TDI Group: Enterprise, Trade and Economic Development

Welcome to TDI. We are an international development consultancy that specialises in the provision of technical assistance in areas related to trade, export promotion, SME development and foreign direct investment (FDI).  We manage projects on behalf of EuropeAid, the World Bank, Asian Development Bank and the bilateral donor agencies.  We work globally and have been in business for more than 30 years.

Contact Us:  tdireception@tdigroup.ie  or telephone  ++353-1-444 6565 (Ireland)

An Export Quality Infrastructure

The mix of legislation, institutions and procedures to promote use of and implement standards, as well as undertaking certification that meets international requirements, is known as a country’s EXPORT QUALITY INFRASTRUCTURE (EQI).

It is the role of Government to put in place an effective EQI and ensure its operation.  Exporters must be able to access international standards and technical regulations.  They must also be confident that the relevant testing and certification facilities are internationally accredited so that certification will be accepted in any target market.

An EQI has broader importance than supporting exporting development

A functioning quality infrastructure in an economy has wider value than the development of exports.  If a country wishes to attract foreign investment, it must recognise that infrastructure, including quality infrastructure, is a key element an investor will take into consideration. 

Developing an EQI is an important element of many donor funded projects.

Development of an effective EQI is at the core of many trade related donor funded projects.  Typical activities that can be assisted include:

Capacity building to identify and prioritise EQI areas and agencies for support, and define action plans for their improvement.

• Technical assistance to expand accreditation capability, leading to international recognition.
• Training to improve quality and management systems for competent authorities, laboratories and certifying bodies.
• Capacity building to strengthen certification bodies.
• Technical assistance and provision of equipment to enhance quality of testing laboratories to reach international benchmarks. 

 TDI focus on:  Matching Grant Funds

An effective support to policy initiatives to increase growth and bring about economic change

Firms in developing and emerging economies face the ongoing challenge of how to increase their technology and skills levels to match those of their competitors in more advanced economies.  This skills and technology gap inhibits their ability to compete and grow in export markets and increases the risk of international competitors gaining a foothold in their domestic market.

They are also frequently reluctant to undertake major initiatives involving, for example, product and manufacturing development, quality certification or strengthening their position in the value chain.  This reluctance can arise from both economic factors (excessive risk arising from the perceived high cost in relation to extremely uncertain outcomes) and psychological ones (insufficient information and lack of confidence).

 Characteristic challenges facing firms in a developing economy:

• A shortage of corporate investment funds arising from low growth local markets.
• In particular, a shortage of funds to support SME development.
• High cost of finance.
• Products that are falling behind the rapidly advancing demands of globalised markets.
• Inadequate levels of quality and other certifications.
• Poor information on market requirements, particularly export markets, and inadequate dissemination methods to stay abreast of ongoing changes.
• Inadequate management skills.
• Infrequent contact with international markets.
• Loss of domestic market share arising from increasing imports of more sophisticated products.
• Obsolete manufacturing and processing plant and equipment.
• Weaknesses in the technological base.

However, to bring about growth and secure market position, it is essential to improve firm-level competitiveness, upgrade performance, enhance skills, add value and develop market linkages.  Such improvements require proactive and positive steps, based on changes in behaviour and acceptance of new challenges. 

Grants can be an incentive to change

From a policy point of view, encouraging firms to take the necessary steps in the right direction can be assisted by a suitable level of incentive.  The matching grant fund (MGF) mechanism is a proven technique in stimulating change:

• Financial support reduces the perceived risk of investing in business development, thereby encouraging firms to embark on growth initiatives.
• The commitment of firms to development projects is significantly increased by virtue of their contribution to the cost.
• The time limited nature of a matching grant fund provides a finite window of opportunity to obtain assistance, thereby forcing putative beneficiaries into action.
• On the other hand, free services tend not to be critically evaluated, or indeed particularly valued, by enterprises.  A significant, non-trivial contribution by firms to the cost of services assisted by MGFs reduces the likelihood of irrelevant or low value services being supported.
• Establishing a programme on a reimbursable basis facilitates the quality control possible at the stage of performance (although not impact) assessment.
• The existence of an ex-post assessment of performance encourages the maintenance of a focus on quality and value for money throughout implementation of the activities supported.

The availability of financial assistance to mitigate the cost encourages them to take initiatives earlier and to a higher standard than they might otherwise do, or may not do at all. 

The impact in terms of changing behaviour is proven in a properly run matching grant fund:

In a study of the Competitiveness Fund in South Africa, a World Bank funded MGF undertaken by TDI Group, 80% of beneficiaries indicated they had undertaken competitiveness enhancing projects earlier and/or to a higher standard than they would have done without financial assistance. 

 Structure of a grant scheme

The level of financial support is normally 50%.  The project and outputs are normally agreed in advance.  The actual costs to be assisted can vary depending on the type of grant scheme, but it is not normal to support either capital investment or recurrent costs, e.g. wages, rents, etc. 

A Matching Grant Programme is a highly flexible tool.  It can, for example, be made available to all enterprises in a particular country or it can target specific regions, product groups, clusters or value chains that are likely to have an above average economic impact.  A very wide range of competitiveness enhancing activities can be made eligible for grant assistance, or the Programme can focus on a specific activity.  For example, a very successful recent project in Moldova solely targeted quality certification in support of an important government policy initiative to strengthen the country’s quality infrastructure.

TDI Group is a world leader in designing and managing matching grant funds.  It understands the challenges and has a significant track record of successful project execution.  Contact: michaelp@tdigroup.ie for more details or call ++353-1-444 6565

TDI focus on:  The Competitiveness of Firms

There are two platforms of competitiveness for individual firms:

• In-depth knowledge of markets and customer needs.
• The ability to develop high value products and services to satisfy those needs.

Firm level competitiveness is an urgent and major challenge in most developing and transitional economies.  Some of the common factors contributing to this situation include:

• Inadequate market knowledge.
• Low value added.
• Out of date technology.
• Low capacity utilisation.
• Low levels of quality certification.
• Inadequate quality control.
• Inadequate commitment to customer service.
• Inadequate financial reserves to finance export and necessary investment
• Inadequate product branding.
• Poor access to finance through underdeveloped banking systems.
• Inadequate management skills.
• Inadequate research and development.
• Inadequate compliance with EU directives on food safety at all levels of the food chain.
• Inadequate levels of product distribution and market linkages in both the domestic and export markets.
• Deficiency in modern management and marketing skills.

Globalisation has increased the importance of the issue by opening up large new markets for competitive countries and companies.  It has simultaneously raised the costs of low competitiveness, by reducing the ability to sustain uncompetitive companies or provide high-paying jobs for less-skilled employees. Therefore, the dual impact of relatively poor competitiveness is both greater difficulty in successful exporting AND reduced ability to retain domestic markets against more sophisticated imports.  

To attain competitiveness, firms need a well developed system of market intelligence that encompasses knowledge of industry developments, competitor positioning, technological advances and regulatory changes. They need to build strong relationships with individual customers, through which they develop a comprehensive understanding of the businesses and their problems, to enable development and sale of solutions that meet or exceed expectations.  There is no one approach to enhancing firm level competitiveness.  Common techniques utilised both by donor programmes and national governments include:

1. Cluster development.
2. Cost sharing grant schemes.
3. Value chain strengthening.
4. Business-to-business promotion.
5. Technology enhancement through joint ventures.

 TDI Group is a leader in firm-level competitiveness enhancement.  It understands the challenges and has a significant track record of successful project execution.