Chamaiporn Visedmongkol Advisor to SMEs Office of Small and Medium Enterprise Promotion (OSMEP)

1. “Role of Business Development Service of Office of Small and Medium Enterprise Promotion and Venture Capital for SMEs” Chamaiporn Visedmongkol Advisor to SMEs Office of Small and Medium Enterprise Promotion (OSMEP)

2. What is Business Development Service (BDS) • Business Development Services (BDS) are services that improvethe performanceof the enterprise, its access to markets, and its ability to compete. • Scope of BDSinclude training, consultancy and advisory services, marketing assistance, information technology development and transfer, and business linkage promotion. Committee of Donor Agencies for Small Enterprise Development : World Bank Group

3. Why Business Development Service (BDS) for SMEs • SMEs play an important role in : - Poverty reduction and economic growth by generating employment and incomes - Empowerment of low-income workers - Development of entrepreneurship & skills • BDScan raise SMEs productivity by addrsssing key constraints : - Low skill levels - Weak management, financial accounts, marketing - Low level of technology - Weak linkages and support systems

4. Thai SMEsProfile (2008f) 6,025,648.9 2,372,781 12,184,290 9,122,688 Total Employment Export (baht) GDP (บาท) No. of Enterprises 4,206,760 (61.2%) 13,477 (0.6%) 4,283,797.6 (71.1%) 2,843,795 (24.0%) 2,359,304 (99.4%) 9,162,632 (76.0%) 3,536,947 (38.8%) 1,741,851.3 (28.9%) Notes: There were 0.3% of the enterprises whose information on size was unavailable. GDPof agricultural sector was not included. There were 2.2% of the export transactions whose information on the exporters’ size was unavailable. Refer to 1 USD ͌ 35 Baht 4

5. WEAKNESSES STRENGTHES • Losing competitiveness in labour - intensive & resource-based sectors • Weak production structure; Poor management; Incapable in marketing; Lack of product development; Employing low quality workforces; Using out of date technology’ • Limitation in applying good governance: accounting system; consumer & environmental responsibility • High flexibility and adaptability • High utilization of local/ domestic resources & knowledge • Well performed in skill-based, craftsmanship and hospitality sectors : food; handicrafts; fashion products; tourism and related products & services • Easy business access and quick consumer approach OPPORTUNITIES THREATS • Trends of new business approaches favor SMEs • Allow for business alliance with LEs and MNCs • Potential for the creation of new genre of entrepreneurs • SMEs promotion is national agenda with high level of significant • Pressure from Globalization: • - Economic integration between countries • - FTA on Goods/Services/ Investment • - New form of NTBs • - Entering of emerging economies in world market system • High competition results in Nutcracker situation • Obstacles from public administration 5 4

6. Main Agencies to SMEs Promotion Main Agencies to SME Promotion SME BANK SICGC • To create SME Promotion Strategies • To create target sector& definition for SME • To Cooperate with other concerned agencies • SME Information Center& enabling factorsupports Policy OSMEP Regional SPECIALIZED INSTITUE DIP Imply MOTS • To promote industries & entrepreneur • To develop technology & employees MOF MOAC MOL ISMED FTPI MOC MOST MOC MOI MOPH •Training & develop labor force Support BOI OSMEP SME BANK ONE-ASSET TISI ISO •VC • Standard to SME& International Standard • To create investment Policy for SME • Benefit forSME • Support credit to SME • Credit Guarantee FTI , TCC SMEs Entrepreneur Association IEAT OPDC DIW • To develop resources to SME •To establish Industrial Estate Authority for SME • To support & promote environment& community • Private sector to promote SME

7. OSMEP Mission Mandated By SMEs Act B.E. 2543 1. Act as the mechanism of the SMEs Promotion Board to coordinate relevant agencies in public and private sectors and SMEs entrepreneurs to contribute in the harmonized direction 2. Analyze and formulate SMEs promotion criteria as well as recommend policies and plan of SMEs promotion 3. Coordinate and formulate the operational plan for SMEs promotions 4. Coordinate, encourage, monitor and evaluate the work of relevant agencies in public and private sectors 5. Study and prepare reports on SMEs situation

8. OSMEP Mission Mandated By SMEs Act B.E.2543 • Recommend the amendment of laws and regulations obstructing • the promotion and development of SMEs • Administer the SMEs promotion fund • Reinforce, expand and cooperate in international issues and act as • the representative of Thai SMEs on global arena • Recommend measures on monetary, finance, tax issues so as to • support all SMEs relevant parties

9. Vision “To be the country’s central organization in formulating SMEs promotional policies and strategies as well as coordinating governmental and private working systems in achieving the strong and sustainable growth of SMEs as the main driving force of the country’s economy”

10. Role and Responsibilities of OSMEP The Board of SMEs Promotion Rights& Regulations The Executive Board Master plan Action plan Action body -MOI -MOC -MOAC -MOST ETC. OSMEP SMEs Incubation Project Mentor, ConsultantProjects Venture Capital Fund

11. Action Plan • Coordination • MOU • SMEs Data • Action Plan • Registration • Service Provision • Service Provider Creation Network to Promote SMEs International Governmental & Private Units • Board of SMEs Promotion • Executive Board of the Office of SMEs Promotion Regional Central Governor Ministry • Sectoral Strategies Local Ministerial Office State Enterprise Other Public Sector Agencies OSMEP • Formulate Master & Action Plan • Create Mechanism in implementing • Allocate Budget • Monitor and Evaluate Academics • Policy / Action Plan Local Admin. Agency Public Org. Academic/ Expertise Institution Provincial Industrial Federation • Projects under SMEs Promotion Action Plan Chamber of Comm./Fed Of Thai Industries/ Bankers’ Assoc. • SMEs University • Community/ Local Product Provincial Chamber of Comm. OSMEP Regional offices - Implement • Report Operational Result • Identify Problem/Demand - Implement • Report Operational Result • Identify Problem/Demand

12. Implementation Tools SME University / e-SMEs University Monitoring System Incubation Center Advisory Services SME Growth Stage Later Stages Strengthen SME Early Stage Technology Development (Competitiveness) Product & Service Development Export Market Development Business Development Expansion Venture Capital Fund Intellectual Property, Internationalization F. Consultancy Fund Seed Fund Machine Fund Financial Support

13. What is Business Development Service (BDS) • Business Development Services (BDS) are services that improvethe performanceof the enterprise, its access to markets, and its ability to compete. • Scope of BDSinclude training, consultancy and advisory services, marketing assistance, information technology development and transfer, and business linkage promotion. Committee of Donor Agencies for Small Enterprise Development : World Bank Group

14. Training • SMEs University • E-SMEs University • Incubation

15. SMEs University

16. Objective: • Helping the SMEs entrepreneurs to establish themselves and grow with sustainability • Upgrading their knowledge so as to be capable of managing business with efficiency and to be eligible for accessing wide range of support

17. Mission : • Producing of SMEs University Curriculum : the pilot project for entrepreneurs to run their businesses with sustainability • Development of Service Providers : train-the –trainer programme - Level of providing general information - Level of general training/basic consulting service - Level of advances workshop - Level of in-depth consulting service with specific focus for each industry/cluster

18. Concerned Agencies : • Educational institutes : Bangkok University, Rajamagala University of Technology located in Bangkok and rural area, Prince of Songkla University, Thammasat University, Assumption University, etc. • Other organizations : Institute for Small and Medium Enterprises Development (ISMED), Department o Industrial Promotion, SMEs Bank, Office of Vocational Education Commission, Technology Promotion Association (Thailand-Japan)

19. e-SMEs University

20. Objective: • Developing the cooperation for creating good business knowledge for SMEs • Increasing the potential of entrepreneurs in various aspects through academic knowledge and learning from experiences • Enhancing the knowledge-based society • As sources of SMEs managerial knowledge

21. Concerned Agencies : Assumption University (ABAC) OSMEP • Academic responsibility • Develop curriculum and modules • Lecturing and knowledge transfer • Evaluate and provide certificate or declaration for achievement • Support Budget • Co-develop curriculum and modules • Provide the students

22. Curriculum and Modules : Business Potential Development Business Management 12 Modules : SME101 Start-up the Business SME102 Marketing Management for SMEs SME103 Financial Management for SMEs SME104 Accounting & Budgeting for SMEs SME105 Production & Service Management for SMEs SME106 Sustainable Business Development SME107 Analysis of Trend, Business Opportunity, Business Strategies for SMEs SME108 Innovative Creation for SMEs SME109 ICT & E-commerce for SMEs SME110 SMEs & Marketing in Depth SME111 Risk Management & Internal Audit for SMEs SME112 Business Plan for SMEs 6 Modules : SME201 Role & Responsibilities of OSMEP SME202 Branding SME203 Knowledge Management SME204 Cost Management SME205 Export & Import SME206 Supply Chain & Logistics

23. Achievement : • Number of Student (Jan 08-May 09) = 23,690 • Number of accomplishment = 596 (2.5%) • 62.2% are men with high educated • Mostly (>90%) are small size which less than 5 years of establisment • 50% are in Bangkok and metropolitan area

24. Incubation

25. Productivity & Competitiveness Tool♦ Incubation Program ➱ Help SME Grow with Sustainability on Knowledge-and-Skill Base Help SME Successfully Access Financial Institution Support on Marketing Provide SME with Facilities at Affordable Cost ➱ ➱ ➱

26. Productivity & Competitiveness Tool♦ Incubation Program ➱ Give Consultancy Service to SME Visit SME at Their Sites Once a Month Monitor Operation of SME Help SME in Dealing with Relevant Agencies ➱ ➱ ➱

27. CORE ORGANIZATIONS IN BUSINESS INCUBATIONAREA • OSMEP • Office of SMEs Promotion, Ministry • of Industry • CHE • Commission of Higher Education , • Ministry of Education • NASTDA • National Science and Technology • Development Agency, • Ministry of Science and Technology

28. Business Incubators in Thailand BY OSMEP BY NSTDA BY CHE

29. Type of Business Incubator Incubation Business Incubator Technology Business Incubator • Emphasis on • Business • development on • Innovation process • and Ideas/design • Emphasis on • Business • development on • Technology • Innovation Manufacturing sector Bio-Tech, Nano-Tech Service sector Trade sector

30. Business Training and Coaching

31. Industrial Trainingand Coaching

32. The OSMEP as the central planning office in developing INCUBATION in Thailand ROLES OF OSMEP The Study of incubation system suitable for the Nation The support of establishing incubators 1. Setting up qualifications 2. Announcing for candidates 3. Recruiting potential incubators 4. Co—conceptualizing of operation 5. Funding 6. Monitoring & evaluation 1. Establishing the pilot incubators (2001 – Kasetsart University 2003 - Chulalongkorn University/King Mongkut’s University of Technology Thonburi) 2. Creating the study of master plan for developing business incubation system (Chulalongkorn University)

33. Incubatee Admission Criteria Business sense and Entrepreneurship Corresponding With OSMEP’s Strategic Industry Practical Business Plan Personal & Self support Financial Opportunity of Commercialized Market

34. Incubation Process Business Mgt. Training Execute Initial Business act Start-up Company Interview SWOT & Needs Assess Business Plan Development

35. SWOT & Needs Assess Business Plan Development Business Mgt. Training Execute Initial Business act Start-up Company Interview • Objective • To select suitable incubatees who match with incubator’s mission • Input • Candidated incubatees with initial business plan • Process • Interview • Evaluate Business sense and Entrepreneurship • Marketing potential of products or services • Organization and financial readiness • Output • Accepted incubatees

36. Interview Business Plan Development Business Mgt. Training Execute Initial Business act Start-up Company SWOT & Need Assessment • Objective • To prepare and evaluate the SWOT of each incubatee and assess the business development needed. • Input • Initial business plan, Status of each incubatee • Process • Prepare SWOT analysis • Evaluate the business development needed • Output • Incubation plan of each incubatee • Assign mentor to each incubatee

37. Interview SWOT & Need Assessment Business Mgt. Training Execute Initial Business act Start-up Company Business Plan Development • Objective • To refine incubatee’s business plan after training and having business plan discussion with advisors, mentors. • Input • Initial business plan and revised business objective • Process (Incubatee/Mentor/Advisor) • Business development plan • SWOT analysis after receiving initial incubation • Output • Refined Business plan • SWOT analysis

38. Interview SWOT & Need Assessment Business Plan Development Execute Initial Business act Start-up Company Business Mgt. Training • Objective • To provide training on business management principles that essential to incabatee’s needs • Input • Incubation plan of each incubatee • Process • Matching training courses, instructors, coaches for each incubatee’s development plan • Output • Progress report and test of the knowledge of each incubatee

39. Interview SWOT & Need Assessment Business Plan Development Business Mgt. Training Start-up Company Execute Initial Business act. • Objective • Start testing the business plan by executing all necessary business activities • Input • Refined Business plan • Process (Incubatee/Mentor/Advisor) • Execute Business activities with real transaction • Output • Evaluation report from the business results

40. Interview SWOT & Need Assessment Business Plan Development Business Mgt. Training Execute Initial Business act Start-up Company • Objective • To prepare all the necessary step to start up the company • Input • Refined Business plan • Process (Incubatee/Mentor/Advisor) • Organize the staff, funding, establish network, start up the company • Output • Company registration

41. Funding Structure • 60 % by OSMEP (e.g. fee of mentors, advisors) 30% by Incubator (In-kind, In-cash) • 10% by Incubatee

42. Monitoring & Evaluation Reports Incubation Centers OSMEP • Quarterly progressive report • Quarterly report for budget subsidy • Incubation Plan • Personal incubation report • Recruitment form • Consulting service report & evaluation form • Training course evaluation form • Satisfaction evaluation form • Performance evaluation report form

43. Key Performance Indicators • Number of attended entrepreneurs must not be less than 10 and 80% or more must be satisfied with the incubation • 80% or more of the completed ones must be able to establish business (register with MOC) within 3 years • Number of employment must be not less than 2 employees per the completed one • Significant better business performance and continuing on their businesses within 5 years

44. Output of OSMEP Incubation Program

45. Number of the Completed SME from Incubation Center (by Type of Industry)

46. Outcomes of OSMEP Incubation Program Registration with the Ministry of Commerce : Employment :

47. Advisory Services • Thai Business Consultant System Development for SMEs • Full-Circle Consulting Service

48. Thai Business Consultant System Development for SMEs • Objectives : • Thailand will have a brain bank of Thai consultants who are knowledgeable, proficient, and have professional ethics with the quality acceptable among the public and private entities, and SMEs entrepreneurs. • There will be a consultant supervising system and a high standard database of consultant directory that could be responsive to the needs of SMEs

49. Mechanism Responsibilities The Executive Board • Identify the policies and measures • Identify the rules, qualifications, criteria, selecting, certifying Thai Business Consultant Development Center • Supervise the request for budget of Thai Business Consultant Development Center Appoint The Sub-committee Thai Business Consultant Development Center • Training, developing, supervising, and certifying the quality of consultant • Issuing the notifications, rules, regulations for registration, renewal, withdrawal of the registration of the consultant • Request for approval of budgetary allocation for Consultant center • Center of registration & Consultant center OSMEP The external evaluation unit • Evaluate the project performance

50. Full-Circle Consulting Services • Free of charge consultation and advising services for SMEs, students, and people who acquire the recommendation regarding the business • The topics are covered as how to start the businesses, finance, domestic and international marketing, franchise, business law, taxation, branding, design, etc. • There were about 5,000 persons acquiring the services a year with the satisfaction rate is about 95% • SMEs can access through many channels such as walk-in, booth exhibition, web board, speakers in seminar an workshop, Call Center (40,000 Calls a year)