1. Why “Competitiveness”  Previous projects focused on: Developing BSOs & Agricultural Assoc. Policy & Legislation Privatization Developing Market Economy Improving Business Environment Competitiveness is final stage of development

2. Attractive Features of Competitiveness Project  Well-defined, specific, tangible  Private sector focus  Influence policy through Private Sector Associations  Measurable Results (Sales)  Can select sectors  Support US Industries

3. Cluster Selection Criteria  Potential for growth & Results Economic Growth vs. poverty alleviation  Strategic or competitive advantage  Potential for influencing sector  Receptivity & participation of local partners  Other donors, national government

4. What look for in Cluster?  Willingness to commit to strategy  Willing to invest own resources  Willingness to take risks  Willingness to research & development  Willingness to coordinate with competitors Private Sector Lead Growth  Availability of private sector capital inflows  Potential of international investors

5. Measuring results  Increased Sales/Exports!! Improved policies Increased production Improved coordination & interaction Improved productivity Increased investment, employees Quantifying impact from USAID

6. Cluster Development  Insufficient time to create impact  Policy reform is long-term  Pressure for results  Difficult to “create” linkages (profit driven)  Forward linkages vs. backward linkages  Some sectors lend to linkages more than others (i.e tourism, agriculture)  Access “other donor” funding

7. Profitable Clusters are product of decades of evolution Competitive Clusters Need:  human resources,  physical infrastructure,  capital resources,  science R&D,  information technology,  natural resources Can USAID impact all these factors?

8. Cluster Members  Educational institutions  Research institutions  Business organizations  Banks, financial institutions  Government agencies (regulatory & infrastructure)  Suppliers  Competitors AGRICULTURE  Seed suppliers/producers  Chemical inputs  Farm machinery  Farmers  Associations  Irrigation Associations  Producers (meat, poultry)  Processors  Research institutions  Ag. University  Extension Service  Business organizations  Banks, financial institutions  Government agencies (regulatory & infrastructure)  Suppliers  Competitors  Intermediaries  Brokers  Retailers  Exporters

9. Technical Resources at all Levels of Value Chain? Backward linkages Quality Tree Species Fertilizers, pest problems Environmental Issues Deforestation Illegal harvesting Equipment Mfg. Educational Inst. Extension Service Banks, Investors Forward Processing methods Quality Control Government controls International pressures Types of Products Domestic Marketing International Marketing Distribution Market analysis Example of Forest Product Sector

10. Chicken or the Egg?  Does USAID pick clusters that already have certain degree of momentum and prosperity on own?  Is USAID increasing competitiveness or along for the ride?  If cluster development methodology worked….can apply to any sector?