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March 2011

Department of Economic Development, Trade and Tourism Executive Secretariat for Integral Development. PROGRAMS AND BSOs TO SUPPORT MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES (MSMES) IN LATIN AMERICA. March 2011. MSMEs.

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March 2011

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  1. Department of Economic Development, Trade and TourismExecutive Secretariat for Integral Development PROGRAMS AND BSOs TO SUPPORT MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES (MSMES) IN LATIN AMERICA March 2011

  2. MSMEs • At the GS/OAS we focus on micro, small and medium-sized enterprises (MSMEs), given their role and contribution in fostering job creation, poverty reduction and prosperity with social inclusion • There are an estimated 120 million MSMEs in the hemisphere • 90 % of all registered businesses • Average lifespan of 14 months • Limited use of new technologies and quality systems as well as low levels of innovation • Account for < 5 % of total exports of goods and services • 1 in 3 has the capacity to engage in international trade • Generating 2/3 of jobs • > 1/3 of MSMEs are headed by women • About 25 percent are created by entrepreneurs under 35 years of age

  3. MSMEs OBJECTIVE The GS/OAS promotes the productivity and competitiveness of MSMEs and their participation in international trade opportunities The GS/OAS promotes the economic inclusion of MSMEs led by women, youth and vulnerable groups • Dialogue of High-Level Authorities Responsible for Trade and MSMEs • Support to the “Internationalization” of MSMEs • Capacity Building for the Negotiation and Implementation of Trade Agreements

  4. MSMEs Support to the “Internationalization” of MSMEs This includes projects and activities promoting the participation of MSMEs in international markets through: The use of ICT and the Internet Strengthening the participation of MSMEs in value chains and associations Mentoring programs facilitating knowledge transfers Export strategies based on intellectual property tools

  5. Programs to Promote MSME Internationalization in Latin America

  6. PROGRAMS TO PROMOTE THE INTERNATIONALIZATION OF MSMES IN LATIN AMERICA BRAZIL: Program for the Internationalization of SMEs Sebrae (The Brazilian Service of Support for Micro and Small Enterprises), through the Program for the Internationalization of Micro and Small Businesses, help SMEs increase their access and presence in external markets The abovementioned program (2008) prepares entrepreneurs to compete in Brazil and abroad and has the support of Sebrae and its partners - the Apex (the Export Support Agency), the Bank of Brazil, the MDIC (Ministry of Development, Industry and Foreign Trade), the CNI (National Confederation of Industry), ABDI (Brazilian Agency for Industrial Development) and ITC (International Trade Centre, Geneva). Objective: increase of 10% in the number of SMEs exporting to other countries

  7. PROGRAMS TO PROMOTE THE INTERNATIONALIZATION OF MSMES IN LATIN AMERICA CHILE • ProChile, the Trade Commission of Chile, is part of the General Directorate of International Economic Affairs of Chile’s Ministry of Foreign Affairs. It is responsible for implementing and enhancing Chile’s trade policy • ProChile’s mission is to provide support to SMEs, and help diversify exports of Chilean products and services by increasing the number of export markets and companies ready to export. • ProChile’s Trade Offices and Agencies are located in over 35 countries, covering 90 percent of the destination markets for Chilean exports. For more information please visit www.chileinfo.com

  8. PROGRAMS TO PROMOTE THE INTERNATIONALIZATION OF MSMES IN LATIN AMERICA CHILE • Coaching Exportador Program- ProChile • A program that incorporates collaborative coaching methodology to stimulate the cooperation, transfer of knowledge and experience between large and/or successful companies and small exporters (MSMEs) • Target: The owners or managers of SMEs with export potential, located in the region of Coquimbo, Maule, Los Lagos and the Metropolitan zone of Santiago

  9. PROGRAMS TO PROMOTE THE INTERNATIONALIZATION OF MSMES IN LATIN AMERICA CHILE Pymexporta- Program- ProChile Program established in 2005 by ProChile and the Chamber of Commerce of Santiago, with the support of the MIF/IDB The objective of the program is to help MSMEs increase their exports by providing tailor-made services to a group of companies with real possibilities of becoming successful exporters, but without the resources to develop business opportunities in foreign markets SMEXs (SMEs that export) receive specialized technical assistance and training to deal with non-tariff barriers, adjust their exportable supply, and develop successful logistics, distribution and marketing strategies. They also go through an Export Capacity Test

  10. PROGRAMS TO PROMOTE THE INTERNATIONALIZATION OF MSMES IN LATIN AMERICA CHILE Exploration and Research of Foreign Markets CORFO-Innova-ProChile Program that supports the development of projects and market research to enable Chilean exporters to position themselves in international markets through product differentiation The program assists these companies in their insertion in value chains and the identification of opportunities and requirements in terms of innovation as a result of the exploration of markets

  11. PROGRAMS TO PROMOTE THE INTERNATIONALIZATION OF MSMES IN LATIN AMERICA COLOMBIA Expopyme – Proexport • It is an export promotion program, which was created in 1999, and a component of Colombia’s Plan for the Development of Exports aimed at SMEs to support the placement of Colombian products in foreign markets. It provides assistance to would-be exporters from all economic sectors, especially handicraft producers. One of Expopyme's most challenging efforts has been to create a new, export-oriented mindset in national entrepreneurs, to facilitate their adaptation to an increasingly globalized economy and to new standards of competitive • Expopyme aims at assisting Colombian enterprises who wish to design and implement their export plan, as a manner of driving them to take a step toward the international scene. They do so, first, by identifying the enterprise's weak points and strong points and the goods that they want to sell abroad; to better define their target markets and strategies to meet internationalization goals

  12. PROGRAMS TO PROMOTE THE INTERNATIONALIZATION OF MSMES IN LATIN AMERICA COLOMBIA Expopyme – Proexport • The output of the first stage of the program is the formulation of an Export Potential Diagnosis (EPD) for the enterprise, based on a simple SWOT analysis. The second stage consists of a Market Intelligence (MI) exercise, to determine the most likely export markets. The third stage has to do specifically with the Export Plan Formulation (EPF) through which priorities are established regarding investment needs and a course of action for initiating the export activity. The activities developed during those three stages are funded by Proexport and the formal training course offered to entrepreneurs / managers is paid by the participants and by Proexport • The whole process is backed by consultants that assist the enterprises, to ensure the best possible results. The consultants are hired by and given support by coordinators designated by institutional Program Operators, with the consent of the enterprises, under a contract entered into directly by the coordinator and the firm.

  13. PROGRAMS TO PROMOTE THE INTERNATIONALIZATION OF MSMES IN LATIN AMERICA COLOMBIA Expopyme – Proexport • To participate in Expopyme, firms only need to complete an application form, go through a screening process before a regional Selection Committee, and allow program consultants to visit their premises. According to the figures given by the program itself • ... In 1999, SMEs who participated in Expopyme exported US$48,9 million; exports increased 37% by 2000. The trend has persisted. • EXPOPYME is backed by all of the national agencies related to foreign trade: the Ministry of Trade, Industry and Tourism; the national EPA (Proexport); the Colombian Association of SMEs (Acopi), the Export Bank (Bancoldex); some industry trade unions; several universities; and the Confederation of Chambers of Commerce (Confecámaras)

  14. PROGRAMS TO PROMOTE THE INTERNATIONALIZATION OF MSMES IN LATIN AMERICA COLOMBIA Expopyme – Proexport

  15. PROGRAMS TO PROMOTE THE INTERNATIONALIZATION OF MSMES IN LATIN AMERICA COSTA RICA • “CREATING EXPORTERS” PROGRAM–PROCOMER • Creating exporters (Creando Exportadores) is an 8-module (6 month) training program established in 2000 which has led to the internationalization of SMEs in Costa Rica. It is done in cooperation with the Chambers of Commerce • The program provides participants the necessary knowledge so that, at the end of training, they can prepare an export plan and receive support for identifying business opportunities in external markets • The training covers all export sectors, both traditional such as agriculture and food, as well as manufacturing and services sectors (audiovisual, software, architecture and engineering, and medical tourism) • This training has expanded its coverage to rural areas, with the “Creating Exporters of Organic Products Program”

  16. BSO: US-SMALL BUSINESS DEVELOPMENT CENTER MODEL (SBDC) • Provide a wide array of technical assistance/support to small business and aspiring entrepreneurs. This helps strengthen business performance and sustainability and leads to the creation of new business entities • These small businesses in turn foster local and regional economic development through job creation and retention as a result of the extensive one-on-one long term counseling, training and specialized services they receive from SBDC • Unique public-private-academia partnership

  17. BSO: US-SMALL BUSINESS DEVELOPMENT CENTER MODEL (SBDC) • Federal funding combined with state and private sector resources • Specialized Centers based on client needs assessments, business trends, and individual business requirements. SBDCs adapt their services to meet the evolving needs of the small business community in their community • Services provided by the SBDC: • Development of business plans • International trade assistance • Manufacturing assistance • Financial assessments • Marketing • Human Resources assistance

  18. SBDC NETWORK • U.S. Network with more than 1100 Centers across the U.S. • Members of the Association of SBDCs • Employs more than 4500 professionals who offer training to small businesses

  19. BSO:SBDC MODEL REPLICATED IN OTHER COUNTRIES MEXICO- Mexican Association of Small Business Development Centers Created a national network of Mexican SBDCs whose mission is to help entrepreneurs start businesses, create jobs and improve the competitiveness of the Mexican economy Creation of Bilateral Trade Opportunities –SBDCGlobal.com: a web-based platform that facilitates trade among the 750,000-plus clients of the U.S. and Mexican SBDC networks SBDC Model Integrity – assists the Mexican SBDCs in developing accreditation standards that certify centers and ensures quality of small business assistance services that create economic impact

  20. BSO:SBDC MODEL REPLICATED IN OTHER COUNTRIES MEXICO- Mexican Association of Small Business Development Centers Building Mexican SBDC Network Capacity – the Mexican Association of SBDCs now has a critical mass of 101 centers and trained over 1,000 future Mexican SBDC professionals. In 2009 the Mexican SBDC network assisted more than 32,000 small businesses and created and retained 12,000 jobs Ensuring a Sustainable Mexican SBDC Network - established the Mexican Association of SBDCs as the focal point for the promotion and establishment of a national SBDC network

  21. BSO:SBDC MODEL REPLICATED IN OTHER COUNTRIES EL SALVADOR- SMALL BUSINESS DEVELOPMENT CENTERS (CDMYPES) • Led by Vice Minister Mario Antonio Cerna: the Ministry of Economy of El Salvador participated in the 2009 ASBDC Annual Conference in Orlando (supported by OAS); • The Secretary of Economy, Dr. Hector Dada Hirezi invited the UTSA (University of Texas at San Antonio) SBDC program to El Salvador to present the SBDC model to key stakeholders including its small business organization CONAMYPE (National Commission for Micro and Small Businesses), universities, municipal governments and NGOs; • The UTSA SBDC team gave three days of presentations and work sessions to each stakeholder group with the goal of evaluating the feasibility of the SBDC model in El Salvador; • Of the 175 participants, 99% thought that the SBDC model would work in El Salvador; • April 2010: the Ministry of Economy (El Salvador) visited the UTSA SBDC program for an observational tour and traveled to Washington, DC for meetings with SBA, the House and Senate Small Business Committees, USAID and the OAS; • May 2010: CONAMYPE inaugurated the first Diplomado SBDC Counselor & Director Training Program for 172 future Salvadoran SBDC professionals. Training concluded in September 2010; • September 2010: the Ministry of Economy and CONAMYPE launched a five-center pilot CDMYPE (SBDC) network to help the MSME sector create jobs, increase competitiveness and link with U.S. small businesses for international trade opportunities via SBDCGlobal.com; • In January 2011, five additional CDMYPEs were launched

  22. BSO: SBDC MODEL REPLICATED IN OTHER COUNTRIES EXPANSION OF THE SBDC MODEL INTO COLOMBIA During the Spring 2009 and as part of an American Partners Fellowship, ICESI University and Universidad del Valle in Cali sent officials to Texas and Florida SBDCs for a three-month observational study tour to learn about the SBDC model and best practices December 2009: the Colombian Ministry of Commerce, Industry and Tourism created a pilot SBDC program with three universities in Cali and Bogota February 2010: the Colombian SBDCs purchased the Webcats SBDC client management database In April 2011, the Colombian SBDCs connected their centers and clients to SBDCGLOBAL.COM so that Colombian small businesses can participate in trade opportunities with the U.S. and Mexican SBDC clients

  23. SBDCGLOBAL.COM • Launched by the International Trade Center of the SBDC at the University of San Antonio, Texas in 2010 • The first-evertrade platform that links over 750,000 small business clients from the U.S., Mexico, El Salvador and Colombia SBDC networks for bilateral trade opportunities • SBDC clients are able to obtain information, find trade leads, and engage in international negotiations. With such connections, small business es will have access to more international trade opportunities and will be able to increase their global competitiveness, expand sales and create jobs WWW.SBDCGlobal.com

  24. SBDC GLOBAL.COM Import- Export Process MSME receives training on international trade Advisor - MSME SME SBDC i SME Evaluation Economic Impact Export / Import Access to SBDC.GLOBAL * Custom Agencies/ brokers * Logistics

  25. OAS Department of Economic Development, Trade and Tourism Tel: (202) 458-3600/3181 WWW.OAS.ORG/EN/SEDI/DEDTT • mrobert@oas.org

  26. DEPARTMENT’S WEBPAGE WWW.OAS.ORG/EN/SEDI/DEDTT

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