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SOUTH-SOUTH COOPERATION for DEVELOPMENT of SMALL and MEDIUM ENTERPRISES (SMEs)

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Title: South-South Cooperation for Development of Small and Medium Enterprises (SMEs) Author: Asef Last modified by: Uspenskiy Created Date: 8/8/2008 4:15:15 AM – PowerPoint PPT presentation

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Title: SOUTH-SOUTH COOPERATION for DEVELOPMENT of SMALL and MEDIUM ENTERPRISES (SMEs)


1
SOUTH-SOUTH COOPERATION for DEVELOPMENT of SMALL
and MEDIUM ENTERPRISES (SMEs)
  • Tajammul Hussain
  • Director General (International Affairs) -
    COMSATS

2
Outline
  • Introduction
  • International Cooperation for Sharing Knowledge
    and Technology
  • Need for SSC Shared Goals and Challenges of the
    South
  • South-south Cooperation More Promising and
    Appropriate?
  • The Potential of South-south Cooperation
  • Small and Medium Enterprises Development
  • Scenario of SME Development in Pakistan
  • COMSATS Activities in South-South Collaboration
  • Conclusions

3
INTRODUCTION
  • The concept of South-South cooperation formally
    emerged as a universal principle during the 1970s
    .
  • South-south cooperation can contribute to the
    achievement of MDGs.
  • South-South cooperation is about the tremendous
    force of solidarity, with which we can overcome
    even the biggest challenges.

4
INTRODUCTION
  • No single country, even the most advanced among
    developing countries, has much hope of reaching
    individually expected growth and development and
    influencing outcomes of international agenda.
  • Our countries can collectively play a more
    effective role in achieving development
    objectives and in shaping international relations.

5
INTERNATIONAL COOPERATION for SHARING KNOWLEDGE
and TECHNOLOGY
  • The notion of international cooperation came to
    existence with the UN charter, which pledges to
  • employ international machinery for the
    promotion of the economic and social development
    of all people.
  • Technology co-operation enables the sharing of
    risks, rewards and progress of technology
    development and enables co-ordination of
    priorities.

6
International Cooperationcontd.
  • International Cooperation can focus on
  • Sharing knowledge and information, between
    developed and developing countries
  • Coordinating RD priorities in different national
    programmes
  • Pooling risk and reward for major investments in
    RD, including demonstration projects
  • International Cooperation can be among
    South-South countries or North-South countries.

7
NEED for SSC SHARED GOALS and CHALLENGES of the
SOUTH
  • The countries in the south generally share
    certain commonalities such as similar
    developmental experience and are also faced with
    common challenges such as high population
    pressure, poverty, hunger, disease, environmental
    deterioration, brain drain, lack of indigenous
    research and commercialization etc.
  • In view of this, south-south cooperation is
    clearly becoming more relevant.

8
SOUTH-SOUTH COOPERATION MORE PROMISING and
APPROPRIATE?
  • The private sector of developed countries aims at
    maintaining their technological edge over the
    developing countries, and hence is averse to
    sharing its technology
  • The interest of many developed countries in
    helping developing countries seems to be receding
  • South-south trade has been rising at 11 annually
    for the past decade.
  • The LDCs could find economic and sustainable
    solutions to address their needs and problems, by
    sharing and learning from the experiences of
    other developing country counterparts.

9
THE POTENTIAL of SOUTH-SOUTH COOPERATION
  • The developing countries have many things in
    common, and their capacities and resources are
    often complementary and exist at different but
    relatively close levels of development.
  • This would facilitate the transfer of technology
    and exchanges of experience and other resources
    among these countries.

10
The Potentialcontd.
  • Today several developing countries have
    diversified their economies and have a large
    production capacity for goods and services.
  • The information society revolution has opened up
    new opportunities for developing world in
    business especially services from north - south
    and south south. However, it needs highly
    trained human capita

11
The potentialcontd.
  • The accelerating trend towards globalization and
    trade liberalization has created new
    opportunities for exchanges of goods, services
    and information among developing countries.
  • Today several developing countries have human
    resources properly trained in institutions of
    high technical quality.
  • In addition to Governments, new participants in
    international cooperation are continually
    emerging in developing countries, for example,
    participants from civil society and the private
    sector, which play a growing role in South-South
    cooperation.

12
The potentialcontd.
  • Increasingly South-South cooperation is seen as a
    necessity and fundamental component of
    international cooperation for development.
  • South-South cooperation completes North-South
    cooperation and fits perfectly into triangular
    cooperation arrangements where the know-how and
    technology of one or several developing countries
    are combined with financial support from one or
    several developed countries to provide assistance
    and to transfer technology and know-how.

13
Small and Medium Enterprises Development
14
INTRODUCTION to SMALL and MEDIUM ENTERPRISES
(SMES)
  • Small and medium enterprises (also SMEs, small
    and medium businesses, SMBs, and variations
    thereof) are companies whose headcount or
    turnover falls below certain limits.
  • Two types of SMEs
  • Manufacturing, Manufacturing-Related Services and
    Agro-based Industries
  • Services, Primary Agriculture and Information
    Communication Technology

15
Introduction tocontd.
  • SMEs have been the backbone of economic growth of
    an economy as an engine for the industrial
    development
  • The potential of SMEs to promote domestic-led
    growth in new and existing industries and to
    strengthen the resilience of the economy in a
    competitive and challenging environment are
    inarguable
  • Economic growth in developed countries such as
    China, Japan, South Korea, Taiwan and many
    others, were significantly generated by SME
    activities.

16
THE NEED to DEVELOP SMEs
  • On several social and economic grounds, small and
    medium-sized enterprises (SMEs) are of
    overwhelming importance in most Asian countries.
  • The SME sector accounts for upwards of 90 per
    cent of firms outside the agricultural sector of
    East and South-East Asia, and of Japan as well.
  • It is also the biggest source of domestic
    employment, providing a livelihood for over three
    quarters of the regions workforce, especially
    women and the young.

17
The need tocontd.
  • The SME sector will remain the backbone of
    virtually every economy in this region and, for
    that matter, of the world in the foreseeable
    future.
  • The SMEs suffer from a variety of structural and
    institutional weaknesses, which have constrained
    their ability to take full advantage of the
    rapidly advancing process of globalization and
    adjust to the economic liberalization measures.

18
The Need tocontd.
  • These weaknesses include
  • the relatively narrow base of the sector and its
    focus on low value added products
  • the absence of an adequate information
    infrastructure
  • the technological obsolescence of much of the
    capital stock
  • the inadequacy of the existing support services
    for entrepreneurship development and promotion
  • a relatively low level of integration in global
    value chains.

19
The Need tocontd.
  • SMEs also fail to realize their full potential
    for creating productive employment because of the
    highly uneven dissemination of information
    resources.
  • There is therefore an urgent need to enhance the
    international competitiveness of developing
    countries SME sector and promoting the increased
    inflow of foreign investment and technology.
  • One of the major bottlenecks in this context is
    the lack of knowledge at the end of SMEs.

20
OPPORTUNITIES for SOUTH-SOUTH CO-OPERATION in
SME DEVELOPMENT
  • The revolution in ICTs has created unprecedented
    opportunities to narrow the knowledge gap between
    the North and the South
  • Through electronic mail and the internet, data
    can now be instantly transferred across vast
    distances, providing science-poor countries with
    the possibility of access to the latest
    scientific and technological information

21
Opportunities forcontd.
  • The present information age will help SMEs
    exchange information on products, technologies,
    human resources, etc. freely, overcoming
    obstacles of distance and borders.
  • Trade via the Internet has now become an
    intrinsic part of an increasingly large number of
    SMEs in the developed countries
  • About one half and one third of the medium- and
    small-sized enterprises in Europe maintain an
    e-mail contact address or a presence on the World
    Wide Web

22
Opportunities forcontd.
  • There are now greater scope and more
    opportunities for inter-firm linkages for
    enhanced collective efficiency, technological and
    innovation capabilities, and hence
    competitiveness.
  • Subcontracting and outsourcing relationships now
    cover processing and manufacturing activities and
    services of high value addition and technological
    sophistication.

23
CHALLENGES to SOUTH-SOUTH CO-OPERATION in SME
DEVELOPMENT
  • One of the most critical challenges facing the
    developing world is how to bridge the huge gap
    between the North and the South in the production
    and utilization of scientific and technological
    knowledge.
  • North-South divide in scientific output and
    technological innovations is constantly widening.
  • Reducing these disparities will be a major
    challenge facing South-South co-operation in the
    21st century.

24
Challenges tocontd.
  • Competition has become increasingly difficult
    among the global and regional economies and
    enterprises, SMEs included.
  • Consumer preferences and market standards have
    become more sophisticated and exacting .
  • Market demand is constantly changing, a trend
    facilitated not least by the rapid advances in
    ICT, bio-engineering and new materials sciences .

25
POLICY IMPLICATIONS and OPTIONS for SME
DEVELOPMENT
  • The new development requires a new or different
    mindset in the promotion of SME development
  • SME development can be leveraged through the
    maintenance of ongoing access to the available
    store of global information and knowledge
  • Another is through participation in clusters of
    firms, or in networks of inter-linkages backward
    with suppliers

26
SCENARIO of SME DEVELOPMENT in PAKISTAN
27
SCENARIO of SME DEVELOPMENT in PAKISTAN
  • Pakistan became the slowest- growing economy in
    South-Asia during the last decade.
  • The slowdown is due to the trend slowdown in the
    gross fixed capital formation (GFCF) growth rate
    which is equally apparent in small and large
    scale enterprises.
  • Even more worrying is the lack of structural
    change, measured by the inertia in the structure
    of value-added and the size distribution of firms
    in the SME sector during the last two decades.

28
SCENARIO ofcontd.
  • The Pakistan Economic Survey 2001-02 reported
    that
  • .the foundation of industrialization could not
    be established without an efficient network of
    SMEs
  • Credit rationing constraints SME growth and
    investment in Pakistan by increasing both the
    cost and risk of growth and investment.
  • Poor infrastructure, particularly in the power
    sector, increases the cost of growth for SMEs.

29
SCENARIO ofcontd.
  • Low level of skill, training, and education among
    workers and management hinders the development of
    SMEs in Pakistan.
  • High market transaction costs and inefficient
    formal contract enforcement inhibit the
    development of SME clusters and subcontracting
    networks, imposing high inventory costs and,
    perhaps, forcing SMEs into suboptimal
    diversification.

30
SCENARIO ofcontd.
  • Lowering the financial constraints, judicial
    constraints, fiscal and regulatory constraints,
    infrastructure constraints and human resource
    constraints would have a significant positive
    impact on the growth of SMEs in Pakistan.
  • These constraints can be reduced with the help of
    other developing countries in the South by
    experience, knowledge and technology sharing.

31
Role of COMSATS in South-South Cooperation
32
Role of COMSATS in South-South Cooperation
  • COMSATS has conducted various capacity building
    programmes in the developing countries of South
  • COMSATS launched various programs and projects
    which include COMSATS University, Internet, IT
    Centre in Syria, Telemedicine and more than 70
    independent and joint international workshops,
    conferences, seminars and has sponsored many ST
    events for capacity building for its member
    countries.
  • COMSATS facilitates the scientists from its
    member countries by mobilizing technical human
    resources from both the North and the South

33
Role of COMSATS in South-South Cooperation
  • COMSATS in collaboration with UNESCO initiated
    South-South Technical Cooperation Programme for
    its member countries including Egypt, Sudan and
    Pakistan. ( Jun 07 Dec 07)
  • Application of Predictive Maintenance Methods to
    General Industry
  • Concept of Technology Parks in the Light of
    Global Experiences
  • Human stem cell Principals and Applications
  • South-South Technical Cooperation Programme,
    COMSATS Member Countries 2008-09

34
Role of COMSATS in South-South Cooperation
  • South-South Technical Cooperation Programme with
    ISESCO
  • 8 training workshops and seminars for capacity
    building will be conducted in Malaysia, Nigeria,
    Lebanon, Kuwait, Pakistan, Syria, Morocco and
    Jordan
  • Trilateral Collaborative Research Programme
    (2007-2009) for the Project titled, Effective
    utilization of Nile Medicinal Plants
  • ICCBS (HEJ Research Institute of Chemistry,
    Karachi , Pakistan
  • National Research Centre (NRC) Cairo, Egypt
  • National Centre for Research (NCR) Khartoum,
    Sudan

35
Role of COMSATS in SME Development
  • COMSATS, UNIDO, SMEDA jointly developed IIN
    (Industrial Information Network) in Pakistan.
  • COMSATS and INSME collaborated to stimulate
    transnational cooperation and public and private
    partnership in the field of innovation and
    technology transfer to SMEs in COMSATS member
    states
  • COMSATS is a member to this International Network
    and intends to initiate high growth innovative
    SMEs in its member states
  • Industrial Information Network Initiated jointly
    by United Nations Industrial Development
    Organization (UNIDO), COMSATS and some other
    partner organizations in the year 2001

36
CONCLUSIONS
37
Conclusions
  • The South must intensify co-operative efforts to
    enhance its indigenous capacity to generate,
    manage and utilize science and technology in ways
    that address its own basic needs
  • For this to take place, regional and
    inter-regional efforts must be vigorously
    pursued.
  • The ultimate goal of these efforts should be to
    develop collaborative programmes in capacity
    building for policy formation and building human
    capital for the development of SMEs.

38
Conclusions
  • South-South cooperation on issues related to
    technology cannot be isolated from the wider
    trends of globalization
  • South-South cooperation should start with basic
    units such as regional integration and then be
    extended to other developing countries as well as
    the global community.
  • A well developed SME base is capable of providing
    immense opportunities for SMEs to become catalyst
    in the economy

39
Conclusions
  • Cooperation between the countries of the South
    should take place to establish a more
    comprehensive approach towards SME development
    such as
  • increasing their access to financing
  • providing greater access to business facilities
    locally and abroad
  • enabling the business infrastructure
  • enhancing human capital development
  • Being adaptive in the use of information
    technology
  • Access to regional and international market
  • Sharing and transfer of technology

40
The End
  • Thank you
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