iatto forum – export summit ii a survey on national promotion strategies seve’s 3 year export...

IATTO FORUM – EXPORT SUMMIT II

A survey on national promotion strategiesSEVE’s 3 year Export Business Plan for the Greek Economy

Dr. Tasos AlexandridisSEVE, Executive Member of BoD

Ms. Maria KechagiaEconomic Analyst of Institute of Export Research & Studies

25 September 2013 1

2

-9% of the Greek companies record income from export activity

-Exports of Greek companies as % total income: 2% when EU27 average: 4,6%

Main challenges:

1. Absence of human resources skills for internationalization

2. Absence of financial resources and financial support

3. Absence of exploitable information/ knowledge related to foreign markets (consequence of the previous 2 challenges)

Factors of extroversion – Greek companies

Absences/ Challenges Internationalization problems

Absence of human resources skills for internationalization

Inefficient number or/and inefficient trained staff for the implementation of internationalization actionsLack of time for extroversion issues managementLack of time and funds for training

Absence of financial resources and financial support

Inefficient capital for funding of export activitiesTax disincentives for exportsBureaucratic custom proceduresHigh cost for product transfer and insurance

Absence of exploitable information / knowledge related to foreign markets

Inefficient or/and restricted information on opportunities tracking & new markets analysisAchievement of reliable representation abroadProblems ensuring appropriate and reliable transportComplexity of distribution abroad

3

1. Lack of National Extroversion Vision

2. Lack of National Strategy, Goals and Directions for Exports

4. Lack of Targeting and failure to adapt Greek Products to new facts

8. Lack of accurate information to the Export Business

7. Lack of systematic training in the Area of Exports

5. Non – Active role of extroversion Actors

LACK OF COHERENCE AND COORDINATION OF NATIONAL LACK OF COHERENCE AND COORDINATION OF NATIONAL EFFORTS TO BOOST EXTROVERSIONEFFORTS TO BOOST EXTROVERSION

Lack of common vision, strategy, objectives and

guidelines

6. Unequivocal orientation of Export Support Actions

3. Lack of Supporting framework for exporting

businesses

Large Number of Extroversion Bodies

Overlapping Responsibilities

Lack of Coordination

Absence of Monitoring and

Supervision Mechanisms

WEAKNESSES OF EXISTING WEAKNESSES OF EXISTING GREEK EXPORTS’ SUPPORT GREEK EXPORTS’ SUPPORT

SYSTEMSYSTEM

Greek Export Support System – What’s going wrong?

4

•Focus on the continuous improvement of their international competitiveness through the development of the appropriate Human Resources skills

•Change management - a basic factor of adaptation of enterprise in conditions of external environment and markets, that impose also the conditions of competition

What we aim to is upgrade the HR knowledge, skills and competencies with regards to extroversion for the enhancement of the companies’ international

competitiveness

What needs to be done – Companies

5

“Support of Human Resources of SMEs in Extroversion Issues”

•Focus on the continuous improvement of their international competitiveness through the development of the appropriate Human Resources skills

•Change management - a basic factor of adaptation of enterprise in conditions of external environment and markets, that impose also the conditions of competition

Strengthening Human Resources SME issues Extroversion

To bind the "limits" of Greece?

Entrepreneurship has "no limits".

Become Extrovert, through the Program for the Support of Human Resources of SMEs regarding issues of Extroversion, implemented by the Hellenic Management Association (HMA), under the Operational Programme "Human Resources Development".

Program Description

The program covers the following two actions:

Action 1 "Counselling and Mentoring in Extroversion issues".

The objective of Action 1 is to inform participants about theories and techniques that will help:

To increase their understanding regarding the business internationalization process.

To have, at any time at their disposal, a quick export readiness assessment tool of their business.

Acquire a framework for the programming of the export operations of their business.

Facilitate to take operational decisions on practical issues extroversion.

The Advisory will run for 22 hours per person and will be subsidized with € 5 (gross) per hour.

Action 2 "Training to develop the skills of HR of SMEs in Extroversion issues".

Action 2 relates to training to develop skills of business workers to create a considerable manpower reserve, expertise and technical issues extroversion benefit businesses and the economy.

The training will last 40 hours and will be subsidized with € 5 (gross) per hour.

•SEVE implements together with EEDE the “Operational Programme Human Resources Development 2007 – 2013 a learning program for the enhancement of the Greek extroversion, competitiveness and innovation” in cooperation with SEV.

Program goals:

-Identify, develop and systematically promote policies and practices for the enhancement of extroversion, entrepreneurship and innovation to the working population

-Create a relevant corporate education to entrepreneurs, employees and new graduates

What we aim to is upgrade the HR knowledge, skills and competencies with regards to extroversion for the enhancement of the companies’

international competitiveness

Source: NBG

GREECE

Greek export performance

Current account and trade balance trends

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Exports of goods as % GDP EZ-17 (2012)

Source: Eurostat

Even though Greece still lags far behind the Eurozone average in export performance, 14% contribution of exports of goods to the Greek GDP is a historical record for Greece (taking however into consideration the Greek recession and significant fall of the GDP)

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Greek export composition per sector

Source: Eurostat

Exports as a share of total Greek exports

(2012)

Exports as a share of industry

production (2009)

Average Annual trend

(2003/12)

Food 14,7 12,1 6,8

Drinks & Tobacco 2,4 28,2 0,3

Non metalic products 2,8 11,7 2,8

Chemicals & Plastics 10,4 39,8 5,9

Oils and Fuels 38,9 14,8 30,3

Wood & Paper 1,2 9,4 4,4

Textiles & Clothing 6,5 46,9 -5,8

Basic metals 10,7 44,0 10,8

Machinery & equiment 6,8 39,2 3,8

Transport 1,7 43,4 4,5

Other 4,0 - 10,3

•Best performing merchandise non oil export sectors are basic metals, food and chemicals & plastics•Further improvements in cost competitiveness are essential to transform the productive landscape of the economy

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Greek export composition per geographic region

Source: Eurostat

•Until 2010: EU preserves a constant high share of Greek exports•2011-2012: The geographical diversification of exports of goods begins, due to the proximity (eg. Turkey), combined with the rising wealth of the emerging economies

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B.1 Markets

We focus our analysis on 6+2 markets

6 developing economies

Brazil

China

India

South Korea

Russia

Turkey

+2 developed economies

USA

Japan

Export specialization

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B.1 Markets

Economic Analysis of trade flows. Greek exports to key target markets in 2003 and 2012


•Increasing importance of the target markets, as within 10 years, from 2003 to 2012, Greek exports to the 6 developing economies grew from 7% to 15%•Looking solely on 2012, Greek exports to Brazil rose by 101% (!), in South Korea by 71% and in Japan by 44%, from the previous year

Source: Eurostat

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B.1 Markets

Development of Greek exports between 2003-2012 to 6+2 target markets, the EU-27 and the rest of the world


•The big rise from 2010 and onwards to the 6 developing target economies is mostly due to mineral fuels in Turkey. However, still the trend is on the strong rise

Source: Eurostat

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B.1 Markets

Why Brazil?


•7th strongest economy in the world (GDP $ 2,3 trillion)

•GDP per capita raised almost 50% from 2004 ($ 8.100) till now ($ 12.000)

•In 2010, the industrial production was increased by 11,5% and in 2011 remained stable

•22th bigger import economy (more than $ 220 billion)

Why China?

•The 2nd strongest economy in the world (GDP $ 11,5 trillion)

•Real GDP growth 2012: 9.4%

•1st place in foreign reserves in the world ($ 3,2 trillion)

•1st place in FDI inflow

•Industrial production growth of 13.9%

•The 2nd largest importing economy in the world.In 2012 China’s imports were$ 1,75 trillion

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B.1 Markets

Why India?


•The 3rd largest economy in the world (GDP $ 4.5 trillion)

•Low unemployment rate: 9.8%

•14th place in FDI inflow

•One of the major importing economies. In 2012 India’s imports were $ 488 billion

Why South Korea?

•12th strongest economy in the world (GDP $ 1,57 trillion)

•GDP per capita almost doubled in last 10 years (from $ 19.000 in 2002, to $33.000 in 2012)

•Industrial production raised by 12.1% in 2010 and 3.8% in 2011

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B.1 Markets

Why Russia?


•The 6th largest economy in the world (GDP $ 2.4 trillion)

•4th place in reserve assets: $ 500 billion

•One of the major importing economies. Russia’s imports in 2012 were $ 315 billion

Why Turkey?

•16th largest economy in the world (GDP $ 1 trillion)

•Real GDP growth in 2012 was estimated at 8.5%

•Industrial production growth: 9.2%

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B.1 Markets

Why USA?


•The strongest economy in the world (GDP $ 15.3 trillion)

•One of the highest per capita GDP in the world ($ 49,000)

•The country obtains $ 148 billion in foreign reserves

•The biggest importer in the world. In 2012, USA’s imports were $ 2.2 trillion

•10th place in economic freedom index

Why Japan?

•4th largest economy in the world (GDP $ 4.5 trillion)

•2nd place in foreign reserves in the world ($ 1.26 trillion)

•4th largest import economy imports. In 2012, Japan’s imports were $ 885 billion

•The country obtains the 3rd higher life expectancy rate in the world (84 years)

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B.2 Sectors

Building on the EXPORT SUMMIT I presentation, we focus our analysis on 10 Greek sectors & products, which have RCA>1 for the period 2003-2012, when compared to the OECD countries.


RCA>1 means that for the certain period, this sector/ product has comparative advantage in international markets to another market (s)

Source: Eurostat, author’s calculations 20

B.3 Export Specialization Ratio (RCAsp)

Very often the RCA index can be also be interpreted as the export specialization ratio. This, a light modification of the simple RCA index is made to allow us to focus on a particular market (s).

RCAsp is calculated as follows:


Similar to the RCA, RCAsp>1 reveals a comparative advantage of product j in market k, while if RCAsp<1 reveals comparative disadvantage in market k. 21

B.3 Export Specialization Ratio (RCAsp)

Data

•We used export data for Greece and import data for the 6+2 target economies

•The analysis employed sectoral data under the HS2 classification

•Data source: International Trade Center (ITC)

Relative EU import share for Greece =

share of target market’s imports from Greece/

share of target market’s imports from the EU

Note. The analysis of every sector included only the products with RCA>1 during the period 2003-12 internationally. The rest of the products with RCA<1 were left behind.


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C.1 Non processed leather, leather & fur

RCA (2003-12) = 10,80

RCAsp results

RCAsp (2003-12)

Average annual RCAsp trend

(2003-12) %

Average annual import trend

(2003-12)%

exports as a share of total Greek exports to the country

(2012)%

Relative EU import

share for Greece (2012)

%Brazil 27,42 27,3 -14,5 0,0 0,0China 2,88 1,2 6,6 4,1 0,6India 10,34 5,2 7,9 0,0 0,0S.Korea 5,63 3,4 0,0 1,4 3,9Russia 16,50 -13,6 28,5 29,0 28,1Turkey 4,31 5,7 -0,4 8,8 10,0USA 29,98 0,8 -2,8 0,8 0,9Japan 21,44 2,9 -2,0 0,1 0,5

•Greek non processed leather, leather & fur have comparative advantage in all target markets•However, in Brazil, USA and Japan RCAsp is very high, but Greek exports too small in size•Russia, China and India are growing markets in this sector. Greece up today has only exploited its comparative advantage in fur only in the Russian market. The rest remain unexploited

Source: ITC, author’s calculations

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C.2 Animal or vegetable fats & oils

RCA (2003-12) = 7,30

RCAsp results

RCAsp (2003-12)


(2003-12) %


(2003-12)%


(2012)%

Relative EU import


%Brazil 5,71 -8,7 20,7 0,3 0,6China 3,16 -6,2 16,4 2,2 5,0India 1,24 -1,3 16,4 0,2 0,8S.Korea 8,88 -8,5 14,4 0,1 0,5Russia 3,51 4,4 7,6 1,6 2,3Turkey 3,24 -6,7 14,2 0,7 6,1USA 11,59 -13,4 14,5 3,2 2,1Japan 11,52 -6,3 8,9 0,6 1,3

•Greek animal/ vegetable fats and oils enjoy comparative advantage in all target markets• All target markets show growing demand in animal fats & oils during the last decade. Brazil displays the highest annual import increase (20,7%). However, Greece exports only 0,3% of its production in animal fats & oils in Brazil•Except for Russia, there is a falling trend in Greece comparative advantage in every market over the decade


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C.3 Prepared food, beverages, tobacco

RCA (2003-12) = 3,38

RCAsp results

RCAsp (2003-12)


(2003-12) %


(2003-12)%


(2012)%

Relative EU import


%Brazil 11,33 -5,8 19,1 0,1 0,3China 25,44 -10,6 24,3 0,2 0,2India 44,85 -7,8 26,9 0,1 0,3S.Korea 8,84 -2,3 9,0 0,4 1,1Russia 2,20 5,2 8,7 2,8 1,3Turkey 14,24 -2,6 11,4 1,0 0,7USA 4,74 -4,5 5,7 6,6 1,2Japan 3,25 -2,4 6,4 0,7 0,4

•Very high RCAsp are recorded in India, China, Turkey and Brazil, much higher than the average RCA (3,38). Greek exports of prepared food, beverages & tobacco are nearly zero in these markets, while demand over the decade is steadily growing•Preparations of fruit & vegetables and tobacco are the products that record the higher RCAsp in India at a product level


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C.4 Clothing

RCA (2003-12) = 2,46

RCAsp results

RCAsp (2003-12)


(2003-12) %


(2003-12)%


(2012)%

Relative EU import


%Brazil 5,90 -17,3 21,2 0,0 0,1China 5,09 -8,9 9,1 4,8 4,6India 12,86 -4,9 10,0 0,0 0,1S.Korea 5,12 -10,8 6,8 0,1 0,6Russia 4,08 -17,8 24,5 1,1 0,9Turkey 2,49 -10,3 8,1 14,6 17,4USA 2,02 -10,8 1,2 1,2 0,5Japan 2,13 -11,5 4,9 1,5 1,1

•Except for China and Turkey, Greek clothing exports to the other target markets are very little in 2012•At a product level, cotton and articles of knitted apparel show high RCAsp. Cotton in the USA, India and Japan and knitted apparel in India and China


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C.5 Non metallic minerals

RCA (2003-12) = 2,02

RCAsp results

RCAsp (2003-12)


(2003-12) %


(2003-12)%


(2012)%

Relative EU import


%Brazil 4,01 -3,9 17,0 2,1 3,8China 6,43 -5,0 17,2 17,0 8,7India 3,90 -6,4 25,3 0,7 1,8S.Korea 4,72 0,3 6,5 0,4 2,4Russia 3,36 -4,5 20,1 1,5 1,7Turkey 6,16 -3,4 12,5 3,0 5,6USA 5,29 -0,4 1,6 8,6 4,9Japan 5,18 0,4 3,6 0,3 1,1

•Greece is very active in marble-cement-suphur etc exports in China, taking advantage of its comparative advantage in the market. The same occurs for the USA•Still there are a lot of glowing market opportunities in all target economies to develop


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C.6 Mineral fuels

RCA (2003-12) = 1,90

RCAsp results

RCAsp (2003-12)


(2003-12) %


(2003-12)%


(2012)%

Relative EU import


%Brazil 0,83 19,2 18,9 0,4 0,0China 1,14 9,4 28,2 0,8 0,2India 0,43 18,1 25,1 0,0 0,2S.Korea 0,50 14,6 17,4 1,0 3,9Russia 10,18 28,6 12,4 0,0 0,0Turkey 0,70 15,7 18,4 20,3 33,1USA 0,82 16,0 9,9 3,3 0,2Japan 0,50 15,0 14,1 0,0 4,9

•Apart from Russia, Greece has no comparative advantage in the rest of the target countries. However, we export 20,3% of our mineral fuels to Turkey.


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C.7 Live animals, animal products

RCA (2003-12) = 1,71

RCAsp results

RCAsp (2003-12)


(2003-12) %


(2003-12)%


(2012)%

Relative EU import


%Brazil 6,17 -2,9 20,0 0,0 0,0China 8,51 0,5 14,8 0,0 0,1India 122,80 4,6 16,2 0,0 0,3S.Korea 4,84 3,7 6,7 0,1 0,8Russia 2,40 -0,2 19,0 1,7 1,1Turkey 31,43 -0,4 13,1 0,1 1,6USA 5,78 2,0 2,8 3,9 4,6Japan 1,95 5,7 2,0 0,4 1,0

•A very high RCAsp is estimated for Greek exports of fisheries in the market of India (122,80), but in 2012 Greece exports 0,0% of fisheries in this market•We are doing well in the USA, in fisheries and dairy products, having achieved a higher relative share in the market, compared to the EU average. Nevertheless, there are still many opportunities hidden in the emerging markets


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C.8 Vegetables & fresh fruits

RCA (2003-12) = 1,65

RCAsp results

RCAsp (2003-12)


(2003-12) %


(2003-12)%


(2012)%

Relative EU import


%Brazil 2,01 6,4% 8,2 0,0 0,0China 2,60 -6,9% 22,6 0,1 0,5India 4,48 4,3% 15,2 0,1 0,7S.Korea 3,28 -0,8% 10,2 0,1 0,5Russia 1,43 -0,4% 17,9 9,6 7,4Turkey 3,48 -0,1% 11,5 3,4 7,3USA 5,04 -5,2% 9,3 0,6 0,6Japan 1,93 1,8% 4,8 0,1 0,1

•Growing demand is estimated in all the target economies during the past decade•Greece has comparative advantage in all markets exporting vegetables & fresh fruits•There is a higher relative EU import share for Greece in Russia and Turkey, which consist traditional markets for the Greek fresh vegetables & fruits


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C.9 Basic metals

RCA (2003-12) = 1,24

RCAsp results

RCAsp (2003-12)


(2003-12) %


(2003-12)%


(2012)%

Relative EU import



•Aluminum is the product with the highest RCAsp in the sector, especially in Brazil and China•Greece is active in the US, Turkey and China, while in the rest of the markets, Greek exports have just started to grow


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C.10 Chemicals & Plastics

RCA (2003-12) = 1,19

RCAsp results

RCAsp (2003-12)


(2003-12) %


(2003-12)%


(2012)%

Relative EU import



•As in the former sectors, there is growing demand, falling trend in the RCAsp through the decade•Greece enjoys comparative advantage in all the target economies, while the country is yet active only in Turkey and Russia


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Opportunities for the internationalization of European SMEs (2011)European Commission

Directorate-General for Enterprise and Industry

Figure: Co-ordination of internationalization support for SMEs

Discussion

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Overall recommendations: internationalization support at an EU level•Raising the profile of support for internationalization is required within the context established by Europe 2020. The overall policy should be practically supported and built on what already exists, at some point•To support the internationalization of Greek SMEs and achieve a sustainable export driven growth, Greek exporters need a National Moderator, from the private sector, to maximize the relevance and optimize the coordination of all national attempts for extroversion support

Discussion

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SEVE’s proposal to:

-Task Force

-Ministry of Development and Competitiveness

-Regions of Macedonia and Thrace

-Greek banks

-Greek Business Associations

-Greek enterprises

Discussion

35

Thank you for your attention

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iatto forum – export summit ii a survey on national promotion strategies seve’s 3 year export...

Documents

export business7

extroversion issuesfocus

lack of national strategy

export activityexports

lack of accurate information

greek products

greek economydr

lack of targeting