Transcript South-South Cooperation for Development of Small and

SOUTH-SOUTH
COOPERATION for
DEVELOPMENT of SMALL
and MEDIUM ENTERPRISES
(SMEs)
Tajammul Hussain
Director General (International Affairs) COMSATS
Outline









Introduction
International Cooperation for Sharing Knowledge and
Technology
Need for SSC: Shared Goals and Challenges of the
South
South-south Cooperation: More Promising and
Appropriate?
The Potential of South-south Cooperation
Small and Medium Enterprises Development
Scenario of SME Development in Pakistan
COMSATS’ Activities in South-South Collaboration
Conclusions
INTRODUCTION
The concept of South-South cooperation
formally emerged as a universal principle
during the 1970s .
 South-south cooperation can contribute
to the achievement of MDGs.
 South-South cooperation is about the
tremendous force of solidarity, with which
we can overcome even the biggest
challenges.

INTRODUCTION
No single country, even the most advanced
among developing countries, has much
hope of reaching individually expected
growth and development and influencing
outcomes of international agenda.
 Our countries can collectively play a more
effective role in achieving development
objectives and in shaping international
relations.

INTERNATIONAL COOPERATION for
SHARING KNOWLEDGE and
TECHNOLOGY

The notion of international cooperation
came to existence with the UN charter,
which pledges to
“employ international machinery for the
promotion of the economic and social
development of all people”.

Technology co-operation enables the
sharing of risks, rewards and progress of
technology development and enables coordination of priorities.
International Cooperation…contd.

International Cooperation can focus on:
– Sharing knowledge and information, between
developed and developing countries
– Coordinating R&D priorities in different
national programmes
– Pooling risk and reward for major investments
in R&D, including demonstration projects

International Cooperation can be among
South-South countries or North-South
countries.
NEED for SSC: SHARED GOALS and
CHALLENGES of the SOUTH

The countries in the south generally share
certain commonalities such as similar
developmental experience and are also faced
with common challenges such as high
population pressure, poverty, hunger, disease,
environmental deterioration, brain drain, lack of
indigenous research and commercialization etc.

In view of this, south-south cooperation is
clearly becoming more relevant.
SOUTH-SOUTH COOPERATION: MORE
PROMISING and APPROPRIATE?
The private sector of developed countries aims
at maintaining their technological edge over the
developing countries, and hence is averse to
sharing its technology
 The interest of many developed countries in
helping developing countries seems to be
receding
 South-south trade has been rising at 11%
annually for the past decade.
 The LDCs could find economic and sustainable
solutions to address their needs and problems,
by sharing and learning from the experiences of
other developing country counterparts.

THE POTENTIAL of SOUTH-SOUTH
COOPERATION
The developing countries have many
things in common, and their capacities
and resources are often complementary
and exist at different but relatively close
levels of development.
 This would facilitate the transfer of
technology and exchanges of experience
and other resources among these
countries.

The Potential…contd.

Today several developing countries have
diversified their economies and have a
large production capacity for goods and
services.

The information society revolution has
opened up new opportunities for
developing world in business especially
services from north - south and south –
south. However, it needs highly trained
human capita
The potential…contd.
The accelerating trend towards globalization and
trade liberalization has created new opportunities
for exchanges of goods, services and information
among developing countries.
 Today several developing countries have human
resources properly trained in institutions of high
technical quality.
 In addition to Governments, new participants in
international cooperation are continually emerging
in developing countries, for example, participants
from civil society and the private sector, which play
a growing role in South-South cooperation.

The potential…contd.
Increasingly South-South cooperation is seen as a
necessity and fundamental component of
international cooperation for development.
 South-South cooperation completes North-South
cooperation and fits perfectly into triangular
cooperation arrangements where the know-how
and technology of one or several developing
countries are combined with financial support
from one or several developed countries to provide
assistance and to transfer technology and knowhow.

Small and Medium Enterprises
Development
INTRODUCTION to SMALL and
MEDIUM ENTERPRISES (SMES)
Small and medium enterprises (also
SMEs, small and medium businesses,
SMBs, and variations thereof) are
companies whose headcount or turnover
falls below certain limits.
 Two types of SMEs:

– Manufacturing, Manufacturing-Related
Services and Agro-based Industries
– Services, Primary Agriculture and
Information & Communication Technology
Introduction to…contd.
SMEs have been the backbone of economic
growth of an economy as an engine for the
industrial development
 The potential of SMEs to promote domestic-led
growth in new and existing industries and to
strengthen the resilience of the economy in a
competitive and challenging environment are
inarguable
 Economic growth in developed countries such as
China, Japan, South Korea, Taiwan and many
others, were significantly generated by SME
activities.

THE NEED to DEVELOP SMEs
On several social and economic grounds, small
and medium-sized enterprises (SMEs) are of
overwhelming importance in most Asian
countries.
 The SME sector accounts for upwards of 90 per
cent of firms outside the agricultural sector of
East and South-East Asia, and of Japan as well.
 It is also the biggest source of domestic
employment, providing a livelihood for over
three quarters of the region’s workforce,
especially women and the young.

The need to…contd.

The SME sector will remain the backbone of
virtually every economy in this region and, for that
matter, of the world in the foreseeable future.

The SMEs suffer from a variety of structural and
institutional weaknesses, which have constrained
their ability to take full advantage of the rapidly
advancing process of globalization and adjust to
the economic liberalization measures.
The Need to…contd.

These weaknesses include
– the relatively narrow base of the sector and its focus
on low value added products
– the absence of an adequate information infrastructure
– the technological obsolescence of much of the capital
stock
– the inadequacy of the existing support services for
entrepreneurship development and promotion
– a relatively low level of integration in global value
chains.
The Need to…contd.
SMEs also fail to realize their full potential for
creating productive employment because of the
highly uneven dissemination of information
resources.
 There is therefore an urgent need to enhance
the international competitiveness of developing
countries’ SME sector and promoting the
increased inflow of foreign investment and
technology.
 One of the major bottlenecks in this context is
the lack of knowledge at the end of SMEs.

OPPORTUNITIES for SOUTH-SOUTH
CO-OPERATION in SME DEVELOPMENT
The revolution in ICTs has created
unprecedented opportunities to narrow the
knowledge gap between the North and the
South
 Through electronic mail and the internet, data
can now be instantly transferred across vast
distances, providing science-poor countries with
the possibility of access to the latest scientific
and technological information

Opportunities for…contd.
The present information age will help SMEs
exchange information on products,
technologies, human resources, etc. freely,
overcoming obstacles of distance and borders.
 Trade via the Internet has now become an
intrinsic part of an increasingly large number of
SMEs in the developed countries
 About one half and one third of the mediumand small-sized enterprises in Europe maintain
an e-mail contact address or a presence on the
World Wide Web

Opportunities for…contd.
There are now greater scope and more
opportunities for inter-firm linkages for enhanced
collective efficiency, technological and
innovation capabilities, and hence
competitiveness.
 Subcontracting and outsourcing relationships
now cover processing and manufacturing
activities and services of high value addition and
technological sophistication.

CHALLENGES to SOUTH-SOUTH
CO-OPERATION in SME DEVELOPMENT
One of the most critical challenges facing
the developing world is how to bridge the
huge gap between the North and the South
in the production and utilization of
scientific and technological knowledge.
 North-South divide in scientific output and
technological innovations is constantly
widening.
 Reducing these disparities will be a major
challenge facing South-South co-operation
in the 21st century.

Challenges to…contd.
Competition has become increasingly
difficult among the global and regional
economies and enterprises, SMEs included.
 Consumer preferences and market standards
have become more sophisticated and
exacting .
 Market demand is constantly changing, a
trend facilitated not least by the rapid
advances in ICT, bio-engineering and new
materials sciences .

POLICY IMPLICATIONS and OPTIONS
for SME DEVELOPMENT
The new development requires a new or
different mindset in the promotion of SME
development
 SME development can be leveraged through the
maintenance of ongoing access to the available
store of global information and knowledge
 Another is through participation in clusters of
firms, or in networks of inter-linkages backward
with suppliers

SCENARIO
of
SME DEVELOPMENT in
PAKISTAN
SCENARIO of SME
DEVELOPMENT in PAKISTAN
Pakistan became the slowest- growing economy
in South-Asia during the last decade.
 The slowdown is due to the trend slowdown in
the gross fixed capital formation (GFCF)
growth rate which is equally apparent in small
and large scale enterprises.
 Even more worrying is the lack of structural
change, measured by the inertia in the structure
of value-added and the size distribution of firms
in the SME sector during the last two decades.

SCENARIO of…contd.
The Pakistan Economic Survey 2001-02 reported
that:
“….the foundation of industrialization could not be
established without an efficient network of SMEs”
 Credit rationing constraints SME growth and
investment in Pakistan by increasing both the cost
and risk of growth and investment.
 Poor infrastructure, particularly in the power
sector, increases the cost of growth for SMEs.

SCENARIO of…contd.
Low level of skill, training, and education
among workers and management hinders the
development of SMEs in Pakistan.
 High market transaction costs and inefficient
formal contract enforcement inhibit the
development of SME clusters and
subcontracting networks, imposing high
inventory costs and, perhaps, forcing SMEs into
suboptimal diversification.

SCENARIO of…contd.
Lowering the financial constraints,
judicial constraints, fiscal and regulatory
constraints, infrastructure constraints and
human resource constraints would have a
significant positive impact on the growth
of SMEs in Pakistan.
 These constraints can be reduced with
the help of other developing countries in
the South by experience, knowledge and
technology sharing.

Role of COMSATS’ in South-South
Cooperation
Role of COMSATS’ in South-South
Cooperation



COMSATS has conducted various capacity building
programmes in the developing countries of South
COMSATS launched various programs and projects
which include; COMSATS University, Internet, IT
Centre in Syria, Telemedicine and more than 70
independent and joint international workshops,
conferences, seminars and has sponsored many S&T
events for capacity building for its member countries.
COMSATS facilitates the scientists from its member
countries by mobilizing technical human resources
from both the North and the South
Role of COMSATS’ in South-South
Cooperation
COMSATS in collaboration with UNESCO
initiated South-South Technical Cooperation
Programme for its member countries including
Egypt, Sudan and Pakistan. ( Jun 07 – Dec 07)
– Application of Predictive Maintenance
Methods to General Industry
– Concept of Technology Parks in the Light of
Global Experiences
– Human stem cell: Principals and Applications
 South-South Technical Cooperation
Programme, COMSATS Member Countries –
2008-09

Role of COMSATS’ in South-South
Cooperation
South-South Technical Cooperation Programme with
ISESCO
– 8 training workshops and seminars for capacity
building will be conducted in Malaysia, Nigeria,
Lebanon, Kuwait, Pakistan, Syria, Morocco and
Jordan
 Trilateral Collaborative Research Programme (20072009) for the Project titled, “Effective utilization of
Nile Medicinal Plants”

– ICCBS (HEJ Research Institute of Chemistry, Karachi ,
Pakistan
– National Research Centre (NRC) – Cairo, Egypt
– National Centre for Research (NCR) – Khartoum, Sudan
Role of COMSATS’ in SME
Development




COMSATS, UNIDO, & SMEDA jointly developed IIN
(Industrial Information Network) in Pakistan.
COMSATS and INSME collaborated to stimulate
transnational cooperation and public and private
partnership in the field of innovation and technology
transfer to SMEs in COMSATS member states
COMSATS is a member to this International Network and
intends to initiate high growth innovative SMEs in its
member states
Industrial Information Network Initiated jointly by United
Nations Industrial Development Organization (UNIDO),
COMSATS and some other partner organizations in the
year 2001
CONCLUSIONS
Conclusions
The South must intensify co-operative efforts to
enhance its indigenous capacity to generate,
manage and utilize science and technology in
ways that address its own basic needs
 For this to take place, regional and interregional efforts must be vigorously pursued.
 The ultimate goal of these efforts should be to
develop collaborative programmes in capacity
building for policy formation and building
human capital for the development of SMEs.

Conclusions
South-South cooperation on issues related to
technology cannot be isolated from the wider
trends of globalization
 South-South cooperation should start with basic
units such as regional integration and then be
extended to other developing countries as well
as the global community.
 A well developed SME base is capable of
providing immense opportunities for SMEs to
become catalyst in the economy

Conclusions

Cooperation between the countries of the South
should take place to establish a more
comprehensive approach towards SME
development such as
– increasing their access to financing
– providing greater access to business facilities locally
and abroad
– enabling the business infrastructure
– enhancing human capital development
– Being adaptive in the use of information technology
– Access to regional and international market
– Sharing and transfer of technology
The End
Thank you