Catalytic Lead Firms Usaid CI
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Transcript of Catalytic Lead Firms Usaid CI
catalytic
lead• Characteristics of catalytic firms are having the resources, vision, incentives, and commitment to address industry-wide constraints and drive upgrading investments
•They can be a VC participant or service provider
•They recognize the crucial role that small firms play
Lead firm has the power to set the terms and conditions of transactions, set product and service specifications, have access to key end-markets, and market information
Lead firm may/may not be catalyst firm
We are interested in working with lead firms when they are also catalyst firms
informal formal
Income Generating Activities
Self employed
No Reinvestment
No fixed assets
Traditional technology
Seasonal employment
Mixed with household
No written records
Microenterprises
1-9 employees
Limited reinvestment
Limited fixed assets
Outdated technology
Part time employment
Limited written records
Small Enterprises
10-49 employees
Reinvestment
Fixed assets
Modern technology
Full time employment
Written records
Medium Enterprise
s
50-250 employees
Large Enterpris
es
250 and up employees
CLEAR INDUSTRY LEADERNO INDUSTRY LEADER(S)
MARKET STRUCTUREM
AR
KE
T C
ON
DU
CT
AT
OM
IST
ICC
OLL
EC
TIV
E A
CT
ION MATURE &
COMPETITIVE• Facilitate industry leadership
through industry leader(s)• Identify win-win strategies from
collective action• Support the formalization of
industry, and/or trade groups and associations
LESS MATURE• Include broader section of
stakeholders• Move from short term to longer
term results activities• Shift facilitation from activities to
vision focused
EMERGING• Use VCA to identify interventions
with the greatest leverage• Bring together subgroups of
stakeholders key to the success of the leveraged intervention
• Facilitate activities with short term win-win results
• Build on positive experience to increase incentives to collaborate
VALUE CHAIN WITH LEADER
• Facilitate lead firm investment in industry upgrading
• Consider marginal gains from working principally with leader
• Support industry leader in increasing competitiveness of MSE-lead firm linkages.
Competitiveness
Competitiveness
ISSUES IN WORKING WITH LEAD FIRMS
• Confidentiality• Ownership of learning • Establishing/honoring
commitments • Ensuring MSEs benefit
(causal model, monitoring, performance contracts)
• Replication beyond lead firm
• Understanding incentives• Market distortions
WORKING WITH LEAD FIRMS: ONE OR MULTIPLE?
One Firm
• When only one lead firm is willing to be a catalyst
• When assisting one “winner” will successfully integrate smallholders
• When intervention will likely result in other lead firms replicating the model
Multiple Firms
• Whenever you can• When one lead firm fails
to offer adequate advantages
• When one lead firm fails to honor commitments
• When progress toward your competitiveness strategy cannot be achieved working with a single lead firm