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    How TPOs Compete: A Report on the World TPO Conference

     

     
     
    © International Trade Centre, International Trade Forum - Issue 1/2005

    Photo: Malta Enterprise

    At a time of fundamental, accelerating changes in the global economy, leaders of trade promotion organizations from around the world met to discuss their future as players in national trade development and business competitiveness.


    Co-hosted by Malta Enterprise and ITC, the 5th World Conference of Trade Promotion Organizations (TPOs) brought together 145 senior managers from 69 countries in St Julian's, Malta, from 1-2 October 2004. The meeting highlighted innovative practices that help countries gain competitive advantage.

    The conference, first organized in 1996, takes place every two years, and includes representatives of TPOs from both developed and developing countries. They share views on trends in demand for their services, and debate presentations made to the conference.

    The 2004 conference launched awards in seven categories to reward innovative, practical contributions of these organizations to trade development in their countries.

    The conference also featured discussions with keynote speaker Edward De Bono, an authority on lateral thinking.

    Adjusting to trade trends



    The first conference in Cartagena (1996) addressed the impact of the new multilateral trading system, in the wake of the creation of the World Trade Organization. The Santiago conference (1998) followed with a closer look at trade promotion tools. In Marrakech (2000), participants addressed issues related to the digital economy, and began to review the challenges of public-private partnership and impact assessment. The turbulent business environment was the theme of the Beijing conference (2002). In Malta, the focus was on innovation and practical action as a response to rapid evolutions in global trade.

    Major trends under way in TPOs include combining trade and investment promotion; a new emphasis on clients; better ways to measure performance; and ways to optimize staff performance. These have emerged in the context of government budget cutbacks and growing demand from firms, business associations, other government agencies and parliaments.

    Linking trade and investment



    Many TPOs are combining the functions of trade and investment promotion. Among trends driving this are business demands for a "one-stop shop" for trade support services; a push for cost efficiency; and the impact of changing trade and investment patterns.

    Despite these trends, some organizations are opting to stay separate. Merging can be lengthy and painful, and specialization in serving clients can be lost.

    Some pointed out that it is not enough to put two agencies under one roof. There needs to be a strategy putting them together.

    In the final analysis, the key is to focus on goals, rather than structure; whether trade and investment promotion is merged depends on country size, business culture and cost efficiency.

    In either case, both trade and investment promotion services find themselves addressing the growing impact of regionalization.

    A stronger focus on clients



    TPOs in the forefront are reaffirming that the export enterprise is their primary client. They are setting ambitious goals to expand their number of business customers - and charge for services they provide to them. Better customer service is following. Firms are demanding more value-added services. TPOs are responding by using technology innovatively (such as to track requests for export information, online applications to trade fairs, standard responses to most frequent business questions). This frees up TPOs to complement basic services with more specialized, in-depth responses to selected clients.

    For TPOs to respond with customized services, they must continue to upgrade the skills of their staff, extend their partnerships and improve ways to monitor and measure client satisfaction and behaviour.

    Optimize staff resources. The best trade leads and infrastructure are not enough without motivated and qualified staff.

    TPOs with high staff retention rates recommended managers to centre on people.

    Build clear objectives into job descriptions.

    Individual performance assessments and financial incentives can be tied to organizational targets, as some TPOs are now doing. Given the fast-changing export environment, both staff rotation and training that specifically relates to new client needs are among the ways that staff can recharge their batteries and improve productivity.

    Do evaluate, but keep it simple



    It's not easy to measure performance, because growth in exports depends on a partnership with firms. But participants agreed that TPO performance can and must be measured. Many urged to keep evaluation simple. With limited resources to monitor performance, TPOs should streamline the indicators, adopt user-friendly technology and simplify the process of maintaining data from one year to the next.

    Many tools are being developed to do this at every stage, from input to output to impact. One tool that many are using is a balanced scorecard system. Customer surveys remain important but must not be overused - survey fatigue among clients is a danger. It's also important not to neglect "intermediate" indicators of value, such as company contributions to participation in promotional events.

    Doing more with less



    For most TPOs, budget cutbacks are a fact of life. The trend of managing TPOs as a business is an outcome of the trend towards budget cuts. TPOs are learning to cut costs, and increase revenues. Among the ways they are doing it: shifting resources from trade promotion to investment; cutting grants to exporters; increasing revenue by cost-sharing and offering targeted consulting services, especially those with high value; and leveraging funds and expertise, by partnering with universities and research institutions.

    In the process, many TPOs, particularly in developing and transition economies, have to reconcile development objectives with revenue-raising objectives - not always an easy task.

    Participants at the conference had a wealth of information and experience to answer most of the questions raised. The challenge is to tap this information on an ongoing basis, rather than every two years.

    For more information about the World Conference of TPOs, see http://www.tpo-net.com


    Philip Williams, ITCSenior Adviser on Trade Support Institutions, contributed to this report.