/ PRESENTATION /

INTERNATIONAL SEMINAR ON MECHANISMS TO SUPPORT INNOVATION FOR SMES IN SURINAME

DESIGN & INNOVATION

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Ricardo Mejía Sarmiento, Msc. / R&D+i consultant@ Ministry of Commerce, Industry and Tourism of Colombia.

e - jrmejias@pktweb.com / w - www.pktweb.com / b - jrms.pktweb.com

DESIGN & INNOVATION

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for competitiveness

Objectives (seminar)

Disseminate successful experiences to promote innovation in the context of the ongoing technological revolution, as strategic tools to support the improvement of competitiveness and productivity of SMEs in Suriname.

Provide working methods to promote knowledge management and innovation.

INNOVATION

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in Colombia

NATIONAL DEVELOPMENT PLAN

2010 ‐ 2014“Prosperity for all”

...more jobs, less poverty, and more security...

A country integrated into the world economy with the infrastructure and within a competitive environment that transforms ideas into businesses, the businessesinto jobs, jobs into higher income, and, thus, less poverty and greater wellness and social progress.

The State is the entity that clears the path, lays down the rules, and resolves the conficts but it is the private sector and society in general that builds the road and traverses it.

Good government

Innovation

Environmental sustainability

International relevance

Pillars for the National Development Plan 2010‐2014

SUSTAINABLE GROWTH AND COMPETITIVENESS

The goal is now to defne the guidelines required so the economic growth will continue scaling upwards, be sustainable over time, and likewise be socially and environmentally sustainable.

In order to reach these sustainable economic growth objectives, the NDP 2010 ‐ 2014 has defned three large pillars:

innovation + policies on competitivenessand productivity + stimulation of the growth and job‐

generation engines.

Innovation for prosperity

...innovation should be part of all of theeconomic sectors and extend to all of the links within

the chain...

Innovation becomes the optimum mechanism to guarantee long‐term sustainability of growth and competitiveness of the country.

Innovation does not only mean development of new products and transformation of existing products. Innovation consists in creating new ways of organizing, executing, producing, delivering, merchandising, selling, and relating clients and suppliers, while achieving the generation of added value throughout the production chain.

Innovation does not only mean development of new products and transformation of existing products. Innovation consists in creating new ways of organizing, executing, producing, delivering, merchandising, selling, and relating clients and suppliers, while achieving the generation of added value throughout the production chain.

Colombia currently evidences considerable lagging compared to countries with similar characteristics in the development of science, technology, and innovation. To illustrate, total investment in research and development in Colombia is 0.2% of GDP which is a very low level compared to countries such as Argentina which invests 0.5%; Chile 0.7%; Brazil 0.8%; or South Korea 3.2%.

WHY?

(i) institutional weakness, (ii) insuffcient use of the mechanism for the protection of intellectual property, (iii) limited access to f nancial instruments for innovative enterprises, (iv) low use of the TIC, (v) insuffcient human resources qualifed in pertinent areas, (vi) small number of mechanisms to attract Colombian residents from abroad, (vii) technical limitations and multiplicity of functions by the authority of competence.

...knowledge and innovation + intellectual property: instrument for innovation + promotion of competition in the marketplace...

INNOVATION

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...in practice...

HOW?

THROUGH INSTITUTIONS

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***MINISTRY OF COMMERCE, INDUSTRY, AND

TOURISM

REPUBLIC OF COLOMBIA

MAIN GOAL

The Ministry of Commerce, Industry and Tourism (Spanish: Ministerio de Comercio, Industria y Turismo) or MinCIT, is the national executive ministry of the Government of Colombia concerned with promoting economic growth though trade, tourism and industrial growth.

Vice Ministry ofForeign Trade

Vice Ministry of Tourism

Vice Ministry ofBusiness Development

& LINKED INSTITUTIONS

***BUSINESS DEVELOPMENT SERVICES FOR MICRO, SMALL, AND MEDIUM

ENTERPRISES IN COLOMBIA

COLOMBIAN LAW CLASSIFIES BUSINESSES AS FOLLOWS

M

Micro

< 10 employees

< 500 MMLW

S

Small

< 50 employees

< 5000 MMLW

Medium

< 200 employees

< 30,000 MMLW

L

Large

>200 employees

> 30000 MMLW

M

BUSINESSES IN COLOMBIA

MSME LARGE96% of Establishments81% of Employment40% of GDP

0.1% of Establishments 19% of Employment60% of GDP

Vs

BUSINESSES IN COLOMBIA

MSME LARGE621.447 MSMEs 8.858 Large

Enterprises

Vs

THE STRONG PRESENCE OF MSMES IN THE COLOMBIAN ECONOMY CALLS FOR THE DEVELOPMENT OF DIFFERENTIATED TOOLS.

OUR MSME DEVELOPMENT PROGRAMS INCLUDE:

+ Instruments for creation and strengthening (nonfnancial).

+ Instruments of Financial Support.

INSTRUMENTS FOR CREATION AND STRENGTHENING

(NONFINANCIAL)

Establishes relations with all nonfnancial business development services for the creation and strengthening of MSMEs

Search for capacity development within the company:

Managerial and Administrative aspectsAccounting and Financial ManagementMarket AccessInnovation within the company(among other things)

National Prize for MSME innovation

This aims to recognize and encourage talent, applied research, and business attitudes that have positive impacts on competitiveness.

Micro & Small Enterprises (as vendors) Medium & Large Enterprises (as buyers)

Boosting sales within the domestic market:

Business Matchmaking EventsTrade Missions Market Research

National Entrepreneurship Policy,More companies in the country

…a systemic approach that seeks to foster and strengthen an integrated ecosystem through the Regional Networks of Entrepreneurship and the joint support of all institutions in the country.

Vision of the Ecosystem

This administration aims to create an ecosystem for entrepreneurship that is tailored to the region and type of enterprise.

● Micro and Small < 75,000 USD (141’334.500)

● MSMEs <125.000 USD (235’558.000)

Open calls exclusively for Micro and Small Enterprises, as well as MSMEsOpen calls exclusively for Micro and Small Enterprises, as well as MSMEs

● Goods and services produced by MSMEs

Preferential ConditionsPreferential Conditions

● Preferences for domestic MSMEs

Advantageous Factors Advantageous Factors

Advantages for MSMEsDecree 734 of 2012

The TRM for these purposes in 2012 is $ 1,884.46

Proexport carries out activities to make best use of MSMEs:Market AnalysisSeminar Advice on Exporting Trade Missions Business Matchmaking events

(among others)

By 2014, we will have 14 treaties in force with more than 50 countries, which provide preferential access to 1.5 billion consumers

http://www.colombiatrade.com.co/ruta-exportadora

For MSMEs, we have Export Route.

The Intellectual Property ClassroomSuperintendent of Industry and Commerce

Created with the aim of fostering a culture of safety and protection of industrial property in Colombia through the registration of trademarks, patents and utility models.

There have been developed at national level workshops, public lectures, meetings, fairs and regular courses in industrial property issues, with the participation of over 1,000 people, including businesspersons, students, and researchers.

INSTRUMENTS OF FINANCIAL SUPPORT

Refers to fnancial services for the creation and strengthening of MSMEs

Financial Services

Credit Lines

Credit Guarantees

Capital Funds

Angel Investor Networks

Start-upFund

Seed Capital

Facilitating access to credit is one of the main tools provided by the Ministry of Commerce, Industry and Tourism through its member institutions.

Best rates, terms and payment (grace periods)

Bancoldex credit lines

Guarantees on FNG Lines

Discounts

During 2012, Bancoldex disbursed COL $1.6 billion in loans (USD 865 million), reaching 486 of the country’s 1102 municipalities.

About 58% of the funds were granted in loans to MSMEs and over 34% of the funds were used to modernize enterprises.

So far in 2012, the National Guarantee Fund (NGF) has benefted 296,057 users, contributing to business development in Colombia.

In 2012, the goal for secured loans to support MSMEs nationwide is COL 8.4 billion (USD 4.589 million).

A Seed Capital Fund to support business initiatives from entrepreneurs who meet the profle of benefciaries.

Entrepreneurs must submit a business plan that is feasible through an Entrepreneurship Unit (419 Entrepreneurship Units throughout the country).Upon approval of the project, the new company receives grants for the development of the approved project.The fund will allocate resources for USD 40 million in 2012.Since the Fund's inception (2005) to date, 2691 companies have been funded by COL 160 billion (USD 87 million)

Dynamic Entrepreneurship is one that grows proftably, quickly, and steadily, where one is able to reinvest and to achieve a fairly signifcant level of sales in one decade.Capital contributions from COL 50 million to COL 350 million (USD 27,000 to USD 189,000)

It is a program that promotes the creation of Innovative and Dynamic Entrepreneurship with seed capital grants.

Program that promotes the networking of angel investors that invest in startups.

There are 7 networks in operation and 3 in structuring

The program supports:

Sponsorship for the formation of new networks.Educates investors on how to facilitate interactions with entrepreneurs during the selection and negotiation for investment.Creating incentives for investment in dynamic enterprises.

Venture Capital Funds

Venture Capital funds are vehicles that invest in startups that have growth potential and require not only resources, but also management.

Currently, there are fve venture capital funds operating in Colombia and 6 in structuring.

Private equity funds are vehicles that allow the movement of capital to companies in the advanced stage of development, which seek to strengthen the company with a larger market potential.

Currently in Colombia, there are 24 private equity funds in operation.

In Colombia, Industry Capital Funds mobilize over USD 2.6 billion.

Private Equity Funds

****NATIONAL DESIGN PROGRAM

Design has been recognized at government level in Colombia since 1994 and features in the portfolio of the Ministry of Commerce, Industry and Tourism. The Ministry, through the National Design Program, promotes design as a driver of innovation in Colombian industry.

Background

Conceptual Strategy

Conceptual model

Aproach

SME in terms of design knowledge

Levels of design insertion in MSMEs

Levels of design insertion in MSMEs

Strategic lines:

- Knowledge Transfer in design.- Viewing and promoting success stories in design- Public policies and strategic plan

Promotes the use of industrial design as acompetitive tool for MSMEs

-- Design and Innovation Workshops for Business Competitiveness(2011 – 17 workshops - 509 SMEs)(2012 – 37 workshops – 3088 SMEs)

Spots:

Soacha, Santa Marta, Cúcuta, Girardot, Barranquilla, Pereira, Palmira, Manizales, Tunja, Villeta, Villavicencio, Cartagena, Neiva, Armenia, Bogotá, Tulua, Ibagué, Riohacha, Montería, Valledupar, Popayan, Cali, Bucaramanga, Cali, Palmira, Soacha, Barranquilla, Bogotá, Duitama, Bucaramanga, Villavicencio, Medellín, y Dosquebradas.

-- Manual of Design and Innovation in the development of MSMES

Knowledge Transfer in design (main deliverables)

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Viewing and promoting success stories in design (main deliverables)

-- Documentary Series Design Case Studies in Colombian MSMEs. Success through design

-- Sample Design in Colombia (link)

PNDI 2012

Public policies and strategic plan

-- Event – seminar 2011 about Public policies and design

-- Design consultancy for SMEs

Design consultancy for SME

Ministry of Trade, Industry, and TourismRepublic of Colombia

THANK YOU

J. Ricardo Mejia S.jrmejias@gmail.com

Offce for Micro, Small, Medium BusinessViceministry of Business Development