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    Is Your Trade Support Network Working? - A Checklist for the National Strategy-making Team

     

     
     
    © International Trade Centre, International Trade Forum - Issue 1/2002

    The Executive Forum on National Export Strategies is structured as a debate on "best practice" among "national strategy teams" from developing and transition economies. Each team consists of a senior public sector strategy-maker and a leading representative of the business community. Best-practice propositions are presented by ITC on the basis of research and then debated in plenary and more focused breakout sessions.

    For the debate, the trade support network has been defined as the institutions from the public and private sectors directly involved in ensuring that: (1) the national business environment is conducive to developing international competitiveness; and (2) all relevant trade support services are provided to the current or aspiring exporter.

    No single networking model has universal application. However, the conclusions reached in Montreux provide a checklist of basic principles from which the national strategy-maker can make a fairly accurate assessment of whether his or her national trade support network is, indeed, working.

    My network operates within the framework of an export development strategy that specifies priorities and targets.

    Without strategic guidelines that are known to all institutions engaged in providing trade support services, the effectiveness of the network could be questioned. Each element of the network must work towards a common vision and common targets.

    My network includes decision-makers from public sector organizations concerned with key determinants of international competitiveness.

    For export performance to be sustained, trade support ser-vices provided directly to the business community must be underpinned by "export-positive" strategies for industry and agriculture, physical infrastructure (including telecommunications) and finance. The labour and education portfolios of government must also be directly supportive of the national export effort. Regular consultation among the national export strategy team and decision-makers in other ministries and government departments is critical to the national trade support network working within a best-practice environment.

    My network is sufficiently flexible to provide different types and combinations of trade support services to its various client categories.

    Client segmentation is essential given the differences in the nature of services required by different types of exporters. Specialization within the network is essential to effective client servicing. Client prioritization is also essential and certain trade-offs will need to be made among client categories if the network is to be focused and consistent.

    My network is fully demand-responsive.

    Resource limitations dictate that the network must focus on servicing specific categories of clients (for example, existing exporters, new exporters, potential exporters). Within the priorities established by national export strategy, the focus should be on ensuring that the demand for specific trade support ser-vices of high-priority categories is met. Experience suggests that demand is primarily for information and finance, irrespective of the priority category. If the network adequately services these two requirements, it has climbed the first rung of the effectiveness ladder: it has established credibility within the business community. Unless the network can satisfy clients' demand for services they think they need, it will not have sufficient influence to convince clients to avail themselves of the trade support services they may really need (i.e. competency development services).

    My network has an effective referral system.

    Network specialization and responsiveness to demand requires the network to maintain a referral system whereby the client can be directed to relevant members of the network and receive prompt attention. Best-practice scenarios suggest that a first-stop shop is more realistic than a one-stop shop. Ideally, the first-stop shop would focus on the information or finance aspects of the clients' demand, or both, and assist the client completing an "export-readiness review" to identify competitiveness needs and coordinate subsequent referrals to specialized trade support institutions in the network.

    My network gives top priority to standards and quality management issues.

    Quality and standards are becoming increasingly important determinants of international competitiveness and an enterprise's position in the international value chain. Proactive involvement of national standards institutes in the trade support network is essential. An internationally recognized quality-control and certification system will eventually be required to reinforce international competitiveness. But a progressive approach to establishing a comprehensive quality assurance infrastructure should be taken given the complexities and costs involved. Incentives should be available to encourage exporters to obtain international certification.

    My network caters to the trade support needs of the potential exporter of services.

    International trade in business and professional services is growing at unprecedented rates and there is considerable scope for developing and transition economy service companies to participate. However, services exporters require different types of support services than exporters of goods. The national trade support network must evolve special programmes to address these special needs. The creation of a national association of service exporters to handle basic information, coordination and advocacy functions is probably the first step.

    My network addresses the issue of competency development.

    Entrepreneurs and export managers tend to think they possess the necessary skills to be successful. They are often wrong. The national trade support network should not only have the capacity to train export managers, but the capability to generate demand for such training. Offering and effectively promoting "applied" training is a proven best-practice scenario. Close links between the information and training arms of the network are fundamental.

    My network gives precedence to "border-in" capacity development issues.

    The tendency is for the national trade support network to concentrate on "border-out" issues such as market information, buyer identification and market access. The emphasis is on servicing existing exporters and promoting existing export sectors. However, for the network to work effectively, it must pay at least as much attention on the border-in issues of developing new export capacities, increasing export "value-added", lowering transaction costs, accelerating the internationalization process and supporting new international entrepreneurs, as well as competency development. Prioritization of border-in issues often requires a complete switch in the mindset of export strategists.

    My network's border-in services include investment promotion.

    Investment promotion, and principally foreign investment promotion, represents a key aspect of a trade support network. Irrespective of whether the investment and trade promotion functions are provided by one or more agencies, the key point is that the networks investment promotion activities should include the promotion of "competitiveness enhancement" investment in existing export-oriented enterprises (joint ventures and technology and marketing-support ventures), as well as the promotion of foreign direct investment in "green field" projects.

    My network works to simplify the supply chains of local exporters and to raise their position in the value chains of international buyers.

    Successful networks work towards reducing the complexity and the time dimension of the export community's supply chain. This encompasses trade facilitation, assistance in sourcing materials and management, and post-transaction logistics and delivery. It also includes support to raising the profile of the exporter in the international buyer's supply chain. Support in the development of e-competence and e-trade capability is essential to both supply chain perspectives.

    My network is run like a business.

    It is extremely unlikely that the majority of trade support ser-vices can be self-financing. Within the business community, the demand and capacity to pay for information, training, advice, etc., are simply too limited for the network as a whole, and for most of the individual trade support organizations within the network, to cover costs fully. However, the network should work on principles of efficiency and client orientation. Charging for service, either directly or through other means, provides the basis for a business relationship to develop with the client. And each member of the network should endeavour to establish such a relationship.

    My network is effectively coordinated.

    While the network should be flexible, both in structure and approach, with each member of the network operating with a high degree of autonomy, it must have cohesion. The existence of a national export strategy provides part of the answer, and coordination provides the remainder. Coordination of the network should be the role of the national trade promotion agency, which should ideally also act as first-stop shop and referral centre. Effective coordination requires the network to be e-competent, e-linked and e-cooperative.

    My network is subject to performance assessment.

    It is difficult to assess the contribution of trade support services to competitiveness. Few evaluation tools measure the direct impact of the network's activities on trade performance. Yet some attempt should be made to objectively gauge performance and to measure impact. Such measurement provides the foundation for decisions to be taken on network and programme refinement and adaptation.