Strengthening Linkages and Facilitating Trade, Skills

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Strengthening Linkages and Facilitating Trade,
Skills Knowledge Transfer--The Potential of
the Diasporas

• Wanja Michuki
• CEO, The Highland Tea Company
• October 6, 2006

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Facilitating Access of Local Companies to
Overseas Markets
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What Has Been Done

• Local Trade Assistance Workshops for Value-Added
  Products
• (e.g. USAID Kenyan tea companies textiles)
• Workshops educating local companies on
• Marketing strategies- price, placement, promotion
• Distributors and retailers
• US national trade regulations (FDA, Bio-terrorism
  regulations product classification coding, etc)
• Export Process (shipping clearing)
• Overseas Trade Shows
• Product exposure to the trade (consumers,
  brokers, distributors, retailers)
• Supermarkets and Foodservice tours
• Pre-arranged meetings with distributors

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What Has Not Been Done

• Product Representation
• No facility created to promote continual
  representation i.e. a point person (s) to engage
  brokers, distributors and retailers in overseas
  markets after workshops and trade shows
• Adequate Market Readiness
• Trade assistance programs do not discuss
  marketing budgets required to support products
  (demonstrations promotional discounts slotting
  fees advertising fees)
• Limited partnership structures that can
  facilitate consumer product exposure (word of
  mouth PR, or media campaigns)
• Sub-par local capacity to produce products at an
  acceptable standard for the American consumer
• Inland Supply Chain Management
• No contacts with warehouses fulfillment centers
  shipping companies resulting in poor distribution
  systems

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What Is Missing

• Diaspora Participation in Trade Programs
• Diaspora are not included in trade assistance
  programs therefore no cross border linkages are
  established at the end of most trade assistance
  programs to create a foothold in target markets
• Limited formal organization of Diaspora groups
  with aligned trade interests
• Diaspora groups must be self-selecting based on
  time, similar interests and capital availability
  to support ongoing marketing and distribution
• Diaspora groups need to be identifiable and
  easily accessible
• Financial capital for effective marketing and
  product placement
• Timely market-response information and ability to
  respond quickly to market trends (e.g. Fair Trade
  and Organic-mania)
• Limited ability to compete with US-based peers
  due to lack of access to grants or concessions
  that are available to US-companies

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What should be addressed in policy

• Inclusion of Diaspora (entrepreneurs or
  otherwise) in Trade Assistance Programs
• Establish networks with Diaspora nationals when
  trade delegations come to the US for Trade shows
• Notify Diaspora members when workshops are being
  held in home countries
• Identification and Organization of Diaspora
  Groups
• Overseas representation of local company
  interests tax identification marketing trade
  associations
• Lobbying groups for preferential treatment that
  reduces capital costs of market entry (e.g.
  minority certification status provides exemption
  of slotting fees)
• Linkages to US-businesses in related industries
  through personal and professional networks
• Access to capital
• Provision of a direct consumer base

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What should be addressed in policycontd.

• Collective organization of Entrepreneurs in Home
  Countries
• Enables economies of scale and shared costs of
  supply chain management e.g. consolidated
  shipping warehousing and fulfillment
• Create marketing and distribution efficiencies
  e.g. presentation of a basket of goods rather
  than specific products to brokers distributors
  and retailers
• Industry promotion within trade missions of
  Embassies
• Industry promotion in partnership with overseas
  marketing agencies that know the markets and can
  position products adequately
• Overseas Financial Assistance or Grant Programs
• Enable effective industry-specific market
  penetration and still promote healthy competition
• Provide incentives for entrepreneurship

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Tapping into the Diasporas.
Market intelligence, networks, markets, global
partnerships programs with governments and trade
organizations
Create value-adding EX markets
Repatriation of investment funds for
entrepreneurial ventures and/ or value added to
target communities e.g. MDG aligned projects
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Success Stories
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Value-addition in EX markets .

Tanzanian Coffee
Kenyan Tea
Ghanaian Chocolate
Zambian Pepper Sauces
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and the creation of social equity in home
countries
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• Meeting MDGs by 2015 will require a more
  productive and profitable agricultural sector

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Panel Discussion Points

• Placing Social Enterprises on the policy agenda
  of the UN members as powerful agents for the
  attainments of economic and social development
  goals
• Create organizational structures to facilitate
  networking between home country entrepreneurs and
  the Diaspora (and amongst the Diaspora) for
  business partnerships representation and sharing
  of market intelligence
• Governments to create enabling start-up
  environments for social enterprises (e.g. ease of
  starting a business, facilitating exports)
• Governments to provide financial support (e.g.
  small business loans matching of funds) for
  industry-specific export-led growth as an
  incentive for local and Diaspora entrepreneurs

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Discussion