BDS market development guide.pdf - PACA

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• Have been developed to be perfect products but are:
C Overly comprehensive and unwieldy, and
C Expensive and resource dependent; and
• Are overly generic and inappropriate to the specific, ever-changing requirements of
SMEs.
The effects of over-engineering have been:
• Products that do not reflect market in terms of
cost, price and delivery mechanisms;
• Difficulty in developing future products
because providers lack resources or capacity to
do so in the absence of resource-intensive
external support; and
• Crowding-out of indigenous products and
product development.
Why Does Overloading Occur? One reason
for overly intensive interventions is the pressure on
donors to achieve results and disburse funds.
Naturally, there is a belief that bigger is better and
more rather than less. A second factor is that often
intervention design is not grounded in the reality of
local market conditions and constraints: donors and
facilitators projects have a tendency to develop
projects based on their own expectations,
experiences, and views, and not what works in the
market in question. Typical examples include:
• Making large front-end investments to develop
prestigious BDS organizations 27 , but in the
process developing capacity (and a cost base)
that is far in advance of organization
requirement, consumer purchasing power, and
market demand, with very little consideration
of future commercial viability; and
Box 11: Overloading Training in Uganda
A project was designed to enhance the
technical capacity of SMEs involved in the
food-processing sector (bakery, dairy, and
fruit and vegetable products). Initially threeweek
training courses were delivered via the
project and its partner (a business
membership organization). Because of
concerns about sustainability of training
services after project end, support was
subsequently re-focused to develop a pool
of local trainer-consultants who would
deliver training to SMEs on a commercial
basis.
Unfortunately, although the training products
were of a high technical standard and many
of the potential trainer-consultants were well
qualified, no trainer-consultants were a
commercial success. The causes of this
failure attributed to:
• Overly sophisticated products, they were
too costly and resource intensive to be
viable in local conditions;
• The training was too comprehensive and
theoretical—it did not offer quick and
practicable solutions to business
problems; and
• Inappropriate delivery mechanisms:
because of their qualifications and income
from more lucrative areas, trainerconsultants
found fees from SMEs
unattractive.
Ironically, there was an unintended output
from the project. One initial project trainee—
a baker, not a trainer-consultant—
27 successfully operated a training business on
“Business Service Centers in Ukraine” an MBP study conducted
the
by
side,
Yoo-Mi
offering
Lee reported
very short
how
focused
excessive
training
upfront
support within business service centers created cost structures
(1-2
that
hours)
could
addressing
only be supported
specific
by
baking
serving
larger firms. The conflict between business center financial viability
problems
and outreach
to other
to
small
small
bakeries,
firms was
on
partly
a
due to high – and largely unnecessary – donor investments in existing
profitable
providers
basis.
to create them more in the
image of Western business center models.
Chapter Four—How Do We Get There?—
Core Implementation Challenges