Participatory Appraisal of Competitive Advantage in Thailand

1. Participatory Appraisal of Competitive Advantage in Thailand Progress and Experiences by SSIPP Ricarda Meissner 29. November 2002

2. Our Initial Expectations towards PACA Improved policy dialog between public and private sector Shared vision and coordinated action among players in a locality Local players are enabled to design strategies for SME promotion and LED Stakeholdes become efficient actor in implementing SME promotion programmes Local players widen perspective and see SME promotion as part of a larger system (LED, global markets, etc..)

3. Sequence of PACA Activites in SSIPP • Start January 2002 with Training of 25 PACA Facilitators • Road Shows • Selection of Locations and Negotiations with local stakeholders • Completion of 4 full PACA projects and 2 sector-related ones • Lampang (Northern ceramic and furniture town) • Chiang Rai ( Golden Triangle trade and tourism town) • Chiang Mai (Garment, Crafts Locations, Temples??) • Suphanburi (Agriculture and Food Industry) • Development of Cluster and Value Chain projects as PACA follow-up

4. Results of first Evaluation of SSIPP‘s PACA ApproachPositive Experiences... • Joint diagnosis of local stakeholders creates shared vision, group dynamics and initiates many innovative activities • Perfect instrument to build strong, output oriented stakeholder groups • Concept of competitive advantage improves perception of positioning in international and local marktes of sub sectors • Effective joint action of sub sectors are initiated • Perfect tool to launch and initiate cluster promotions and promotion of value chain

5. Examples: • Lampang Ceramic Group jointly entered new markets in China and companies are selling now to Kunming • Lampang fundraised jointly for Cluster development program with IFCT • Lampang ceramic and tourism sector started cooperation and launched special award for hotel/ restaurants which use Lampang ceramics • Lampang started tourist project: Visit of Ceramic Factory • Chiang Rai tourism group organized itself and developed joint strategy • Garment Sector Chaing Mai started joint raw material sourcing • Furniture Group Chiang Mai started group for lobbying against regulations • Governor Chiang Rai promotes PACA reports as guideline for all local government departments

6. ....and Problems Faced • Concepts are complex and yet easily misunderstood • Approach requires excellent facilitation skills which local stakeholders and non- CEFE Trainers do not have • Implementation gets mixed up, deviated from standard recommendation and lacks depth and clarity • Some instruments to complicated for SSIPP Context, Sequence not clear, Diamond for LED diagnosis can be confusing • Stakeholders are sometimes too biased towards the competitive advantages of their locations-results are not necessarily correct • No clear guideline how to follow—up: Stakeholders are lost and start to initiate sometimes strange activities

7. SSIPP’s Solution • Investment into Simplicfications, Action Learning Elements, Group Plays, Examples, SLEs, PRA based Elements, etc. • Development of new tools to supplement the ‚missing links‘ (for example Benchmarking, Custer mapping) • Development of detailed set of standard procedures concerning sequence, contents, logistics, facilitation, etc. • Quality Maintenance system • System for HRD Development and Licencing System for Facilitators • Development of ‚Post PACA‘ projects, in particular Cluster and Value Chain Promotion) • ...and further development of PACA as a tool for Cluster promotion as per new Thai-German Cooperation Concepts

8. Status and Progess of PACA in SSIPP • PACA in Thailand will be more tool for sector and cluster promotion and for integration along value chains • Development of guidelines and quality system started and will be continued with a larger team in January 2003 • Cluster promotion started with Scottish Enterprise • Value Chain concepts in co-operation with the Supply Chain Center of the Federation of Thai Industries and ECR (Efficient Consumer Response Network Thailand)

9. Post PACA Concepts Cluster Promotion

10. Cluster Promotion as Standard Concept of PACA in SSIPP Process Diagram for the Scottish Tourism Cluster Organize Cluster Working Groups Working Group Meetings Initiative Team Initiative Team Initiative Team Initiative Team Initiative Team Initiative Team New Sector Strategy Cross-Cutting Initiative Teams Broad Vision, Strategy, Initiatives Key Themes New Business Propositions and Enabling Actions for Each Theme Working Group Co-Chairs Participants Action Group: Define Vision, Key Themes Working Group Co-Chairs Participants Mobilise Diagnose Collaborate Implement

11. Firm Strategy, Structure and Rivalry Factor Conditions Demand Conditions Related and Supporting Industries The “Cluster Diamond” Continued innovation Vigorous competition Creative environment High skill levels Continual upgrading Supporting institutions Demanding customers Customer/supplier relations Competitive advantage Close competition between firms to supply upstream industry Co-operative relationships Continual innovation

12. Firm Strategy, Structure and Rivalry Factor Conditions Demand Conditions Related and Supporting Industries Example: The “Cluster Diamond” - Ottawa 1000 local high-tech firms Strong base of indigenous firms Well developed networking Specific Education courses High quality of life draws in immigrants Strong research hub Technology demand Local demand allows comp advantage to be sustained Venture capital available at all stages Networks of “business angels” Specialist legal,tax and IP advice

13. Generic cluster map Upgrading & innovative institutions sophisticated Core of cluster Related and Supporting Industries MARKETS less-sophisticated DIRECT FINAL Infrastructure & infraservices

14. OIL AND GASCLUSTER Expert Specialised FUNDING Sources UNIVERSITIES Health & Safety Authorities Upgrading & innovative institutions Government & Licensing Authorities Information Brokers Training Bodies Strategy & interface services Targeted Industry Initiatives/ Networks Incubator facilities Pharms TECHNOLOGY INSTITUTES Business services Chems Management Knowledge & Information Petro chemicals Plastics Consumables Operations and Production Basic Petro- chemicals Motor & Aviation Exploration Operating services Cracking & Refining Development activities Heating & Aircon O&G Transport & Logistics Gas Distribution Development Process Direct support services Electricity Conversion CLUSTER CORE simplified version Indirect support services Spot markets Related and Supporting Industries simplified version Harbours, Airports Yards Oil & Gas Pipelines Industrial estates & other designated & serviced land Human Resource Agencies Comms & Power Networks Social o/head - houses, schools &c MARKETS POWER HEAT MOBILITY MATERIALS(HEALTH & SHELTER) INFRASTRUCTURE & INFRASERVICES

15. Example: BENCHMARKING FOR SCOTLAND’S TOURISM CLUSTER Which? Costa Rica Germany Ireland New York Why? High level government support; add value through education; eco-tourism Leading destination; public sector-led; links across cluster (e.g. Visa); theme years branding; “emotional” tourism infrastructure (crime/entertainment); regeneration; branding; cluster was not the driver

16. Post PACA Concepts Promotion of Value Chain Efficiency

17. The Improved Supply Chain – Efficient Consumer Response Through Co-ordinated Action Lower Transaction Costs Deregulation EDI Platforms Benchmarking Quality Management Technology Transfer Testing and Calibration Services Compliance with Standards Linkages and Partnerships Cluster Development Efficient Communication Bar Coding Efficient Consumer Response Coordination of Farmers Pesticide Management Traceability GTZ, DSE, CDG, CIM, DEG, KfW, PTB, SES, Logistics Management Standard Communication Systems Flexible Financial Products PPP Transaction Management From Typical Supply Chain…………… to Improved Supply Chain

18. Thank you for your Attention!