Business Development and SME Support Services in Brazil: the role of SEBRAE Vinicius Lages
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Transcript of Business Development and SME Support Services in Brazil: the role of SEBRAE Vinicius Lages
Business Development and SME Support Services in Brazil: the role of SEBRAE
Vinicius LagesVinicius Lages
Business Development and SME Support Services in Brazil: the role of SEBRAE
Vinicius LagesVinicius Lages
Third Tri-nations Summit for Small Business Development New Delhi, November 18-22, 2008
Institutional Framework and Major Programmes for SME Development in South Africa, Brazil and India
Presentation Plan
Challenges in designing institutional and police framework for SMEs support
SMEs support in Brazil: institutional framework
SEBRAE´s role in SMEs support
Q&A
Major challenges
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• Why it is so important? Policies designing and evaluation
• To understand the SME sector and create policies accordingly, countries must implement regular data collection schedules.
• Our Tri-nations Program initiatives should include:
• 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:
Number of employees
Growth revenues (annual)
productive assets (capital assets)
according to gross annual revenue
In our case…
criteria for SME’s classification
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
Classification according to the number of employees
But some institutions use other criteria for SME’s classification
Size 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$) 1,2 billions
•Agriculture (value added) - 5% GDP
•Industry (value added) - 31% GDP
•Services (value added) - 64% GDP
Context of SMEs in Brazil
5 million of formal enterprises (99%) and 10 million of informal enterprises
56,1% of the formal urban labor force
26% of the aggregate wage/salaries
20% of Brazilian Gross Domestic Product
13% of government supply
2,4 % of Brazilian exports
A land of entrepreneurs
GEM 2007 – Global Entrepreneurship Monitor
Brazil ranked 9th position Growing entrepreneurship based in
opportunity evaluation (less by need or lack of alternative)
Growing entrepreneurship among women
Until recent, favorable economic conditions
Reached the investment grade – less risk Low inflation rate US$ 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
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
SEBRAE supports
Formalization of SMEsFair competition
Low cost of formalization
Longevity of SMEs
Higher competitiviness
Opportunity driven entrepreteurship
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
• 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.
27 units in all Brazilian states and Federal District (Brasília)
Budget 2008: US$ 1,2 billion
788 service centers (of which 452 in partnership with other institutions)
4.457 direct employees and 9.283 external consultants
4.462 partners from public and private sectors, NGO’s, and international ones involved in projects supported by SEBRAE
Presence in more than 2000 municipalities
Around 200 clusters supported by long term projetcs
377 Enterprise Incubators
Around 11 millions of consulting services delivered - 2007
252.000 participants in distance learning courses - 2007
Portfolio of more than 2 thousand projects of entrepreneurial development – for 1 real (R$) invested, 2,6 reais are mobilized;
Governing Board
National Council13 members
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:
training programs (management) encouraging a more dynamic start-up market; encouraging business development in disadvantaged communities and under- represented groups. facilitating market access, fostering entrepreneurship facilitating access to technology, innovation support, facilitating access to financial services;
Acts in building of a more favorable business environment
fostering better regulation and policies; i.e. General Law of SME’s, Innovation Law, government procurement scheme, credit guarantee societies
Modes of Assistance 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, over 2.000 municipalities, 200 clusters, and 370 business incubators.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 - life cycle
Potential entrepreneurs Start-ups and companies: 0 to 2 years Companies: over 2 years
Segmentation
Group Assistance Clusters Groups of companies Associations Cooperatives Networks Franchisees Suppliers Trade associations
Result oriented strategy
SIGEOR
Integrated Intervention Strategy
Technology and
Innovation
Market
Access
Access to financial Services
Individual and group assistance
Business Organization
Business
Management
Cooperation Culture
ResultsResults
http://www.sigeor.sebrae.com.br
conclusion
SME concept Policy framework Institution framework – network Instruments – business services Voicing the voiceless