Promoting Competitiveness in Practice - Economic Growth - usaid

Cluster Development
The “heart” of competitiveness initiatives is cluster development to re-position the industry;
“Cluster development” encompasses the
process of different parts of a sector’s value
Repositioning Industries
chain coming together to: (i) discuss issues
in Sri Lanka
confronting the sector; (ii) define areas of
common interest; (iii) cooperatively design a
strategy for advancing cluster
competitiveness; (iv) jointly identify specific
USAID’s Competitiveness Initiative in Sri Lanka
focuses on repositioning eight industries vis-à-vis
global markets. For example:
actions to be taken; and (v) assign
responsibility for completing actions. The
process of a cluster collaboratively designing
In tourism, the strategy is to reposition the
industry beyond low cost “sun and sand”
markets to higher end niches such as ecotourism
a strategy and identifying and executing and adventure tourism. To that end, the cluster
targeted actions results in “re-positioning is:
industry” towards niche markets, greater • creating a National Cycling Trail as an
value-added products. The key difference is adventure tourism and mountain biking
that the strategies are devised and
implemented by cluster members themselves,
making local ownership much more likely
than if an outside advisor recommends
potential paths.
destination;
• establishing a model eco-lodge to highlight Sri
Lanka as an ecotourism destination; and
• creating an industry-driven tourism training
facility.
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
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In the gem and jewelry industry, the cluster
aims to move beyond exports of gems and
capture higher value-added by designing and
exporting unique and “branded” jewelry. The
cluster is:
• creating the “Ceylon Sapphire” branding
program that engages the industry in
developing a new line of jewelry with a worldrenowned
designer;
• establishing a free-standing Gem & Jewelry
Institute to provide advanced training and
services for the industry; and
• establishing an internationally-accredited gem
laboratory in Sri Lanka that will certify the
quality of gemstones and, thus, increase their
value.
In information and communications technology
(ICT), the cluster strategy focuses on improving
the overall business climate. To that end, the
cluster has:
• developed specific policy recommendations
needed for ICT growth; and
• launched three centers of excellence, focused
on e-learning, project management and, egovernment.