Plenary Session 2: Capacity Building through Technology & Knowledge Transfer Access to Services by Suresh D. deMel Entrepreneur Council Member – Small and Medium Industries, Employers Federation of Ceylon Past President/Founder Member, Business for Peace Alliance Past President/Founder Member, Association of Small and Medium Enterprises in Tourism Director, Hambantota District Chamber of Commerce Managing Director, Lanka Fishing Flies (Pvt) Ltd, Colombo, Hambantota, Ratnapura Joint Managing Director, Game Fishing Sri Lanka (Pvt) Ltd Group Director, Citrus Leisure PLC October 2014

 Types of SME’s in Sri Lanka  The dilemma of the informal SME  Types of Services Relevant to SME’s  Demand Side  Supply Side  Understanding SME’s  Service Needs of SME’s  Entrepreneurship Training  Business Development Services  Information Services  Conclusion: A Case for Local, Indigenous, Institutional Capacity Building

 Informal (the Majority)  Formal but lacks sufficient knowledge  Formal  Growth Oriented/Champions  Urban  Rural

 Cumbersome to provide services to  Not disciplined or regulated  Encourages corruption  Need tax and labor amnesty to become formal  Grows organically  Provides low quality products and services  Fears Formalization

 Entrepreneurship Training  Business Development Services  Information Services  Technology Transfer  Financial Services

 Needs to reach out to be recognized and understood  Better Communication Skills (and Language)  Needs a Hand-up (not a Hand-out)  Donor dependency verses willingness to pay for Services  Needs practical subject matter that matches their realities  “One size fits all” solutions don’t work!  Participatory approach/Learning by doing  Needs continuous support for improvement

 Understanding SME’s - “One size fits all” does not work!  Give a Hand-up (not a Hand-out)  Sustainable Business Model (not a Donor Model)  Work in collaboration with Indigenous Institutions (such as Regional Chambers) that can continue the service support  Understand the SME  Develop services for which there is a demand from SME’s  Affordable Services - Develop services that SME’s feel they need it and for which they are prepared to pay  SME’s are more likely to pay for services which they perceive will bring recognizable benefits  Follow-up

 Size  Location  Sector  Type of product or service  The education of the owner  Managers’ skill levels  Labor base  Wealth  Networks  Customer base  Investment levels  Access to services

 Focus on:  Entrepreneurship Training  Business Development Services  Information Services

 Develop an Entrepreneurial Culture ▪ Being able to take calculated risks!  Communication Skills  Organizational Skills  Management Skills  Human Resource Development  Labor Relations  Marketing  Discipline  Start-up  Incubation  Acceleration

 Continuous Training and counseling (some key needs):  Communication skills  Organizational skills  Management skills  Discipline  Labor relations  Marketing skills  Customer relations  Networking skills  Research & Development Support

 Regulations & Structures  Taxation  Labor  Sector  Market Information  Trade Fair Exposure  Networking  Association / Chamber Membership  Industry Standards  Environmental & Social Sustainability Practices  Research & Development

 Sustainability & Effectiveness:  Services provided directly or by a donor-funded project terminate with the project. Indigenous SME development organizations should be empowered to deliver benefits to SME groups for a period of time after direct service or donor support comes to an end. Although significant (donor) investment may be required to achieve this, a well equipped, sustainable, local organization will eventually serve larger numbers of SME’s than a short-lived project.  An indigenous organization should have a better knowledge of the needs and demands of SME groups and should be able to develop more cost-effective, reliable and tangible services to meet them.