08



Barriers in finding, adopting & using technology

• 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

16

19-08-08



Factors Affecting Competitiveness & Business Viability

• 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

17

19-08-08



Success FactorsSustainability

ImpactOut reach

Area

No. of people

Service portfolio

18

19-08-08



Effective BDS for Technology Promotion

• 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)

19-08-08



Thank you

Documents

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