BGI Final Report - Economic Growth - usaid

Enterprise structure1. Firm size (WDI 5.1, # of SMEs per 1,000 people )2. Diversification of export industries (Composition of total exports made up by Top 3, UNComtrade) measures the degree to which exports are concentrated in a single product (or,conversely, how well they are distributed among many products). This is a percentage; thehigher the percentage, the lower the degree of diversification.3. Informality (GCR 2005-06) measures the degree to which the economy is made up ofinformal (unregistered) firms vs. those in the formal sector. Generally, greater degrees ofinformality result in lower levels of business growth as lack of formal recognition tends todiscourage business owners from investing in their businesses. 7Enterprise sophistication1. Production certifications (Firms with ISO certifications, Enterprise Survey, WB)2. Proactive Strategy (GCR indicators including Control of Distribution, 11.06; ProductionProcess Sophistication, 11.07; Extent of Marketing, 11.08; and Degree of CustomerOrientation, 6.14). 8a: Control of Distribution measures the degree to which international distribution iscontrolled by domestic firms vs. international firms. This is ranked on a scale of 1-7,where 7 indicates control by national firms and 1 indicates complete control byinternational firms.b. Production Process Sophistication measures the degree to which the productionprocess makes use of process technology vs. the degree to which it depends onlabor. This is ranked on a scale of 1-7, where 7 suggests a high degree of processtechnology while 1 suggests a high degree of labor intensity.c. Extent of Marketing measures the degree to which marketing is sophisticated orprimitive. Scored from 1-7, where 7 is highly sophisticated and 1 very primitive.d. Degree of Customer Orientation measures the degree to which firms are highlyresponsive to their customers. Scored from 1-7, where 7 is highly responsive and 1non-responsive.3. Extent of value-add activities (VC Breadth, GCR 11.05) measures the degree to which acountry’s exporting companies are primarily involved in resource extraction or production vs.the degree to which they perform higher level functions such as product design, marketing,sales, logistics, and after-sale services. This is a scale of 1-7, where 7 represents high valueadd activities and 1 low value-add activities.4. Enterprise Survey (A structured questionnaire found in Appendix 2 which assists inillustrating the nature of enterprise sophistication). This is not to be confused with theEnterprise Survey conducted by the World Bank, mentioned in #1 above.7 The GCR has not published this data for the last two years.8 It is important to keep in mind throughout the diagnostic that the GCR primarily measures perceptions of localbusiness leaders of their operating environment rather than relying on an objective measure.38