ART INITIATIVE

COMPETITIVE ECONOMIC DEVELOPMENT

FOR CREATING SUSAINABLE JOBS AND INCOMES

IN SOUTHERN PROVINCE

OF SRI LANKA

Giancarlo Canzanelli

ART ILSLEDA

Galle , 12-13 November 2006

OBJECTIVES

IN THE FRAMEWORK OF THE ART GOLD SRI-LANKA PROGRAM

ITS ECONOMIC DEVELOPMENT COMPONENT IS

AIMED AT CREATING

SUSTAINABLE JOBS AND INCOMES

FOR THE POPULATION OF THE SOUTHERN PROVINCE

HOW TO PROVIDE SUSTAINABLE JOBS AND

INCOMES ?

In the public sector

or

In the private sector

WHAT THE CONDITIONS FOR SUSTAINABLE JOBS AND

INCOMES IN THE PRIVATE SECTOR ?

1. THE ENTERPRISE SHALL SELL ITS PRODUCTS IN THE MARKET

2. IT MEANS CONSUMERS OR CLIENTS WILL PREFER ITS PRODUCTS OR SERVICES TO OTHER ONES OF A COMPETITOR BUSINESS

THE ENTERPRISE IS COMPETITIVE

EXAMPLE N° 1

WHAT DO YOU LOOK AT

FOR CHOOSING AND BUYING

A PAIR OF SHOES ?

EXAMPLE N° 1

• Quality• Design• Price• Colour• Brand• Durability• Size• Weight

WHAT DO YOU LOOK AT

FOR CHOOSING AND BUYING

A PAIR OF SHOES ?

EXAMPLE N° 2

• …………………………..• …………………………..• …………………………….• …………………………….

WHAT DO YOU LOOK AT

FOR CHOOSING AND BUYING

A BOTTLE OF WINE ?

THE COMPETITIVE FACTORS

• Brand

FACTORS THAT OTHER ENTERPRISE CAN EASILY ACHIEVE

FACTORS THAT OTHER ENTERPRISE CANNOT EASILY

ACHIEVE

THE COMPETITIVE FACTORS EXAMPLE FOR THE SOUTHERN PROVINCE /

SHEET 1

LET’S CHOOSE A LOCAL RESOURCE: ___________________________

WHAT YOU LOOK AT

IN THIS RESOURCE

FOR CONSIDERING IT

ATTRACTIVE ?

• Tea• Cinnamon• Tourism• Art&Crafts• Curd

EXAMPLE FOR THE SOUTHERN PROVINCE /

SHEET 2

WHAT ARE THE

LOCAL ELEMENTS

THAT PROVIDE

THE

ATTRACTIVENESS ?

COMPETITIVENESS

PLACE AND TIME

WHAT MARKETS DOU YOU WANT TO BE COMPETITIVE

IN ?

MUNICIPAL

DISTRICT

PROVINCIAL

NATIONAL

ASIAN

EUROPEAN

WORLD

FOR HOW LONG DO YOU WANT TO BE COMPETITIVE ?

THIS YEAR

THE NEXT 5 YEARS

THE NEXT 10 YEARS

FOR MORE THAN 10 YEARS

HOW TO MAINTAIN COMPETITIVENESS IN THE

LONG TERM

BEARING IN MIND:

• CONSUMERS’ DEMAND CAN CHANGE

• NEW ENTERPRISES CAN IMITATE YOUR PRODUCT OR MAKE IT BETTER

• TECHNOLOGY CAN CHANGE AND YOU ARE NOT PREPARED

THE ENTERPRISE SHALL BE PREPAREDTO INNOVATE

WHAT INNOVATION MEANS ?

IT MEANS IMPROVING PERFORMANCES

PRODUCT ITSELF

• QUALITY

• ATTRACTIVENESS

• DESIGN

• PERFORMANCE

TECHNOLOGY

• PRODUCTIVITY

• PERFORMACE

PRE AND POST SALE SERVICES

• INFORMATION

• ADVERTISING

• PACKAGING

• FIDELISATION

ORGANISATION

• DISTRIBUTION

• FRANCHISING

• FOREIGN PARTNERSHIPS

• LOCAL NETWORKS

• TERRITORIAL BRANDS

CHANGE PRODUCT

• IN THE SAME SECTOR

• IN ANOTHER SECTOR

HOW TO ENHANCE INNOVATION ?

CAN ONLY THE SOUTHERN PROVINCE SMALL ENTREPRENEURS

HAVE THE POSSIBILITIES OF INNOVATING ?

A COLLECTIVE EFFORT IS NEEDED BY:

• UNIVERSITY• EDUCATION SYSTEM

• PUBLIC AUTHORITIES

• SERVICE PROVIDERS

• NGO

• BANKS AND THE FINANCIAL SYSTEM

SUSTAINABILITY HAS TO DO ONLY WITH ECONOMIC FACTORS ?

WHAT HAPPEN IF ECONOMIC COMPETITIVENESS GENERATES UNEQUALITIES ?

WHAT HAPPEN IF ECONOMIC COMPETITIVENESS DAMAGES THE NATURAL ENVIRONMENT OR

GENERATES POLLUTION ?

WHAT HAPPEN IF NATIONAL AND LOCAL PUBLIC AUTHORITES DO NOT SUPPORT IT ?

HOW TO ANALYSE THE SOUTHERN PROVINCE COMPETITIVE POTENTIAL

?

1: The competitive characteristics

(Sheet 3)

Agriculture

Special Product

Organolepticcharacteristics

Multi harvest

Healthy

Ecologic

Abundance

Organization

Infrastructure

Others

Industry-arts and craft

Special product

Utilization of specific raw material

It responds to specific needs of the local population

Productive technology or methodology

Organization

Design

Others

Tourism

Specialization in the offer

Diversification in the offer

Good hospitality

Natural environment

Infrastructure

Culture

Historical and archaeological patrimony

Food

Special services

Special events

HOW TO ANALYSE THE SOUTHERN PROVINCE COMPETITIVE POTENTIAL

?

2: The causes of compeitiveness

(Sheet 4)

ClimateGeographic position

KnowledgePopulation character

Entrepreneurial attitude Social Culture

Support from researchServices

Business networksGood Governance

HOW TO ANALYSE THE SOUTHERN PROVINCE COMPETITIVE POTENTIAL

?

3: The sustainability (Sheet 5)

Presence of enterprises

Presence of services

Value of the needed investment

Potentialities of the value chain

Entrepreneurial skills

Economic sustainability

Environmental policies

Environmental behavior

Environmental protection

Infrastructure

Environmentalsustainability

Education policies

Employment generated

Social inclusion and equity pursued

Diffusion of the resource in the area

Gender equity potential

Social sustainability

Resource identified as strategic by the public authorities

Cooperation between the enterprises and the other sectors

Presence of favourable laws and regulations

Participatory governance

Institutional sustainability

RESULTS

1. Employment main opportunities in the private sector (private enterprises)

2. Many potentialities in agro-industry (tea, curd, cinnamon, traditional paddy, fishery, rubber, coconut), rough material (salt, clay), tourism (cultural, health, beach, eco-tourism), cloth industry or others utilising skilled labour.

3. Long term sustainable long term development relies on the capacities of valorising and internationalising the economic potential resources

4. A provincial service system is needed for supporting this strategy

5. The main service to be improved or created are: information about legislation and rule, territorial marketing for the typical local products, access to credit, training, innovation, quality control, promotion of new businesses, internationalization

Cinnamon Pealing

Collectors

Commercialization

Marketing

Industry

Food

Cosmetics

Health

Maintenance

Tools and spareparts production

Packaging

Tools

Fire Wood

Burk Oil

Leaves Oil

MaintenanceTools and spareparts productionPackaging

Reseacrh

Finacing

Training

THE CINNAMON VALUE CHAIN

Mechanization

Fruit & Vegetables

Information

Tools and spare Parts production

Raw material processing

Computer software

Maintenance

Agro-industry

Maintenance Tools and spareparts production Glass or tin

industry

Marketing

Advertising Packaging

Graphic Design Label Transportation

Advice

Maintenance

Ricycling

Environmentindustry

Alternative energy

Business services

Financial services

Education services

The fruit and vegetable value chain

BUILDING, HOUSING

INDUSTRY, AND PUBLIC WORKS

HOUSE PRODUCTS

FURNITURES

WOOD INDUSTRY

CURTAINS

FRAMES

EQUIPMENT

GLASSES STOVES

SANITARIES

BAKED CLAY

FLOORS

ELECTRIC SYSEMS HYDRAULIC SYSTEMS

EQUIPMENT

MAINTENANCE

BRICKS KILNS

BITUMENLIMES

EQUIPMENT

ROAD MAINTENANCE

EQUIPMENT

MAINTENANCE

FINANCE BUSINESS ASSISTANCE TRAININGINNOVATION

Restaurantes, cafés.

etc.

Alojamiento

Servicios de capacitación

Producción de equipamientos

Limpieza

Servicios de información

Computer software

Manutención

Artesanía Insumos

Asistencia empresarial

Equipamiento

Empaque

Marketing

Publicidad Lavandería

Arte gráfica Imprentas

Transportation

Insumos agrícolas

FIG 2b: LA CADENA DEL VALOR TURISTICA

Manutención

Capacitación

Design Control de calidad

Control de calidad

Eventos culturales-deportivos

Servicios organizativos

Computer software

Arte gráfica Imprentas

Insumos de artesanía

Guías

Seguridad

Comunicaciones

Agenciqs Viajes

Bancos y servicios financieros

Renta

Gestión Infraestr.

INSTRUMENTS• National strategic framework shared by the government ministries,

national private stakeholders, and local level representatives of public authorities and private sector

• Territorial strategic plans, shared by the local stakeholders

• Comprehensive territorial service system, such a Local Economic Development Agency

• Local finance, and tailored access to credit, such a Guarantee Fund for supporting access to credit for small, and medium enterprises, and cooperatives

• Territorial marketing strategies, including internal and external marketing

THE LOCAL ECONOMIC DEVLOPMENT AGENCIES

• Leda's are self-sustainable autonomous, and legal structures, organized at local level, where the local stakeholders, in a agreed and autonomous way, take decisions about projects and initiatives regarding sustainable and human economic development.

• Leda's assure the technical conditions for the implementation of the initiatives, they provide comprehensive services to the territory, they rise funds for financing them

• Leda’s are the local reference for international partnerships and foreign investment and

Guatemala

El Salvador

Nicaragua

Honduras

• Ixcan (1993)• Ixil (1993)• Huehetenengo (1996)• Chiquimula (1999)

• Chalatenango (1992)• Morazan (1992)• Ademmis (1994)• Apopa (1994)• Sonsonate (2005)

• Granada (1991)• Leon (1993)• Nueva Segovia (1993)• Jinotega (1994)

• Ocotepeque (1992)• Intibuca (1993)• Valle (2002)

DominicanRepublic

• Valverde (2000)• Dajabon (2000)• Monte Plata (2000)

Bosnia HerzegovinaCroatia

Albania Serbia

• Novi Sad (2002)• Kragujevac (2004)• Smederevo (2005)• Skutari (2001)

• Dyrazo (2003)• Valona (2003)

• Travnik (1997)

Mozambique

• Sofala (1999)• Manica (1999)• Matutine (2002)• Nampula (2004)• Peten (2004)

• Western Slavonja ( 2000)• Krka (2000)• Sisak (2001)• Vukovarska (2002)

South Africa

• Nkomazi (2002)• Syanda (1999)• Vhembe (2003)

Angola

• Bengo (2001)• Bengele (2002)• Kuanza Sul (2001)

Colombia

• Nariño (2004)• Santander (2004)• Medellin (2004)• Urabà (2005)

Ecuador

• Cuenca (2004)• Santander (2004)• Medellin (2004)

THE LEDA’S PROMOTED BY THE UNITED NATIONS ASSOCIATED IN A NETWORK (ILS LEDA,

www.ilsleda.org)

Territorial marketing Territorial brandsProject financing Strategic projects' management Internationalization promotion Support to international partnerships

TYPICAL LEDA’S SERVICES

Territorial Animation

Territorial diagnosis for identifying economic potentialities;Promotion of a favorable climate for entrepreneurship Promotion of value chains Support to the disadvantaged populationSupport to women entrepreneurship

Access to credit

Realization of bank agreements Assistance to business plans Promotion of guarantee fund or viable financial mechanisms Assistance to the banks for the loans recuperation

Business Services

Support of feasibility studiesTechnical, managerial and skill trainingInformation systemPromotion of innovation and technological exchange

Territorial Promotion

THANK YOU

GIANCARLO CANZANELLI

ART/UNDP

Giancarlo.canzanelli@undp.org

RESULTSINSTRUMENTSTHE LOCAL ECONOMIC DEVLOPMENT AGENCIESTHE LEDA’S PROMOTED BY THE UNITED NATIONS ASSOCIATED IN A NETWORK (ILS LEDA, www.ilsleda.org)TYPICAL LEDA’S SERVICES