Exploring the role of TPOs in a changing trade landscape
Trade promotion organizations (TPOs) often have an invisible role, working behind the scenes to help small and medium-sized enterprises to increase exports to global markets. The 10th TPO Network World Conference and Awards, held 3-5 November in Dubai, United Arab Emirates, gave TPOs the opportunity to take the spotlight.
This year’s theme, ‘From export promotion to internationalization: The role of TPOs in the evolving global economy,’ is a reflection of the quickly changing trade landscape. It is being shaped by technological innovations and trade policies that offer businesses new opportunities to connect to markets around the world.
Participants of the biennial event, hosted by Dubai Exports in partnership with the International Trade Centre (ITC), had a chance to share best practices during plenary and breakout sessions and to gain recognition for their trade and investment-promotion work.
Recognizing TPO efforts
On the evening of 4 November representatives of five organizations took home trophies during the 2014 TPO Network Awards, which recognize groups that put in place successful export-performance programmes.
Among the winners was Enterprise Mauritius, which won in the small island developing state category while the Zambia Development Agency took the prize for best TPO from a least developed country. Proexport Colombia was recognized as the best TPO from a developing country.
In the developed country category, Enterprise Lithuania and Spain Export and Development won special mentions for their efforts to promote youth employment and skills development.
Strengthening the work of TPOs
More than 400 representatives of governments, trade support institutions and national TPOs explored ways to expand TPOs’ client base, improve their operations and reach new markets over the three days of the conference.
Discussions focused on the increasingly important link between trade and investment promotion; trade facilitation. They also explored services; market diversification; women’s economic empowerment; branding; and innovation in information communications technology for TPOs.
The 11th TPO Network World Conference and Awards will take place in Marrakesh, Morocco, in 2016, hosted by Maroc Exports in partnership with ITC.
Best TPO from a Least Developed Country – Zambia Development Agency
ITC Executive Director Arancha González discusses with H.E Sultan bin Saeed Al Mansouri, Minister of the Economy for the United Arab Emirates.
Limited access to finance is a major obstacle for small and medium-sized enterprises (SMEs) looking to export – and it is an issue that has been tackled by the Zambia Development Agency.
The organization helps businesses secure pre- and post-shipment export finance through its Zambia Export Development Fund. The fund provides low-interest loans to producer associations in non-traditional export sectors, including leather, coffee, timber, organic products, gemstones and crocodile products. The producer associations monitor their members and are responsible for repaying the loans.
The Zambia Development Agency was recognized as the winner of 2014 TPO Network Award – Excellence in Export Development Initiatives – in the least developed country category for implementing this initiative.
Since 2011, the Zambia Export Development Fund has issued loans valued at more than US$ 1.5 million to six exporting associations. The fund has enabled enterprises to enter new export markets in the region and beyond, creating job opportunities and generating income.
The fund helps SMEs become sustainable exporters. It enables them to add value to primary exports to increase their earnings. It stimulates investment in export sectors in which Zambia has comparative advantages.
SMEs can receive short-term loans for pre-shipment costs of procuring raw materials and equipment and for post-shipment costs of salaries and other operating expenses. Medium-term loans are available for production and seasonal imports.
As a result of the Zambia Development Agency’s Train for Trade programme, launched 12 years ago, more than 100
participants have learned to better uti-
lize export opportunities. Companies show-
casing their goods and services at the
Southern African International Trade Exhibition generated more than US$ 1.4 million of
Best TPO from a Small Island Developing State – Enterprise Mauritius
Dev Chamroo. CEO of Enterprise Mauritius (left), with ITC’s Arancha González and Saed Al Awadi, CEO, Dubai Exports.
As a three-time award winner of the TPO Network Awards, Enterprise Mauritius knows what it takes to prepare small and medium-sized enterprises (SMEs) to export to global markets.
‘We start preparing an innovative project every year,’ said Chief Executive Officer Dev Chamroo. ‘We’ve been working on this project for the last two years.’
Enterprise Mauritius was recognized as the winner of 2014 TPO Network Award – Excellence in Export Development Initiatives – in the small island developing states category for its ‘Go-Export’ project. The interactive training platform for SMEs combines classroom workshops, group meetings, role playing, test applications, factory visits and one-to-one sessions with mentors. The project is funded by the Mauritian government.
Twenty SMEs showing the greatest export potential were selected to participate in the project to address their trade-related weaknesses. These included a limited understanding of the complexities of international trade, an inability to fully meet buyers’ demands and difficulties adapting products to target markets.
The project helped managers respond more effectively to market demands by producing higher-quality goods, improved packaging and more variety. Through the process, Enterprise Mauritius also built its capacity to conduct similar training programmes.
The ultimate goal is to expand Mauritius’s market share in Africa and to increase the number of Mauritian exporters, providing them with the skills required to become sustainable exporters.
TARGETING NEW MARKETS
‘As a TPO there are many challenges,’ Chamroo said. ‘The number one challenge is as you get money from the government, they want return on investment. You always have to deliver. You have to be constantly aware of what’s happening to your client and be there when the market changes.’
A World Bank study shows that every dollar spent on export promotion results on average in a US$ 40 increase in exports. Chamroo says this is the expectation that governments have when providing funding to TPOs.
The Go-Export project resulted in five SMEs shipping exports valued at about US$ 400,000 in 2013. Eight companies are finalizing export orders of about US$ 165,000. Two companies have made significant investments in new technology and are now ready to export.
Looking ahead, Chamroo said the best way for a TPO to improve its services to SMEs is to share best practices and lessons learned to help them become globally competitive exporters.
‘Among TPOs, we learn from each other,’ he said. ‘There is nothing like innovation coming in. You learn and we copy shamelessly. I learn from my experience, I learn from others
Best TPO from a Developing Country – Proexport Colombia
Taking the prize in the developing country category at this year’s TPO Network Awards was Proexport Colombia for its Selling Methodology 2.0 (PSM 2.0), which aims to increase textile and apparel exports to the United States of America. PSM 2.0 is based on business intelligence processes and value-added strategies to maximize the sustainable competitive advantages Colombian companies enjoy.
The programme provides entrepreneurs with specialized market intelligence through seminars, publications and online content. It helps to identify suppliers in the textile and apparel industry through meetings and counselling conducted by Proexport’s information centres. In turn, Colombian companies interested in entering export markets, particularly the United States, participate in exploratory missions to learn about market requirements and evaluate their supply capabilities.
‘An innovative project was presented, linking the demand to the offer. We then made a gap analysis between what the customers want and what Colombian producers can export from the textile industry,’ Mr Wago said.
After identifying export-ready companies, individual needs, market opportunities, and product-market validations, PSM 2.0 focuses on adapting supply to address identified production gaps. The Exportable Textile and Apparel to the United States Adequacy Program is thereafter combined with development of commercial action plans.
‘Among our biggest challenges is to work with a large group of micro, small and medium-sized enterprises (MSMEs) and small and medium-sized enterprises (SMEs). The objective is to try to put them into a programme to start to close the gaps. We want to enable them to be competitive in the United States market, to export for the very first time, and to continue growing exports to other markets by taking advantage of the programme,’ Mr. Wago added.
PSM 2.0 generates value-added information that enables Colombian entrepreneurs to present competitive proposals and achieve profitable exports. Significant results have been achieved so far. Between 2012 and the first quarter of 2014, five exploratory missions were conducted with 95 companies. In that same period, 37 companies reported 74 United States export business opportunities and 18 concluded deals with North American clients.
PSM 2.0 has allowed the participating companies to significantly close production gaps, allowing them to securely, successfully and sustainably enter export markets.
Special Mentions for Developed Countries TPOs
In the Developed Country category, the panel of judges accorded Special Mention Awards to two trade promotion organizations (TPOs), Enterprise Lithuania and ICEX Spain, Export and Investment for their efforts to promote youth employment and skills development by placing young workers with internationally oriented companies.
Enterprise Lithuania was recognized for its Wings project, which is addressing Lithuania’s demand for adequately trained professional export managers. The programme matches talented young people with experienced private-sector export project managers. It provides them with training to address high youth unemployment and bridge the skills gap.
‘The project we proposed is interesting on a global scale. Youth emigration is a serious and important issue and preparation of professional export leaders is the second reason why we think we won this prize,’ said Simona Gailiunaite, the head of human resources at Enterprise Lithuania.
The Wings programme, focused on the less populous regions of the country, covered 60% of the young leaders’ salaries and provided necessary tools including computers, telephones, seminars and training courses.
‘The main challenges were to integrate young people into SMEs and to prepare professional export leaders. I think that the key thing to be recognized is to work closely with the businesses and to listen to their needs and then help them to expand the business,’ Ms. Gailiunaite said.
The initiative ran from July 2013 through June 2014 and targeted Lithuanian small and medium-sized enterprises (SMEs), involving 48 companies and 16 talented participants. Enterprise Lithuania plans to expand the programme to 50 young participants.
LINKING GRADUATES TO JOBS
ICEX Spain was recognized for its Young Professional Program (YPP), which since 1974 has enabled more than 5,500 graduates to take up work in Spanish companies that are growing internationally.
Every year, around 1,800 candidates apply for one of the 200 available positions in the YPP. The programme is popular with employers, too: in 2014, more than 700 companies applied to the programme to gain one of the 181 trainees.
‘This programme has had a great impact on Spanish companies in recent years in terms of the efforts we have put into it, the large number of young professionals we have been able to help and the contribution to Spanish exports. This is the value-added that the programme can offer,’ said Francisco J. Garzón, ICEX’s Managing Director said.
The YPP gives participants one year of training in the network of Trade Commission Offices in Spanish embassies as well as training in international Spanish companies or multilateral organizations. ICEX covers between 50% and 100% of the costs and the scholarship lasts for four years. The programme culminates with a Master’s course in International Business Management with qualifications from the Menéndez Pelayo International University in Santander,
‘SMEs often have a tough time organizing themselves to start exporting without the help of these young professionals. SMEs that didn’t even have the intention or the opportunity to tackle foreign markets are now given that opportunity,’ Mr. Garzón said.
‘One of the biggest challenges is to convince companies that the market is global. If you think that the world is your market and you think that your consumers can be the entire population of the world, then the opportunities are far larger.’