e-Biz: A New Approach To Building SME Competitiveness

A year ago, industry experts pronounced the Macedonia apparel industry – hundreds of small and medium enterprises (SMEs) and a major source of jobs – virtually dead in five years. Today, these same experts have credited the USAID Macedonia e-BIZ Project with breathing new life into the industry, and potentially saving and/or generating thousands of jobs over the next few years. The e-BIZ Project is providing similar lifeline to other SMEs. Through strategic use of “high impact” ICTs, e-BIZ offers a powerful new approach to strengthening SME competitiveness, producing concrete results for SMEs’ bottom line, while achieving industry-wide scope.

Customer Response

Like development agencies in many countries, USAID/Macedonia has made SME strengthening a top priority in its economic growth program. ICTs are key to SMEs’ ability to compete in international markets. Yet standard approaches – creating telecenters that provide access to ICT applications – havebeen less than a resounding success. The USAIDe-BIZ Project’s new approach has broken new ground, drawn commendation from industry experts, demonstrated success with SME customers, and is poised to have a significant impact on the competitiveness of entire industries.

The data are impressive. A recent survey (conducted by independent surveyors contracted by the project) sought to determine whether e-BIZCentercustomers found that the e-BIZCenter services “strengthenedtheir business” and if so, how. Recognizing that the Centers were only months old, project managers hoped that 25% of customers would report that ane-BIZCenter’s service had already strengthened their business.

The results weresurprising -- and exciting. More than 60% of 206 respondents reported that the Centers’ services had strengthened their businesses in just those few months! Three of the five centers received an even more resounding response: 78% - 93% of customers reported that the Center’s services had strengthened their businesses. Equally important, the respondents stated how their company grew stronger (e.g., customer service, sales, better quality mfg, etc.), demonstrating that the respondents knew exactly what type of improvement they had experienced.

It was a rare testimonial. How many telecenters or economic growth projects would draw this kind of response if an independent surveyor asked customers whether and how thetelecenter/project actually strengthened their business? Few, indeed.

The e-BIZ Approach

The e-BIZ approach has fourmajor steps:

1.Start with demand. The approach begins with a rapid SWOT analysis of key industries to identify the strategic opportunities and obstacles facing the SMEs.

2.Identify "high impact" ICT applications. Experts identify ICT applications that will quickly and significantly help SMEs improve their competitiveness. If the impact will not be quick (within two years) and significant, the ICT applications do not qualify as “high impact.”

3.Partner with local entrepreneurs/companies, on the basis of a viable business plan. The approach selects and co-invests with local partners – entrepreneurs, companies or consortia – to create e-Biz Centers based on solid business plans with viable revenue models.Local partners make a financial investment in the Centers, strengthening commitment and sustainability.

4.Develop the capacity of the e-Biz Centers.International expertise and links with international business networks build the capacity of the e-Biz Centers to strengthen their customers’ competitiveness.

The e-BIZ Centers

The e-BIZ project in Macedoniaidentified ten opportunities to create Centers with high impact ICT applications. From these, it selected five business-based e-BIZ Centers. Each offers SMEs“high impact,” high value-added ICT services, operates with a well-conceived business plan, and was established with co-investment from a company or consortium. In addition, the project created e-BIZ centers at two universities, offering ICT services to local SMEs while providing hands-on ICT-for-business opportunities for students – again with a practical business plan.

Thee-BIZ Centers:

•National Tourism Portal–Tourism has considerable potential in Macedonia, a country with great natural beauty and unique cultural and historical attractions. Yet “outbound travel” dominates Macedonian travel companies’ business and in-bound tourism is very limited. As tourism-related companies seek to attract international tourists, the National Tourism Portal is essential to their growth. The Portal’s impact is projected to foster 30%/year growth of international tourism into Macedonia.

•ApparelTechnologyCenter–The apparel industry of small and medium enterprises was in rapid decline when the ApparelTechnologye-BIZCenter began offering CAD/CAM and other ICT-based services. The Center enables these companies to compete in a new, higher value-added “rapid response” market. An expert in the apparel industry has called this e-BIZCenter a "crucial contribution" to saving this industry, and said the Center will make a "quantum difference" that could save 5,000 jobs in the next couple of years.

•FootwearTechnologyCenter - The Macedoniashoe manufacturing industry currently sells high quality products at very low cost. The FootwearTechnologyCenteroffers CAD/CAM and other ICT-based services that enable the industry to design, produce and sell higher-margin products, and help generate up to 5,000 high value-added jobs in the next couple of years. It is also helping to attract at least $2 million in foreign direct investment.

•Online ManagementTrainingCenter - According to the National Entrepreneurial and Competitiveness Council, improved management skills are essential to Macedonia’s economic growth. The OnlineManagementTraininge-BIZCenter offershigh quality management training to SMEs across Macedonia, e.g., with Internet-based training and videoconferencing that "brings in" trainers from the world's top business training institutions.

•Fashion Industry e-Commerce Center - Provides e-commerce solutions to create strong capacity in sales, marketing, freight consolidation and sourcing consolidation for the fashion industry, including apparel, shoes, and others.

•Java Lab– Provides Macedonian tool and diefirms with new opportunities to compete in the international market, while offering students from SkopjeUniversity hands-on experience in advanced ICT engineering applications.

•SEEUBusinessServicesCenter- Based at the SoutheasternEuropeanUniversity, the Center provides internship opportunities for students, consulting opportunities for faculty, and fee-based ICT-related services to price-sensitive local companies.

For further information, see for the project’s website.

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