Inclusive and sustainable economic growth through global

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www.competecaribbean.org

Inclusive and sustainable economic growth through global competitiveness

DRAFT

http://www.competecaribbean.org/

Why Compete Caribbean?

ROSE Caribbean ROSE Caribbean

1970 2014

In the early seventies, real GDP per capita was 4x higher in the Caribbean than that of the Rest Of Small Economies (ROSE) of the world.

Today it’s smaller at 0.9

▪ A consortium of donors

▪ Phase 1 (USD$25M) completed in 2017 successfully:• 12,000 jobs created• 41% increased in revenues ($153M)• 23% increased in exports ($37M)

▪ Phase 2 (USD$20M) started in 2017 for 5 years• Same goals but greater focus on

• Sustainable and catalytic impact

• Women-owned firms (WOF)

• Climate change

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What is Compete Caribbean?

Productivity & Innovation in the private sector

Business climate reforms

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(a) Clusters and value chains

InclusivenessClimate change

SustainabilityCatalytic impactGender

▪ OECS, Jamaica and Barbados ecosystem

▪ Corporate venturing (regional)

▪ Social innovation in Belize

▪ Public procurement for innovation (regional)

▪ Community-based tourism (CBT)

(b) Entrepreneurship & innovation ecosystem

(c) Technology adoption in firms▪ Technology Extension Services (TES)

▪ Blue Tech Challenge

▪ Fintech and blockchain innovation

▪ Ag-Tech pilots

▪ Cluster capacity building in vulnerable countries

▪ Four calls for proposals

(a) Policy & regulatory reformsFocused on business and innovation

climate, particularly DB indicators

(b) Institutional strengtheningFocused on evidence-based policy-

making

(c) Knowledge products & disseminationEnterprise Surveys and others

Compete Caribbean Partnership Facility (CCFP): 2 pillars, various instruments



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▪ Ag-Tech pilots






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Four calls for cluster proposals (+$3M)-> one for tourism only (2019-2020)

USD$100k to $300k technical assistance grant for each selected cluster

Technical assistance can include▪ Market research / Fam tour

▪ Product development / testing

▪ Marketing campaign

▪ Quality standards

▪ Organic certification

▪ Cluster coordination

▪ Geographic indicator

▪ Process reengineering

▪ Research & development

▪ Etc.

▪ Access to larger markets;

▪ Business development/branding;

▪ Cost sharing/saving;

▪ Workforce development;

▪ Higher and more uniform quality

standards;

▪ Supply chain or process

improvements;

▪ Advocacy

▪ Climate change adaptation / leadership

Objectives

A cluster is a group of interconnected firms operating

near each other that collaborate and compete to obtain a larger

share of the global market.

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The cluster development and selection process

Concept Note

▪ Full budget &

implementation plan

▪ Partnership agreement

with commitment letter(s)

for counterpart

contribution (20%)

▪ Terms of Reference (ToR)

for all projects

▪ Baseline data

Cluster Development Plan (CDP)

▪ Application form

online

Investment Panel (IP)

▪ Independent

panel of judges

from the private/

public sector

▪ Selection of

projects based

on scoring

system

IDB Contract

▪ Letter of

Agreement

▪ Any other

conditional

requirements

+1 month

Implementation

▪ Recruit and manage

consultants

▪ Monitor and evaluate

progress

▪ Establish sustainable

structure and processes

24 months 3-month 1 day 2-month

Cluster selection process and timeline

Sept-Oct

2019

Feb–May

2020

June 2020

(to be confirmed)

Deadlines

2020-2022

Call for tourism clusters to be announced shortly – sign up to newsletter www.competecaribbean.org

http://www.competecaribbean.org/

▪ 9 countries, 10 BSOs

▪ Regional organisations➢ OECS secretariat

➢ CTO

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Cluster capacity building

1. Dominica (DEXIA)2. Grenada (GHTA and GIDC)3. Saint-Lucia (Export Saint-Lucia)4. Saint-Vincent & The Grenadines (CED)5. Guyana (THAG)

6. Jamaica (JMEA)7. Barbados (MoSmall Business/BIDC)8. T&T (TTCSI)9. Suriname (CUS/MoT)10. Belize (Beltraide)

120 hours of training plus support to prepare Cluster Development Plans (CDPs)

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CBT fosters inclusive development, diversifies the product offering, and helps sustain tourism assets

Tool Description

COMMUNITY TOURISM DEVELOPMENT

Use Users

A frame of reference to

assess the community’s

capacity for CBT based on

key success factors (KSFs).

ENTERPRISEDEVELOPMENT

Template to prepare an

inventory of tourism assets

found in the community.

Inventory number, range &

quality of tourism assets in

community, identify

strengths and gaps

Tourism Assets

Inventory

▪ Community Organizations

▪ National Tourism

Organisations (NTOs)

▪ Business Support

Organisations (BSOs)

Assess market readiness

and gaps to identify priorities

that can be included in a

project plan and/or funding

proposal

CBT Diagnostic ▪ Development agencies

▪ Community organisations

+/-2-page template to collect

information about the types of

experiences found in the

community to attract visitors.

MARKET DEVELOPMENT

Promote the diversity of

CBT opportunities in the

Caribbean

CBT Profiles

Database of CBT

profiles in the

Caribbean?

▪ CTO representatives in

USA, UK and Canada

▪ NTOs

▪ Tour operators

▪ Visitors

CBT Enterprise

handbook

▪ CBT Enterprises owners

& managers

▪ NTOs

▪ BSOs

User-friendly business guide to

develop profitable CBT

enterprises that return benefits to

communities.

Start, improve, formalize

and expand CBT business

operations

Community-Based Tourism (CBT) toolkit

Purpose

Assessment of willingness-to-

pay of American visitors for

experiences that can be

offered by Caribbean MSMEs.

PRODUCT DEVELOPMENT

Refine, expand

and price the

product offerings

to increase tourism

spending

Consumer

research in

American

market by

Euromonitor

▪ Entrepreneurs

▪ Business Support

Organisations (BSOs)

▪ National Tourism

Organizations (NTO’s)



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▪ Ag-Tech pilots






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Technology Extension Services (TES) to increase productivity of firms

TES is a type of innovation policy that Governments have successfully used in other

countries to accelerate the pace at which SMEs “catch up” with more advanced firms by

transferring knowledge about best practices.

TES is expensive → requires advanced knowledge, skills and familiarity with modern technology

In the Caribbean → low economies of scale so a regional system is required

Nearly USD$1M will be invested to pilot access to TES by Caribbean SMEs involved in

tourism or agroprocessing via the SBDC network

Project to start in 2020



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▪ Ag-Tech pilots






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▪ More than half of

Caribbean MSMEs are

underbanked for a variety

of reasons.

▪ The lack of access to

cost-effective digital

payment solutions

prevents access to

potential customers –

both online and offline

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Fintech and blockchain innovation

*Using a Structural Gravity General Equilibrium Model, LSE study 2019

Two researches published in 2019

The Role of Fintech and Regulations in Enabling Caribbean MSMEs to grow and innovate

▪ Access to finance and cost

of finance represent the

greatest constraint to

growth

▪ The price friction

represents 2.2% of the

CARICOM GDP

▪ Addressing these barriers

can lead to an increase of

12.7% in tourist arrivals

annually*.

Tourism and Innovation: Leapfroging the Caribbean private sector

A global competition and a blockchain symposium will be organized in 2019-2020 to foster adoption of technology and help firms transition into the fourth industrial revolution.

We can all play un role in creating demand for innovative technology

Hythe, Maxwell Main Road

Christ Church, Barbados.

Tel: 1. 246. 627. 8500 • Fax: 1 .246. 429. 8869

Email: [email protected]

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www.competecaribbean.org

A multi-donor facility that provides technical assistance to increase the competitiveness of the Caribbean private sector. The results expected are increased

employment, revenues and exports using an inclusive and sustainable approach.

mailto:[email protected]

❑ Firms must operate in CCPF’s 13 beneficiary countries:✓Bahamas, Barbados, Belize, Guyana, Jamaica, Suriname,

Trinidad and Tobago, Antigua and Barbuda, Dominica,Grenada, St. Lucia, St. Kitts and Nevis, and St. Vincent and theGrenadines

❑ Cluster Project must involve 3 or more private-sectorfirms

❑ Lead firm submitting application should provide legalcertification of registration

❑ Commitment for counterpart contribution of 20%

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Eligibility

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Counterpart Contribution (20%): half in-kind, half in-cash

Cash contribution (10%) In-kind contribution (10%)

• Equipment needed• Goods (eg: fertilizer, raw material)• Website• Purchase of license• Purchase of airline tickets• Etc.

• Staff allocated to manage a project

• Space provided for cluster consultants

Max. amount allocated by CCPF (80%) – for TA $300,000

Min. amount allocated by cluster in-kind (10%) $37,500

Min. contribution by cluster in-cash (10%) $37,500

Total estimated budget of cluster project $375,000

Example from previous call for proposals

➢ Job creation in the short and long term (~25%) – the extent to which the cluster project will create new jobs, including for women and other vulnerable or marginalised groups.

➢ Revenue generation (sales & exports) (~25%) – the extent to which the cluster project will generate increased sales outside the country, within the country indirectly throughout the value chain, or to a clear reduction of imports over time, especially for Small and Medium Enterprises (SMEs).

➢ Project feasibility/potential impact (~35%) – there is a critical mass of firms with the capacity to absorb technical assistance and become competitive in a global value chain or niche market.

➢ Sustainability (~15%) – the likelihood of sustaining the results achieved once the CCPF project ends; and considerations for climate change and sustainable development.

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Evaluation criteria

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Technology Extension Services (TES) to increase productivity of firms

Size guidelines # of employees Revenues (USD)

Micro < 5 0 – $250k

Small 5-15 $251k – $500k

Medium 16-50 $501k – $1.5M

Large > 50 > $1.5MSource: Caribbean Development Bank (CDB)

Target for TES: Caribbean SMEsTES is one type of

innovation policy that

Governments have

successfully used in

other countries to accelerate the pace at

which SMEs “catch up”

with more advanced

firms by transferring

knowledge about best

practices*.

For example in the USA, the Manufacturing Extension Partnership (MEP) program

generated $32 of return in economic growth for every 1$ invested, translating into $3.6

billion in total new sales annually for SME manufacturers. In terms of employment, an

impact assessment revealed that one job was created or retained for every $1,570 of

federal investment made in the program.

TES pilot in the Caribbean - DRAFT

4-step approach

(B) BSOs / SBDCs1. Jamaica2. Bahamas3. St. Lucia4. Belize5. Barbados6. St.Kitts & Nevis7. Antigua & Barbuda8. Dominica

(A) Eligible firms •High growth potential•Agroprocessing or tourism sector•Operating in a country of SBDC network•Diagnostic validated by certified business assessors*

Complete Caribbean

Export diagnostic tool

* Caribbean Export will train and certify over 30 business assessors across the region in 2018 within and outside the SBDC network. A site visit by a certified business assessor is required for eligibility.

Business Diagnostic (Target: 200 firms)

Technical Audit (Target: 75 firms)

Technical Intervention (Target: 50 firms)

Capital Investment (Target: 25 firms)

Ensure integrity of diagnostic*

Eligible? Coordinate

technical audit

(C)Technical Service Providers (TSP)•Lumin Consulting at UWI?•Caribbean Export?•CHTA?•CARIRI?

Provide support or refer to

others

Conduct technical audit (1-day)

Accept to implement?

Conduct technical intervention

Pay 25% of the budget

Monitor and record progress

on Neoserra

Facilitate technical

intervention

Technical Assistance Plan (TAP) with recommendations and budget

Share data on progress

Support client with investment proposal and presentation to

the bank

Need capitalto upgrade

technology?

YesNo

Yes

No

Update M&E system

Start

Technology Extension Services (TES) in the Caribbean

Database of TES

providers

(D) Financial institutions / Development Banks •Commercial banks?•Eco-micro network?•Microfinance / Credit unions?•Grant programs?

Offer financing for technology &

equipment

Receive final payment

Technical Assistance Report (TAR) with rational for improvements

Investment proposal for debt or equity financing

Example of TES

– General business analysis, strategic planning, successive planning, executive coaching

– Financial analysis, activity-based costing

– Energy management

– Environmental, health, and safety • food safety, ergonomics, waste management,

compliance, pollution prevention, carbon footprinting)

– Information technology• computer software/packages for accounting,

planning, order entry, scheduling, inventory, such as MRP II, ERP

• sourcing and matching for Technology, supplier and vendor

– Referral to qualified private consultants, technology

centers, or other relevant assistance programs

– Lean operations• lean production and lean office,

• use of methods such as “5 S”, value stream mapping, pull systems, quick changeover,

• cellular manufacturing,

• just-in-time systems

• waste minimization,

• preventive maintenance, and

– Quality improvement• certification to standards such as ISO 9000, TS

16949, ISO 13485, ISO/IEC 17025)

• Use of statistical process control and methods such as root cause and six sigma

– Product development and marketing• lean product development, ideation, market

research, business development assistance, lead generation, technology validation

What is a cluster? Why clustering?

• Joint marketing to increase global market share • Training – co-investment in human capital• Advocacy with government and partners• Research and product development• Value chain improvement

Objectives for firms

• Local proximity: Face-to-face interactions to build trust and share knowledge• Lead by the private sector, supported or facilitated by BSOs• Stakeholders reach consensus on top priorities for the cluster to grow• Starts with quick wins: address low-hanging fruits• A mix of firm size – micro, small, medium and large, local, international• Connections with academic and training institutions

Key success factors / Best practices

• Collaboration multiplies spillover in the community• Increase protection of natural assets• The combination of cooperation and competition

fosters innovation over time• Firms that are part of a cluster are stronger than

those that are not• Higher productivity, higher wages• More successful start-ups• Attracts Foreign Direct Investment (FDI)

Objectives for gov./NGOs/dev. agencies

A cluster is a group of interconnected firms operating near each other that collaborate and compete to obtain a larger share of the global market.

Documents

Inclusive and sustainable economic growth through global