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UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
economy environment employment1
The upgrading process
Enterprise Environment
Overall strategic diagnosis Institutional and regulatory environment
Formulation of the upgrading planand financing scheme
Infrastructures and services
Approval of the upgrading plan Standards, certification, accreditation
Implementation and monitoringof the upgrading plan
Investment incentives and promotion
Modernization of equipment
Organization and
management systems
Production system
Training and skills
development
Quality and certification
Marketing and market
research
Alliance and partnership
COMPETITIVENESS
Export The local market2
Restructuring and upgrading approachesand methods
3
I. Globalization: the challenge of industrialgovernance in developing countries
Liberalization and globalization
The challenge of globalization
The new pattern of industrial
competitiveness4
Some preferential arrangements between developedand developing countries
ArrangementNumber of
member countries
Member countries or countries/territories in the process of joining
Agreement on free trade between theEuropean Union (EU) andsouthern Mediterranean countries
EU 15 + 12
EU + Algeria, Cyprus, Egypt, Israel, Jordan, Lebanon, Libyan Arab Jamahiriya, Morocco, Palestine, Syrian Arab Republic, Tunisia, Turkey
Free-trade arrangements between EU and Eastern Europe
EU 15 + 6EU + Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia
North American Free Trade Agreement
3Canada, Mexico, United States of America
Arab Free Trade Agreement19
Algeria, Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libyan Arab Jamahiriya, Mauritania, Morocco, Palestine, Qatar, Somalia, Sudan, Syrian Arab Republic, Tunisia, United Arab Emirates, Yemen
Common Market for Eastern and Southern Africa (COMESA)
19
Angola, Burundi, Comoros, Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda , Sudan, Seychelles, Swaziland, Uganda, Zimbabwe
West African Economic and Monetary Union (WAEMU)
8Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, Togo
5
The new pattern of industrial competitiveness
Former pattern
At governance level: From interventionism From the State as actor From the State as operator From the State as ownerAt market level: From protection From natural standards
standardization From subcontracting based on capacity From the geographically centered
marketAt enterprise level: From economies of scale From production of tangibles From integrationNEW FACTORS OF
COMPETITIVENESS From production skills From labor From transactional strategies
New pattern
To laissez-faire To the State as facilitating partner To the State as helper To the private owner
To liberalization To international standardization To subcontracting based on skills To the area market
To economies of flexibility To production of intangibles To fragmentation
To managerial skills To acquisition of technologies and
compliance with international standards
To partnership strategies.6
II. The UNIDO program of assistancein restructuring and upgrading
Upgrading concept
Competitiveness in terms of price, quality and
innovation;
Ability to follow and assimilate the
development of technologies and markets.
7
Objectives of the integrated program
Modernizingthe industrialenvironment
Promoting the
development of
competitive industries
Strengthening the capacities ofsupport institutions
Improving thecompetitivenessand development
of industrialenterprises
RESTRUCTURING AND
UPGRADING PROGRAMME
8
The principal components of the integrated restructuring and upgrading programAssistance in the design, implementation
and follow-up of a national industrial restructuring and upgrading program (beneficiary: Ministry of Industry)
Strengthening the capacities of enterprise support systems (beneficiary: support institutions)
Support program for the restructuring and upgrading of pilot enterprises chosen from among the priority sectors (beneficiary: enterprises)
9
UNIDO’s experience in restructuring and upgradingDiagnostic studyManagement, quality , certificationPolicy and, strategy formulationIntegrated restructuring and upgrading
programPilot restructuring and upgrading projectCapacity-building: standardization,
accreditation
Geographical cover:Poland, Romania, Algeria, Tunisia, Morocco
Kazakhstan, WAEMU countries, Egypt, Sri Lanka Rwanda, Colombia ,and Madagascar
10
III. Overall strategic diagnosis and upgradingBasic principles of diagnosis
Aims of diagnosis:
Assess the strengths and weakness and identify the competitiveness.
Types of diagnosis: Overall (Strategic), Functional, and Express.
11
Designing an overall strategic diagnosisAims and objectivesMethod
Strategic Upgrading Process
SUP
Overall strategic diagnosis
Selection of upgrading strategies
Implementation and
monitoring of upgrading
plan Formulation of upgrading plan
12
Overall strategic diagnosis procedure
Analysis of external sources of competitiveness.
Analysis of product markets and strategic positioning.
Financial Diagnosis.Diagnosis of technical capacities.
Diagnosis of managerial skills and quality.
13
Analysis of external sources of competitiveness
14
Diagnosis of product markets and strategic positioning
15
Financial diagnosis
16
Diagnosis of technical capacities
17
Diagnosis of managerial skills and quality
18
Checklist for overall strategic diagnosis and the drafting of an upgrading
plan for an agro-food enterprise
19
IV. Industrial enterprise upgrading strategies
Selection of upgrading strategies
Globalization and possible upgrading strategiesprice and differentiation strategies
Product cost advantageService cost differentiationProduct differentiationService differentiationInnovation differentiationMarketing differentiation
Impact of price and differentiation strategies on functions in the enterprise
20
Industrial enterprises and possible upgrading strategies Strategies
Re-centering strategyPartnership strategyFlexibility strategy
Impact on resources Impact on product mix Constraints/limits
21
V. Formulation of upgrading planSUMMARY OF UP GRADING PLAN
Upgrading objectives General objectives Expected results Major upgrading items Corporate concept Markets Products and services Resources Upgrading strategy Recommended actions Immaterial actions Tangible investments Budget forecast Financing Expected impact of the implementation of the upgrading
plan Implementation planning
22
VI. Implementation and monitoringof the upgrading planPrior conditions for the success of the upgrading
plan.
Difficulties and problems encountered by industrial
enterprises that have implemented upgrading plans.
Monitoring of the upgrading plan.
Regular diagnosis.
Regular financial position.
Regular operating report.
23
International experience of restructuring and upgrading
24
I. Program for modernizing and upgradingindustry in Portugal
Prepare and adapt Portuguese industries to face European competition.
PEDIP I (1988-1993): modernization and upgrading program.
PEDIP II (1994-1999):modernization and upgrading program.
25
PEDIP I
Modernization of the support infrastructure for the industrial sector;
Vocational and technical training;
Investments in enterprises, particularly small and medium-sized enterprises;
Improving productivity of small and medium-sized enterprises and quality in industry.
26
PEDIP II
Foster a sustained improvement in the competitiveness of Portuguese industrial enterprises, to strengthen their capacity to adapt to the rapid evolution of technologies and markets, to encourage modernization, upgrading and diversification and to promote the internationalization of industrial structures.
27
Results of PEDIP I and IIPEDIP I&II summary
(In millions of escudos)
Projects approved
Number Investment Aid
PEDIP I 6,543 656,442 232,600
PEDIP II 6,316 14,662,827 459,677
Total 12,859 15,319,269 692,277
Note: 1 euro = 200,428 escudos.
28
II. The Tunisian national upgrading program
Meeting the demands of liberalization and the opening up of their frontiers.
Environment upgrading programEnterprise upgrading program
29
Environment upgrading program
The role of the administration and institutions;
Strengthening agencies;
Vocational training;
Renovating existing industrial zones and developing free zones;
Stimulating information market.30
Enterprise upgrading program
Improving competitiveness through skills development and quality management;
The acquisition of new technologies;
Strengthening enterprises’ financial structure.
31
Initial evaluation of upgrading program
The overall increase in sales by 35 %;
Export sales increased 65 %;
43 % of the enterprises had achieved a mean export sales growth rate of 300 %;
Increase in employment by 31 %.
32
III. Industrial upgrading program in Algeria
Liberate of the economy , establish a market economy
and promote industrial competitiveness
Industrial restructuring program.
33
Macro-level (Government and Ministry of Industry and Restructuring (MIR))Formulation of policies - Activation of tools -
Implementation
Meso-level (Local, sectoral, technical, technological or professional intermediaries).Restructuring and promote enterprise support
institutions
Micro-level (Enterprises wishing to benefit from the upgrading program). Improving the competitiveness of enterprises.
34
IV. Industrial upgrading program in Morocco
Liberalization and structural adjustment of
the economy.Free-trade agreements.Dismantling of tariffs.Supporting program to enable
enterprises to improve their competitiveness.
35
Improving reception facilities;
Promoting exports;
Improving vocational training;
Strengthening professional associations;
Developing technological infrastructure.
36
V. Industrial upgrading program in Egypt
Liberalization and to facilitate integration of Egyptian industries and
SMEs in the world economy.
The integrated industrial modernization program has three focuses:Modernization of enterprises, Upgrading of the industrial sector and, Industrial policy and sectoral support.
37
Modernization of enterprises:
Strengthening competitiveness;
Training;
Management and marketing support;
Foreign direct investment (FDI), (match-
making);
Export development;
Promotion of financial services;
Modernization of machines and tools.38
Upgrading of the industrial sector:
Creation of a network linking information
centres;
Establishment of “EGYnet;
Capacities of professional associations;
Creation of groups of industrial enterprises;
Promotion of the national quality system.
39
Industrial policy and sectoral support
Modernization of the Ministry of Industry and
Technology;
Modernization of industrial policies;
Sectoral studies;
Strengthening of the legal and regulatory
framework;
Improving the finance and banking system.40
Impact of executionGrowth in the value of production: 8.07 % during
the first year, totaling 34.5 % by the end of the five-year period.
Growth in gross domestic product (GDP) totaling 34 % by the end of the five-year period.
For 1 pound provided by the Fund an output of: 11 pounds in the value of production 4 pounds in the GDP
For 1 pound provided by the Fund, based on subsidized interest rates (7 per cent instead of 15 per cent), an output of: 8.7 pounds in the value of production 3.04 pounds in the GDP.
41
THANK YOU
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