National Workshop on Subnational Innovation Systems and Technology Capacity Building Policies to Enh

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National Workshop on Sub-national Innovation
Systems and Technology Capacity Building Policies
to Enhance Competitiveness of SMEs(27-30
October 2006)ChinaOrganized
byUNESCAPBangkok, Thailand
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SMEs In Nepal, Its innovation Strategies

• Presented by
• Maheshwor Sharma Paudel
• Director General
• Government of Nepal
• Department of Cottage Small Industries
• Kathmandu.
• 27-30 October 2006

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Lumbini The Birth Place of Lord Buddha
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• Geographic Situation
• Nepal Lies between two big countries China and
  India
• It is a land locked Country
• Total land area is 1,47,181 sq km.
• 0.3 of the total land of Asia
• 0.03 of the total area of the Earth.
• Divided into three zones
• Snow Capped High Himalayas, 15 of total area
• Mountainous region including long terraces
  fertile valleys, 68
• Sub-tropical plain Region 17
• Land elevation from 70 mt. to 8848 mt form sea
  level,
• Highest Mountain Mt, EVEREST and other 8 highest
  peaks are in Nepal
• Lumbini, the birth place of Lord Buddha is in
  Nepal.

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Economic Situation

• Population 26 million
• Population Growth rate 2.2 per annum.
• The composition of Nepalese economy
• Agriculture sector 40
• Commercial sector 10
• Industry sector 10 out of which, Small and
  Cottage Industries are
• nearly 90 .
• Employment contribution by cottage and small
  industries 76
• Value addition contribution by Small and Cottage
  Industries 50
• Service sector and others 40
• Literacy of population 62
• Potential recourse is hydroelectricity, total
  capacity is 83,000 megawatt.

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Current Status of SMEs in Nepal
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Number of Large Scale Industry Register by
Category (Up to F.Y. 2005-06)
Note 1(US)74 RS (Nepalese Rupee)
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Capacity Building of SMEs in Nepal

• Policy Support
• Industrial policy 1992 and industrial Enterprises
  Act 1992 gave priority and provided tax
  incentives to SMEs.
• Role of Government determined as regulator,
  facilitator and monitor
• Private-Sector Encouraged
• Foreign Investment Technology Transfer Act 1992
  implemented 100 percent foreign investment opened
  for industry except traditional cottage industry
  and security-concerned Industry.
• IT Policy 2002 opened the door for IT and ICT to
  foreign-Investor too

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Institutional Support.

• Dept of Cottage and Small Industry (DoCSI)
  provides Various training to entrepreneurs
• Institute of Entrepreneurship and Institutional
  Development (IEDI) established.
• Industrial Estate (ten) are in operation to
  support industries.
• Micro Credit fund and fund for cottage and small
  industry created.
• Many Bank and Financial Institutions established
  and started financial support.

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Institutional Support cont.

• Butwal Technical Institute Provides
  apprenticeship-oriented training for many years
• IT park-established
• More than 1000 IT and ICT institutions are
  producing IT, ICT experts.
• One window-Committee provides incentives to the
  industries.
• Industrial-Promotion Board looks on every problem
  of industry.
• In this year, government with privates sector
  partnership established the fund of 2000 Million
  Rs (28.3 m US) particularly to revive sick
  industries

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Challenges and Problem SMEs

• Due to liberalization and globalization, SMEs
  have to face global competition.
• Large-Industries of Mass production are in
  neighboring countries China and India. It is
  difficult to compete with them.
• Nepal is suffering by insurgency for 12 years, it
  has deeply stricken to all the economic
  activities.

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Challenges and Problem SMEs cont..

• Nepal being a least developed country, There is
  difficulty of technology skilled manpower,
  financial resources etc.
• Infrastructures of development are poor such as
  electricity-power, transportation facility are
  not sufficient.
• Capacity of entrepreneur's is low. They can not
  develop relationship in international sectors.
  They are confined within boarder.
• Political Instability has created crisis of
  confidence in policy regime

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Opportunity for SMEs

• Due to globalization and liberalization the world
  in open, SMEs can take help according to their
  choice. They can enter the global-market.
• There is great chance for developing countries to
  adopt new technology from developed countries
  with appropriate means of technology transfer.
• Nepal become member of WTO, SMEs can be benefited
  by WTO regime.
• Foreign-investment is open and there are many
  incentives in technology-transfer.
• Government is playing a role of catalyst for
  private-sector. All the areas except
  security-sector are open for private sector.
• Bank and financial companies are many. They are
  searching the areas of investment.

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Opportunity for SMEs cont

• There is rapid growth of telecom, IT and ICT
  sector.
• The natural scene of the country is incomparable.
  1000 km long Himalaya-range, 8 highest peaks of
  the world including the Mt. Everest are in Nepal
• The topographical mismatch is there.
• Lumbini the birth place of Lord Sidhartha Gautam,
  Buddhism-holistic place of the world is in Nepal.
  
• Tourism Sector can flourish here.
• Life saving natural herbs such as yarshabgumga
  (Cordyceps Sinensis), Pachamle(five-finger) etc
  are the products of high mountain area.

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Areas of Improvement

• Solution of insurgency and political stability
• Policy-stability and create confidence in
  investor
• Adopt appropriate technology and use of IT and
  ICT.
• Focus on institutional-development such as IT
  parks, Institutes of Technology, Technical
  Schools.
• Provide infrastructure such as electricity
  transportation, telecom etc.
• Financial support, Create Venture Capital Fund.
• Strengthen Marketing Network inside and out side
  of the country.
• Development RD aspects.
• Incentives need to be provide for RD.

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Areas of Improvement

• Effort should be focused to develop business
  incubation centers in coordinated way by various
  sectors such as-management colleges universities
  IT and ICT- institutions.
• To enhance Business Development Service
  networking and Co-ordination in various agencies
  is necessary.
• Provide financial support to small and young
  enterprises.
• More efforts should be done to attract the
  Foreign-Direct-Investment (FDI )creating
  favorable environment.
• The role of private sector is vital for the
  development. So it is necessary to make the
  environment of confidency and to facilitate the
  private sector.

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Conclusion

• Least developed countries are facing various
  problems. To get out from the vicious circle of
  poverty, they have to be innovative and use new
  methods and technology for the development. The
  role of SMEs is very important in these countries
  because they are the major part of economy. So it
  is important to build the capacity of SMEs by
  adopting new IT and ICT techniques and by
  technology transfer.

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• Thank you