Organized by
The Mekong Institute
Khon Kaen in Thailand
SME Cluster and Export Consortium
in Lao PDR
B Y:
P H E TA N O N G I N S A R N
YGMS, MEKONG INSTITUTE
K H O N K E A N U N I V E R S I T Y, T H A I L A N D
OCTOBER, 2012
Contents
1.
The Overall of SMEs Situation in GMS Counties
2. SMEs Situation in Laos
3. The Component of SME Cluster
4. Concept of Export Consortium
5. Identity SMEs Cluster in Laos
6. Prospective of SMEs Cluster in Laos
The Overall of SMEs Situation in GMS Counties
SMEs Situation in GMS countries
Small and Medium Enterprises (SMEs) are integral to the economic
development and growth of the ASEAN Member States. SME plays
important role to promote national economy through employment
generation and incomes.
Although there has been impressive economic growth in ASEAN
community, at the same time there is a gap growing between the
increasing prosperity of the other ASEAN member states compared
to Cambodia, Lao PDR, Myanmar and Vietnam – collectively known
as the CLMV countries.
The Overall of SMEs Situation in GMS Counties
GMS SMEs Definition
Cambodia
China
Micro
Small
Medium
Small
Medium
<10
Employee
11-50
51-100
<300 employees; turnover < Employment and
30 million yuan
turnover
300-2,000
employees;
turnover 30-300 million yuan
≤ 19
≤ 99
Lao PDR
Small
Medium
Myanmar
Micro
< 10
Small
10-50
Medium
51-100
Small (production and ≤50 employees or capital ≤50
service)
million baht
Medium (production and 51-200 employees or capital
service)
51-200 million baht
SME
≤300 employees; capital
≤VND 10 billion
Thailand
Viet Nam
Employee
Employee
Employment and
capital
Employment and
capital
SMEs Situation in Laos
Current Structure of Economy
• Lao PDR is a land lock country and on an increasingly sustainable
development path.
• It is located in one of the fastest growing regions of the world economy.
• Natural resources - forestry, agricultural land, hydropower, and minerals comprise more than half of the total wealth of Lao PDR.
• The economy has expanded on table
Period
Economic Growth Rate
2010 - 2011
7.1 %
2012 - 2015
7.6 %
Source information: www.worldbank.org/en/country/lao
SMEs Situation in Laos (Cont)
Direction and Policy for SME Promotion and Development
1.
Creating a friendly regulation to support the business operation
2.
Improving the access to the financial support
3.
Creating new SMEs in different sectors
4.
Encouraging and creating the favorable conditions
5.
Boosting the corporation between SME and major companies.
6.
Promoting the productivities to be become effective
7.
Providing the market for SMEs and expanding the new market.
The Component of SME Cluster
 The concept of clusters – as a “sectoral and geographical concentration of
enterprises”- has been present in industrial economics literature since the
late 19th century. The concept is a somewhat nebulous one however, lacking a
common definition. However their essence is about proximity, networking
and specialisation, as recognised by Porter:
 “Clusters are geographically close groups of interconnected companies and
associated institutions in a particular field, linked by common technologies
and skills. They normally exist within a geographic area where ease of
communication, logistics and personal interaction is possible. Clusters are
normally concentrated in regions and sometimes in a single town”.
Concept of Export Consortium
 A consortium is an association of two or more individuals, companies,
organizations or governments (or any combination of these entities) with the
objective of participating in a common activity or pooling their resources for
achieving a common goal.
Consortium is a Latin word, meaning “Partnership”, association or society'
and derives from consors “partner”, itself from con- 'together'
and sors 'fate', meaning owner of means or comrade.
(by: Giovanna Ceglie,1999. UNIDO)
 An Export consortium is a voluntary alliance of firms with the objective of
promotion the goods, services (And Knowledge) of its members abroad and
facilitating the export of these products through joint actions. Members realize
that cooperation must prevail over competition in order to access key Export
markets and the latest technology. It is temporary! An export consortium can be
seen as a formal medium-to long –term strategic cooperation between firms that
acts as a service provider specialized in facilitating access to foreign markets. Most
consortia are non-profit entities.
Cluster Mapping
SMEs
Government
Donors
Founding
Governance
Development Agency
NGOs
Bank
Facilitators/Technical
support
SMEs
SMEs
SMEs
Silk Cluster
and Export
Consortia
National International
Market
Market
Identity SMEs Cluster in Laos
“Silk handicraft” It is the traditional product from Laos which it had a specific design and
way of produce. Therefore, it had a potential to access to the international market
What are important?
For many centuries, Lao women have woven their own clothes and created their
own designs and patterns.They use 100% silk and cotton grown in Laos as well as all
natural dyes.Nowadays, Lao’s people still give continues to wearing Lao skirt (Sinh)
and also there are many shops are selling Sinh in individual business.
So, it is very important that if SMEs need to find out the international market and
export their products successfully they should combine together to gain more a
power and competency like stay in the group cluster.
Identity SMEs Cluster in Laos
Cluster management skills
–Lack of entrepreneurial attitude or competence
–Lack of trust in alliance partners and involved institutions (shortcomings in the
alliance culture)
–Lack of knowledge of partners
–Lack of informal networking
Access to Market
–Intensified competition
–Internationalization
–Trade and investment liberalization
Thank you