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  1. 1. Draft of Progression Report of Lao BDS Provider Network (BDSP-Net) Sith Soukchaleunphone SME Development Advisor Back ground The significant roles of small and medium-sized enterprises (SMEs) play for the national economic development in the Lao Government policies and strategy documents. Therefore, supporting to SMEs is recognized in the private sector development, more specifically, the Prime Minister’s Decree No. 42 on the Promotion and Development of SMEs and the SME Development Action Plans 2006 – 2010 as well as 2011 - 2015. Business Development Services (BDS) are widely regarded as one of the success factors for SMEs promotion and development. A few examples of BDS are training, consultancy, management services, marketing, packaging, facilitating access to finance, product design, quality assurance, distribution logistics, information, internet, IT and computer services, business linkage promotion, accounting services, courier and advertising. “BDS markets” encompass providers of business services, both commercial and publicly funded, SMEs who use BDS and the actual provision. Potential BDS providers have been identified and brought together in (up to now) many meetings to discuss the provision of BDS to Lao enterprises. Based on this, Department of Small-Medium Enterprises Promotion (DoSMEP) sees the enhancement of BDS provision as a priority and consequently, several measures of the SME Development Action Plan 2011 - 2015 have been geared towards supporting SMEs with business development services. One of these measures is the formation of a BDS Provider Network. The Asian Development Bank (ADB) has supported the formation and launching of a BDS Provider Network in 2011-2012. Simplified expressed, the BDS Provider Network is a platform, where providers can market their services effectively. For the demand side, (the SMEs) this platform provides an easy accessible and transparent service point, where SMEs can find support and being linked up to BDS. The network should be understood as a joint imitative of the SMEPDO and Business Development Service Providers (BDSP) to facilitate Business Development Services (BDS) to enterprises. Thus, the network combines the know-how and strength of SMEPDO with those of the various Business Service Providers. SMEPDO expects to contribute with this to a sustainable market development for BDS, which ultimately results into a better performance of SME through enhanced skills and knowledge, acquired by BDS. SMEPDO is forming a hub which hosts a BDS provider pool. This hub is called herein after Business Support Centre (BSC). It uses a database as information- and management system. This database contains information about BDS providers of the provider pool. Thus, support requests of SMEs can be addressed by searching suitable providers in the database. A joint marketing and awareness creation should stimulate the awareness and the demand for BDS among SMEs. The purpose of establishing the BDS Provider Network is to increase technical support for SMEs and create more BDS providers to enable SMEs to more easily access to services and receive services that meet their requirements, become a center full of knowledge and techniques, provide
  2. 2. services assistances to SMEs to help them develop and thrive, and to upgrade capacities of service providers to provide quality and reliable services. Lao BDS Network were comprised of four main activity areas those have been identified in the first annual work plan comprises the timeframe from October 2012 – May 2013 and second revision of annual plan for 2013-2014, the four main activity areas are: 1. Supply side development – expand the BDS provider pool and support providers to establish a market oriented service offer 2. Demand side stimulation – awareness creation among SMEs for the potential benefits of BDS, Marketing of the BDS provider network 3. Strengthen market platform for BDS by fostering the network structure and network sustainability 4. Staff development – transfer necessary skills, knowledge and attitudes to the (SMEPDO) staff in charge for the network facilitation I. Actual implementation of BDS Activity Plan 1. Conducted research on BDS Market Assessment (demand and supply side) in November 14, 2008. The initial target for this assessment was 200 BDS providers in Vientiane Capital, Savannakhet and Louangphabang. After the actual field survey, due to the fact that many companies have changed the telephone number or addresses or closed down, only 85 BDS providers are finally reached. However, results of assessment pointed out that this report is insufficient information and not reach its objectives because the most of all information of BDS market demand side is secondary information that gathered by interviewing the providers but not directly from SMEs. The information could not be clearly identified the target BDS market and the needs of demand side (please see the report of BDS Market Assessment 2008). 2. The First kick of BDS Workshop was taken place on July 15, 2012 at Vansana Riverside Hotel the workshop objectives is to create a basic understanding of BDS Network, to discuss and approve the SDS Network’s regulations, to do election of BDS Net Advisory Board and its members. The workshop identified and agreed the lists of BDSP Net Advisory Board and its members elected as below namely: 1. Lao-India Entrepreneurship Development Center (LIEDC) is a president. 2. Enterprise & Development Consultants Co, Ltd (EDC) is a deputy. 3. Laos-Japan Human Resource Development Institute (LJI) is a member. 4. TACDO Microfinance Management Center is a member. 5. Emerging Markets Consulting (EMC) is a member. 6. Acmin Consulting service Co,Ltd is a member. 3. The Ceremony of BDSP Net Launching (BDS): The officially launch of the BDS Network Workshop by on Monday Sept 10, 2012 at Lao Plaza Hotel, participated by Mrs. Khemmany Phonsena (Vice Minister of MOIC), Mr. Somdy Inmixai (DG of DOSMEP), important guest and BDSP Net members. The BDSP Net Launching workshop was conducted in parallel with BDS Provider’s products and services exhibition and information exchange among consultancy companies (None available report but please the BDS progress PPT).
  3. 3. 4. Participated the Lao-Vietnam Exhibition at Lao-ITECC on Dec 4-8, 2012, there are five representatives of the BDS Network’s members were invited to attend the event in order to represent the advertise and promote the products and services of BDS Network’s member, the marketing tools they used is to show their experiences, achievement and products they are having, including the video and slide show, brochures, handbook and providing the SMEs (customers) on consultation at their boost, (please see the Lao version report by DOSMEP). 5. Meeting on BDSP Net Capacity Strengthening on 27/12/2012, at Lao Plaza Hotel, participated by Mr. Soutchay Sisouvong (Deputy of DG of DOSMEP), important guest and BDSP Net members, the workshop was to discuss the Annual Activity and Budget plan 2012 – 2013 for BDS and its market development, to discuss how to strengthen the BDSP Net’s Members, and how to identify and access the target market (please see the first Annual Activity Plan 2012-2013/GIZ-HRDME and DOSMEP Field of Cooperation on BDSP Net Development). 6. The Proceeding Annual Work Plan Workshop was held at the Lao Plaza hotel on 27th December 2012 with participated by 35 owner-managers and representative from Ministry of Industry and Commerce, especially the technical staff from DOSMEP, the meeting has discussed and agreed on the BDS annual planning and the meeting also got a recommendation to emphasize the study visit because it would be a first step of initiative BDS development in order to visually understand, especially BDS in Lao is very new for all of us. (Please see the proceeding report of annual work plan of BDS Network, December 2012). 7. Advisory Broad Meeting in March 15, 2013. Attended by 10 participants including broad of BDS Advisory and members, the participants have discussed on BDS Network’s capacity building according to annual work plan of the BDS Network on Dec 27, 2012 at Lao Plaza hotel. The objectives of meeting is to discuss on summary of demand side information, particular targeted SMEs in order to provide and facilitate the right services for SME needs. To agree the prioritized activity needed to be implemented in April 2013, based on the result of discussion the study visit activity is also planned and prepared. 8. Conducted a study visit to exchange knowledge about the Business Development Service Provider Network (BDSP-Net) from 24-27 April 2013 in Chiengmai province, Thailand, participated by 10 people including 7 people from the executive board and 2 people from the network secretariat and 1 advisor from GIZ HRDME. Objective of the study tour is to provide the private and public sector participants of the visitation with firsthand experience on the overall mode of operation of BDS and SMEs development including understanding of the role played by different actors and the regulatory & support services offered for the smooth operation of the BDS provider network. In the visit important discussions and experience exchanges were made presentation, questions, and documents both electronic and hard copies were collected and important and guiding lessons are secured in connection to innovative ways of BDS network and its members in specific areas. (Please see the Lao version report of study visit by DOSMEP).
  4. 4. Presentation and Lecturers at IPC1 Before field visit, the team had a meeting with ChiangMai BDB Network that took place at Industrial Promotion Center Region 1 (IPC1) and facilitated by IPC1, and co-chaired by DG of IPC1 and DDG of DOSMEP. There are 4 senior representatives from multi BDS Network’s organizations to provide their presentations such as: from IPC1, Northern Network of Service Providers for Small and Medium Enterprises (NNSPSME), Northern Consultancy Network Association –(NCNA), Industrial Partner (IP) each lecturer provided their presentation on: 1. 2. 3. 4. Organization’s roles, functions and management Plan development in order to implement the strategy Products and services and operation MIS and Information distribution Places Visit: all places visit, they are the SME Companies that get supported by IPC1 through BDS Providers Network. The participants visited 4 important and successful companies/institutes that get supported technical assistance by IPC1 (BDS Network) through BDS Providers namely: 1. Far Eastern University is a private University, the University was established in the year 2000 (2543). The Far Eastern University determines to develop students to have entrepreneurship mind which excellency in academic, professional career and life, and is the one of the entrepreneurship society, 2. Rainbow farm: is organic agriculture farm of Mr. Tavanh HangsoungNeun, is an individual project to support and promote the organic rice development in order to provide the domestic market needs, to protect environment and to release the debt. Rainbow farm have the group of members (the rainbow now has a 300 families, enter the member registration) and has two agencies in Nhongkhai and Vietnam, and all members will be get training 2 times a years on rice production and processing until the end of market (consumers) and beside that the participants also visited more 2 companies namely: Tao Garden Health Spa & Resort: and Poles star Companies, both companies is also highlighted in this case, they used to face with many problems during running business such as: costly overhead expenditures, no profit and low productivity but both of them have been able to combat their constraints because of BDS provider’s advisory service for them. Lesson learned: 1. To understand the basic Thai BDS Network’s back ground and strategy. 2. To learn the approach of BDS Network Management for supporting and promoting the business sector. 3. To learn the approach of advisory service providing to business sector. 4. Thai government has a big attention and willingness to promote and support the BDS Development and its implementation. 9. A Dissemination Workshop on the Outcomes from the Study Visit to Exchange Knowledge about the Business Development Service Provider Network in Chiengmai province was organized on 11 June 2013, at Lao Plaza Hotel, with total participation of 30
  5. 5. people, the most of them were from BDS Network. The DOSMEP has facilitated all representatives/providers participated the study visit from different organizations, has a chance to present their lesson learned from Chiangmai and provide their comments in order to improve Lao BDS Network and how Providers and SMEs can be linked and got informed (please see the meeting report Lao version with DOSMEP). II. Outcome from activities implemented: 1. BDS Network is currently having totally 23 member parties which include both public and private sector (please see the Annex1 of the list of BDS members). 2. What service/benefits do providers get from BDS Net? And what services/benefits do BDS Providers provide for SMEs? How many SMEs receive the service from Providers? (it can be linked to table2). It is difficult to monitor, evaluate and document the indicators, it seems BDS in Lao is in the stage of stimulation but at least we have some information from ES survey to be BDS indicators. Many SME Development organizations/INGOs have known already that almost of all trainings and technical assistance services have been traditionally BDS delivered to SMEs by NGOs, (free of training including DSA provided). 3. 4. 5. 6. 7. III. Questions below: None available information: so we needs to talk with Providers and some SME. Is BDS delivery effective? Do they reach intended beneficiaries? Did the services address their needs? Did their SME performance improve? Performance – How efficiently and effectively the services were delivered to their intended audiences, and Impact – How BDS interventions translate into SMEs and business opportunities, economic growth and increased employment among the poor, and Client Satisfaction – How much value clients place on the BDS and are they still interested to use the BDS Providers?. The Challenges of Implementation: 1. Training and technical assistance services have been the traditional BDS delivered to MSEs by NGOs, free of training and get DSA. 2. BDS functioning and management is not clear, the facilitators/DOSMEP staff are now insufficiently capable to support the BDS Network, thus they needs GIZ-HRDME to continuously support them on outsource of consultants. 3. High costs of delivering certain BDS. 4. Inability or unwillingness of beneficiaries to pay for such services, 5. Difficulty in monitoring, evaluating and documenting the impact of such services, no report and shortage of follow up person. 6. The BDS Market are not very clear for BDS Network. 7. BDS Providers are reluctant to work together and share the information because they think they are competitors.
  6. 6. IV. Recommendations 1. BDS strategy and functions needed to be reviewed and redevelop in order to be in line with BDS Market requirement in both side providers (supply side) and SMES (Demand side). 2. DOSMEP and GIZ-HRDME should concentrate more reality of situation of Lao BDS, DOSMEP’s roles and capacity, SME when developing and elaborating the Activity Plan. 3. The Activity should be prioritized and appropriate with DOMEP role, capacity, budget and time frame, in this case we can observe from many previous issues and lesson learned of Annual Activity Plan implementation. 4. DOSMEP needs to consider and identify BDS Activity implementer and responsible person, what capacity needed for smoothly and efficiently implementing the BDS development activity.