Promoting Competitiveness in Practice - Economic Growth - usaid

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mean is that without local business leaders taking the lead in promoting and driving the process of change, the likelihood of substantial or sustainable change is minimal. A participatory strategic planning process is the starting point. The participatory strategic planning process embedded in most cluster-based initiatives enables cluster members to: discuss and build their own consensus on the critical issues and the key impediments to engaging global markets; design a strategy and initiatives that will realistically enable them to engage global markets more effectively; and then – and most importantly – assume responsibility and ownership for specific initiatives and actions. It is a process that enables the cluster members themselves to determine the parameters of what they will do and will not do … as opposed to USAID or any other donor determining the parameters of what should be done from their perspective. We believe that it is the participatory strategic planning process – and the resulting local ownership in and responsibility for implementation – that makes competitiveness initiatives distinctly different from USAID’s other economic growth initiatives. Competitiveness initiatives are private sector led and driven in their implementation, and this implies a fundamentally different role for USAID and its contractors. Key Components of a Competitiveness Initiative Another way to understand what defines the core elements of a competitiveness initiative is to examine its typical components. Five typical components of competitiveness efforts are: Cluster Development to Re-position Industry The “heart” of competitiveness initiatives is cluster development to re-position the industry; The process of a cluster collaboratively designing a strategy and identifying and executing targeted actions results in “re-positioning industry” towards niche markets, greater value-added products. The key difference is that the strategies are devised and implemented by cluster members themselves, making local ownership and sustainability much more likely. Strategic Reforms of Policies, Laws and Regulations Such reforms typically emanate from the cluster development process described above. Again, the process of the cluster deciding which reforms are critical to its competitiveness – and which reforms the cluster realistically can affect and change – is what differentiates policy, legal and regulatory reform under a competitiveness initiative from other donor efforts in this arena. Rather than a donor or expatriate advisors identifying the key reforms that are necessary or desirable, local actors with personal and professional stakes in seeing through such reforms pinpoint a particular issue as a constraint, collectively decide to address it, and determine appropriate means to effect change. Changing the Dialogue To influence policy, legal and regulatory reforms, the private sector must interact with government, the enactor of such legislation and rules. How the private sector conducts such interaction is a central element of competitiveness initiatives. As outlined in the guiding principles, cluster members must begin to see that, although they are competitors, some issues iv
present common obstacles and, consequently, it makes sense for the good of their business as well as the cluster to combat these challenges collectively. In this respect, the dialogue within the private sector itself changes, moving from confrontation to “cooperating to compete.” Competitiveness initiatives aim to produce dialogue between public and private sectors that is less combative and more effective. Partnerships As dialogue both within the private sector and between the public and private sectors becomes more common, more effective and more trusted through a competitiveness process, joint activities and investments occur with greater frequency and involve greater complexity. Partnerships may include, for example, joint investments, agreements to separate functions and responsibilities into public or private hands, or collaboration on institution building. Because they involve sharing of financial and sometimes human resources as well as deep, strong consensus on goals, functions and anticipated outcomes, both public-private and private-private partnerships typically occur when competitiveness initiatives are at more mature stages. Improving Understanding and Support for Competitiveness Lastly, competitiveness initiatives typically include efforts to broaden knowledge of competitiveness, both within targeted groups and the general public. Many different mechanisms for information dissemination are used, including, for example, newspaper articles and editorials, training of journalists in competitiveness principles, workshops to deepen university professors’ and students’ knowledge, round-table discussions involving public and private sector leaders, and publicizing the deliberations and actions of national competitiveness councils, among other means. The central objective of media and public information efforts is to build knowledge of competitiveness principles so that the general public is supportive of different roles and dialogue between and within the public and private sectors; moreover, emerging clusters can observe, learn from and potentially emulate other clusters’ experiences. The Approach Used in Cluster-Based Competitiveness Initiatives The desk assessment of USAID’s worldwide competitiveness efforts reveals that the methodologies used by USAID contractors to implement competitiveness initiatives exhibit an overall consistency of approach. The general approach to competitiveness initiatives used by USAID contractors is delineated in detail below. 2 Phase 1: Conducting Initial Competitiveness Diagnostics A cornerstone of competitiveness initiatives is that local private sector leaders drive the process. The initial competitiveness diagnostics, in contrast, are led by the contractor – but nevertheless this stage is central to evaluating if local entities and individuals have the understanding, enthusiasm, and commitment to shoulder the responsibilities entailed in the competitiveness approach. The typical actions taken during this phase include: 2 It should be noted that no practitioner follows the methodology exactly as delineated below. Instead, what is described below is a composite approach developed by the assessment team based on a number of contractors’ implementation experiences. As such, the approach detailed below provides the assessment team’s view of “best practices” learned from implementation of USAID’s competitiveness initiatives. v
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projects initiated by the cluster m
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members of competitiveness councils
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issues (even at a sub-sectoral or c
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INTRODUCTION CHAPTER 5 RESULTS Meas
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the project; rather, we have a tool
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These findings beg the question of
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3. Focus on changes that emerged as
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cashmere value chain were included.
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cluster-based initiative: an econom
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the customer as the focal point. Th
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Mongolia Tourism: The competitivene
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issued a draft resolution to minist
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CONCLUSIONS In our chapter on guidi
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CHAPTER 6 LESSONS LEARNED AND BEST
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itself. In other words, the very fo
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Related Best Practices: • When th
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10. Cluster-based competitiveness i
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Rod Brown, Director, Australian Pro
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Jose Luis Lupo, Senior Advisor, Reg
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Part 1: General References APPENDIX
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Henton, Douglas, John Melville, and
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Rosenfeld, S., et al, A People’s
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PricewaterhouseCoopers and SRI Inte
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PricewaterhouseCoopers, “Workforc
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Munnich Jr, L.W., et al, “Northea
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Azerbaijan Bosnia Bulgaria Country
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Country Project Name Clusters Targe
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