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Countries / Territories

Connecting to International Value Chains

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    Micro, small and medium-sized enterprises (MSMEs) in developing countries are crucial providers of jobs and income, and an essential vehicle for inclusive economic growth.

    But they find it hard to provide a differentiated, value-added offer that attracts partners such as foreign investors and multinational companies. In addition, they are not always supported adequately to address these challenges.

    ITC's Value Added to Trade (VA2T) focuses on the value that can be created and retained within a country on goods or services at each stage in the supply chain.

    VA2T:

    • acts as an impartial connector by using multi-stakeholder platforms to coordinate all aspects of growth and markets
    • fosters market links by establishing relationships with buyers and leading enterprises in value chains
    • helps balance the buyer perspective with the producer/MSME perspective in understanding market requirements
    • optimizes MSME competitiveness by reinforcing quality and efficiency of supply and production, implementing operational and managerial sustainability practices, driving innovation, and making connections with market opportunities

    The programme contributes to inclusive and sustainable development, as envisaged in the 2030 Agenda for Sustainable Development, by directing assistance to MSMEs that are run by, employ or benefit women, young people, and vulnerable populations (such as poor communities, refugees and displaced people) in developing countries.

    These initiatives include:

    The programme also contributes to global work to achieve the United Nations Sustainable Development Goals (SDGs).

    Transforming Sectors

    At the sector level, the programme conducts strategic analyses of change readiness, value chains and markets. It also:

    • enables stakeholders to design development strategies
    • builds platforms, industry and cluster associations
    • engages stakeholders in new 'alliances for action'
    • unites buyers, processors, producers and support-service providers

    VA2T programmes focus on sectors that include:

    Agriculture

    ITC's Alliances for Action (A4A) programme promotes inclusive and sustainable agricultural value chains with a model that works holistically to increase the competitiveness of producers and MSMEs and their compliance with environmental, economic and social requirements.

    A4A works with farmers, MSMEs and cooperative enterprises to capture market opportunities by strategically positioning diverse agricultural and value-added products in the 'responsible production and consumption' market segment.

    The programme focusses on developing value-added products and market innovations that maximize income-generating opportunities in local, regional and international markets. It also aims to coordinate bottom-up private-public dialogue and stimulate investment by building multi-stakeholder partnerships.

    In addition, A4A is a network that puts together different actors - producers, processors, buyers, support institutions - into strategic partnerships that build commercial linkages and enable the sharing of best practices and innovations in regional and national operating frameworks.

    This integrated support addresses:

    • living incomes
    • producer-association competitiveness
    • productivity
    • adapting to and mitigating climate change
    • adding value
    • empowering MSMEs to embrace change and adapt

    It also helps producers and MSMEs to become more competitive and resilient to shocks by diversifying crops, markets and incomes - all factors that are essential to participating better in trade.

    Textile and clothing

    ITC's Global Textile and Clothing Programme (GTEX) intervenes at enterprise and institutional levels. At the enterprise level, it builds capacities along the textile and clothing (T&C) value chain from logistics, materials sourcing, lean manufacturing, and product and design development to merchandising and marketing. It helps enterprises to improve their social and environmental performance by increasing resource efficiency and taking circular production approaches, among other initiatives. It then links companies to potential markets so that they can diversify their client portfolio and expand exports - with the ultimate goal of creating new jobs.

    GTEX also addresses financing, since companies need to pre-finance the development of fabrics and accessories when they move up the value chain and invest in modern, environmentally friendly technology.

    At the institutional level, GTEX improves managerial and technical operations of T&C-related trade and investment support institutions and helps institutions to upgrade their service portfolio to support enterprises. Such assistance includes linking national institutions to international partners.

    Tourism

    ITC helps MSMEs and service providers in the tourism sector to develop innovative and sustainable tourism products and expose them to international and regional tourism markets.

    The successful development and marketing of community-based tourism work as a crucial driver for the broader development of tourism in developing countries. It boosts revenues at different levels in the value chain by catalyzing an increase in tourism arrivals and spending.

    ITC strengthens destination branding and assists tourism sector associations to extend and improve their services. This activity, in turn, increases competitiveness in tourism and tourism-related value chains. It also enhances the quality of services (for example, community services, local and regional guides, ground-handlers, hotels, restaurants, and so on) with particular focus on food quality, safety and environmental sustainability.

    Digital entrepreneurship

    ITC's FastTrackTech initiative aims to accelerate the digital transformation of sub-Saharan Africa with a focus on internationalization.  This transformation will be a critical driver in implementing the Sustainable Development Goals.

    The programme supports digital entrepreneurship with online and onsite training, and advisory and coaching services aimed at building digital and business skills. This work helps to address a growing digital gender gap and favours young people while focussing on generating regional and international business and promoting investment. The Netherlands Trust Fund IV (NTF IV) initiative-Export development of IT and IT-enabled services, focuses on the same pillars but also aims to support SMEs.

    Improving the performance of MSMEs

    At the enterprise level, the programme conducts the following activities:

    1. Strategic Analysis: ITC identifies critical constraints to international trade and the potential to add value in selected MSMEs in specific sectors and markets by capturing market, sector and enterprise-level information. It does this by conducting competitiveness surveys   to collect baseline data and understand the needs of MSMEs. This analysis includes identifying and selecting the most appropriate resource requirements, export opportunities and target markets.
    2. Operations: ITC provides technical assistance and advisory services to MSMEs so that they can overcome pre-identified barriers to internationalization and value-addition.
    1. Market Linkages: ITC assists MSMEs by elaborating marketing and branding campaigns, identifying potential clients and connecting MSMEs to them, and helping MSMEs to diversify into new markets and segments.

    Focus areas include:

    MSME competitiveness

    The MSME Competitiveness Programme strengthens the competitiveness and sustainability of MSMEs by encouraging an entrepreneurial culture, transferring technical knowledge and skills, providing access to markets, and promoting the creation and growth of MSMEs. This work includes areas such as:

    • value addition and innovation
    • resilience and adaptive capacities
    • efficiencies and waste reduction in production and marketing operations
    • export packaging
    • access to finance
    • development of institutional services that better serve MSMEs

    Certification in small business internationalization − CSBI

    ITC offers Trade and Investment Support Institutions (TISIs) a capacity-building programme designed to help them strengthen their technical capabilities to support SMEs in their internationalization efforts. The CSBI programme trains and certifies technical staff and affiliated consultants of partner institutions on business competitiveness, SME internationalization, and export management. The programme uses a blended learning approach that combines face-to-face and online workshops, company visits, and supervised consultancy assignments to ensure participants are equipped with the necessary concepts, tools, and methodologies to assist SMEs that are seeking to internationalize their business.

    The programme's structure consists of three thematic pillars, face-to-face workshops, online modules and a supervised field assignment where participants assist local SMEs.

    The programme’s structure

    Access to Markets (AtM): Export marketing, branding and sales

    For most SMEs, finding new markets, accessing and keeping them are often daunting tasks. In most cases, managers decide to enter new markets without the right market knowledge, the right offer and a lack of adequate resources, and therefore without a relevant marketing and branding strategy. Often they also access markets that are not right for them.

    In this respect, a manager must be able to answer the following questions to make the right decisions:

    • Which markets should I target?
    • What are the needs and preferences of foreign customers?
    • Who are my competitors in these markets?
    • How could I best leverage my strengths and minimize my weaknesses to leverage new market opportunities?
    • What is the overall macro environment, and what are the market entry requirements for these markets?
    • How should I position my brand?
    • Will my product be relevant for these new markets, or how should I adapt them?
    • How should I price my products, taking into consideration their added value, the cost of transportations and insurances, Incoterms 2020 rules?
    • How to best communicate with customers and which digital solutions are best leveraged? In which trade shows/fairs should I participate?
    • What are the cultural differences between my culture and target market cultures, and should I best negotiate with them?

    The Access to Market programme (AtM) aims to elevate a business to an optimum level of strategic and operational marketing performance by integrating ITC's marketing, branding and sales expertise and solutions into the following R3 sequence:

    r3

    Quality and standards

    Quality is key to competitiveness. Buyers expect suppliers to meet technical requirements for product characteristics and production methods. These requirements are set in the form of

    • standards
    • technical regulations - including sanitary and phytosanitary (SPS) measures to protect people, animals and plants from diseases, pests and contaminants
    • conformity assessments

    Increasingly, major buyers also expect suppliers to meet social and environmental sustainability requirements.

    ITC helps MSMEs add value by improving their ability to meet technical requirements and prove value by demonstrating compliance. ITC brings together policy, institutional and enterprise-related dimensions to develop effective ways to overcome deficits in information, capacity, infrastructure, and policy awareness. This improvement provides impetus to MSMEs and reinforces their quality competitiveness.

    ITC works with:  

    • policymakers to create a conducive environment
    • conformity assessment bodies to improve capacity in demonstrating compliance with technical regulations and SPS measures
    • enterprises to improve quality and comply with standards and technical regulations

    E-commerce

    E-commerce is a significant channel for international trade and one that offers the potential for renewed economic growth, both domestically and internationally.

    ITC's ecomConnect programme offers a 3-pronged approach to meet the explosion of interest from SMEs in selling online. It helps SMEs to get online quickly, build fundamental skills and boost their confidence while ensuring mid- to long-term sustainability:

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    1. ecomConnect Booster (eB): Assisting selected SMEs in digitizing their products/services, integrating existing online marketplaces (e.g. Jumia, Amazon, Etsy), and supporting their online communication effort to boost sales domestically and internationally while assisting them with their drop-shipping delivery through domestic partners and ITC's international partners like DHL or UPS. Online learning with online webinars and e-learning modules will also allow SMEs to reach a broad audience at different levels of digital maturity and to transfer the knowledge and skills covered by eB.
    2. ecomConnect Consolidation (eC): Assisting SMEs to develop their e-commerce strategy, offering them advanced online and face-to-face training/coaching (for example, customer service, operations management, handling returns), assisting them in website development (or integrating specific virtual marketplaces) and advising them on payment solutions. In addition, this component is best implemented together with supporting SMEs to meet quality standards as well as packaging and labelling requirements.
    3. ecomConnect Durability (eD): To create a sustainable/durable environment, this phase includes: setting up e-fulfilment centres (ECSC) and crowd-logistics-based distribution systems and networks for consigning, packing and delivering SMEs goods (to reduce SMEs operations costs and guaranteeing a timely delivery); partnering with international e-fulfilment centres in target markets to minimize transportation costs and time; developing coaching capacities to assist local SMEs sustainably; and assisting Governments to develop a legal framework and tools that create a conducive environment for online SMEs, protect consumers' rights and fast track e-commerce adoption with digital IDs in line with the cashless society agenda of Governments.

    In addition, ITC offers a transversal ecomConnect Access (eA) package that includes:

    • The ecomConnect community engagement platform, a unique online platform to assist SMEs in DCs and LDCs by (i) sharing digital expertise between e-commerce businesses and experts; (ii) transferring new skills through tools, guidelines, success stories, webinars and Q&A sessions; (iii) problem solving through a network of experts and peers.
    • Online learning. An introductory online curriculum covering Introduction to e-commerce, Integrating virtual marketplaces, B2B e-commerce, Product digitization, to provide in-depth knowledge and awareness about e-commerce.

    Digital tools including:E-Commerce Readiness Quiz   to assess the maturity for e-commerce and understand their potential and needs to sell online; the E-Commerce Cost Calculator to evaluate fees and costs of selling online; and the Africa Marketplace Explorer to identify suitable business-to-consumer (B2C) marketplaces in Africa on which SMEs can sell their products and services.

    Export packaging and labelling

    Poor-quality packaging and labelling are among the main reasons that products fail to compete favourably in the global market. Improving packaging helps better protect products, improve customer perception, strengthen brands, improve company competitiveness, increase market shares and enter new markets.

    ITC assists managers in understanding the different functions of packaging so that they can deliver products in perfect condition and at the right price and location, as well as the critical role of packaging as a marketing tool to differentiate products to attract customers. Intervention areas include:

    • waste reduction
    • packaging for e-commerce
    • sector-specific packaging clinics
    • strengthening packaging testing laboratories and packaging institutes

    Export finance and investment

    ITC's Access to Finance programme aims to help aspiring entrepreneurs and enterprises with socially, environmentally, and economically sustainable projects to start up and scale up through entrepreneurial and managerial support and targeted financing solutions.

    ITC trains and works with locally-based financial management counsellors to improve the financial and business management skills of MSMEs so they can prepare bankable proposals. These counsellors also work with banks to better understand their MSME clients and adapt financial products, services, and risk-mitigating schemes such as guarantees for their needs.

    Given the difficulties that MSMEs have in accessing finance with traditional channels (namely banks), ITC also works with angel investors, angel funds, venture capitalists, investment funds, and other local partners to set up angel investors networks. Alongside technical assistance support, ITC helps to structure co-investment facilities that can match each angel's financial contribution to start-ups to de-risk and incentivize local investment.

     

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