Transcript Slide 1

Business Development and SME Support
Services in Brazil: the role of SEBRAE
Vinicius Lages
Institutional Framework and Major Programmes for
SME Development in South Africa, Brazil and India
Third Tri-nations Summit for Small Business Development
New Delhi, November 18-22, 2008
Presentation Plan
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Challenges in designing institutional and police
framework for SMEs support
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SMEs support in Brazil: institutional framework
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SEBRAE´s role in SMEs support
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Q&A
Major challenges
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Recognizing the importance of SMEs
The concept: defining SMEs
Defining appropriate policies, programs and
instruments
Establishing a sustainable police and institutional
framework
Designing a police and institutional system
Facilitating access to business development services
Advocacy planning – ‘voicing the voiceless‘
The importance of SMEs
• There is an established yet growing
recognition of the importance of small,
and micro enterprises (SMEs) in
sustained national economic growth.
• In Latin America, SMEs comprise around
70 million units and are considered one of
the most significant sources of employment
and income across the region. In most countries the private sector is
almost entirely comprised of micro and small enterprises.
• Given their importance, however, there exists little systematic research
in the area of SMEs and the programs and policies to support them. As a
result, scale-based enterprise promotion is often driven by social and
political considerations rather than by comprehensive economic analysis.
The concept: defining SMEs
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Why it is so important? Policies designing and evaluation
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To understand the SME sector and create policies accordingly,
countries must implement regular data collection schedules.
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Our Tri-nations Program initiatives should include:
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An inventory of data currently collected in the 3 countries
Creation of comparable SME definitions (where possible,
standardized definitions)
Regular data analysis vis-à-vis the dynamics of our economies
Most common SMEs definition are
based on the:
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Number of employees
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Growth revenues (annual)
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productive assets (capital assets)
In our case…
criteria for SME’s classification
according to gross annual revenue
According to General Law of SME’s (14/12/2006):
• Micro: up to R$ 240 mil per year
- U$ 110.000,
• Small: from R$ 240 mil up to R$ 2,4 million per year - U$ 1.1
million
But some institutions use other criteria for SME’s
classification
Classification according
employees
Size
to
the
number
of
Sectores
Industry
Commerce and
Services
Micro
Up to 19 employees
Up to 09 employees
Small
From 20 to 99 employees
From 10 to 49 emplyees
Medium
From 100 to 499 employees
From 50 to 99 employees
Big
More than 500 employees
More than 100 emplyees
Brazil
•Population: 191,6 millions
•GDP (current US$) 1,2 billions
•Agriculture (value added) - 5% GDP
•Industry (value added) - 31% GDP
•Services (value added) - 64% GDP
Context of SMEs in Brazil
5 million of formal enterprises (99%) and 10 million
of informal enterprises
56,1% of the formal urban labor force
26% of the aggregate wage/salaries
20% of Brazilian Gross Domestic Product
13% of government supply
2,4 % of Brazilian exports
A land of entrepreneurs
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GEM 2007 – Global Entrepreneurship
Monitor
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Brazil ranked 9th position
Growing entrepreneurship based in
opportunity evaluation (less by need or lack
of alternative)
Growing entrepreneurship among women
Until recent, favorable
economic conditions
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Reached the investment grade – less risk
Low inflation rate
US$ 206 billion - foreign currency reserves
Economic growth rate of 5,7 % (2007)
Economic and social programs dedicated to
poverty alleviation and promotion of equity
Growing income of BoP (base of pyramid)
Foreign direct investments US$ 30 billion in
2007
Public and private investments- PAC Program
But, challenges ahead
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Credit crunch – increase the rigour of risk
analysis – raise the need for collaterals
economic growth – real economy and its
market impacts
Slow down of private and public investment
Consumption
Protectionism
Development of SMEs
Designing a enabling environment for business
Fair competition
Higher competitiviness
Formalization of SMEs
Low cost of
formalization
SEBRAE
supports
Opportunity driven
entrepreteurship
Longevity of SMEs
Policy Integration
Brazilian Micro and Small Business Support Service
Mission
To promote competitiveness and sustainable
development of micro and small enterprises and
foster enterpreneurship
SEBRAE was originally a governmental
institution, created in 1972 linked to Planning
Secretary of Republic’s Presidency with the name
of CEBRAE. Afterwards, it was transferred to
Ministry of Industry and Commerce
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• In 1990, it was transformed into SEBRAE, a
private non profit autonomous social service, with
a funding originated from a tax contribution of
0,3% over enterprises payroll.
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27 units in all Brazilian states and Federal District (Brasília)
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Budget 2008: US$ 1,2 billion
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788 service centers (of which 452 in partnership with other institutions)
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4.457 direct employees and 9.283 external consultants
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4.462 partners from public and private sectors, NGO’s, and international
ones involved in projects supported by SEBRAE
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Presence in more than 2000 municipalities
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Around 200 clusters supported by long term projetcs
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377 Enterprise Incubators
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Around 11 millions of consulting services delivered - 2007
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252.000 participants in distance learning courses - 2007
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Portfolio of more than 2 thousand projects of entrepreneurial
development – for 1 real (R$) invested, 2,6 reais are mobilized;
Governing Board
National Council
13 members
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MDIC- Ministry of Development, Industry and Trade
ABDE- Brazilian Association of Financial Institutions for Development
CNI- National Industry Confederation
CNA- National Agriculture Confederation
CNC – National Commerce Confederation
CACB- Commerce and Enterpreneurial Associations Confederation of
Brasil.
ANPROTEC- National Assoc of Support Institutions for High Tech
Enterprises
ANPEI - National Assoc for Research and Engineering of Innovative
Enterprises
BB – Bank of Brasil
CEF- Caixa Economica Federal
ABASE – Brazilian Assoc of State SEBRAE’s
FINEP- Funding Agency for Studies and Projects
BNDES - Economic and Social Development National Bank
 Implements activities in areas such as:
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training programs (management)
encouraging a more dynamic start-up market;
encouraging business development in
disadvantaged communities and underrepresented groups.
facilitating market access,
fostering entrepreneurship
facilitating access to technology,
innovation support,
facilitating access to financial services;
 Acts in building of
business environment
a
more
favorable
fostering better regulation and policies; i.e.
General Law of SME’s, Innovation Law,
government
procurement
scheme,
credit
guarantee societies
Modes of Assistance
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Individual - centers of assistance, mobile
assistance, web, radio, TV, call centers, videos, CDs,
DVD, etc.
Group - projects dedicated to group assistance
regarding over 2.000 municipalities, 200 clusters,
and 370 business incubators.
These approaches consider sectors, clusters and
territories as the contexts in which SMEs are
involved
Key- factors: governance among clusters,
coordination, intangible actives (culture, history,
reputation, trade marks), infrastructure, logistics,
services, knowledge, sharing of best practices,
commercial and productive integration).
Segmentation
Individual Assistance
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- life cycle
Potential entrepreneurs
Start-ups and companies: 0 to 2 years
Companies: over 2 years
Segmentation
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Group Assistance
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Clusters
Groups of companies
Associations
Cooperatives
Networks
Franchisees
Suppliers
Trade associations
Result oriented strategy
SIGEOR
Integrated Intervention Strategy
Business
Individual
and group
assistance
Management
Business
Organization
Cooperation
Culture
Results
Technology
and
Innovation
Access to
financial Services
Market
Access
http://www.sigeor.sebrae.com.br
conclusion
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SME concept
Policy framework
Institution framework – network
Instruments – business services
Voicing the voiceless