COUNTRY MAPPING EXERCISE: GUYANA BASED ON CCFC WORKSHOP, JULY 9- 13, 2012 INSTITUTE OF CRITICAL THINKING, UWI, ST. AUGUSTINE, TRINIDAD AND TOBAGO Dianna DaSilva-Glasgow Social Science Research Seminar October 17, 2012
Dec 17, 2015
COUNTRY MAPPING EXERCISE: GUYANA
BASED ON CCFC WORKSHOP, JULY 9- 13, 2012INSTITUTE OF CRITICAL THINKING, UWI, ST. AUGUSTINE, TRINIDAD AND TOBAGO
Dianna DaSilva-Glasgow
Social Science Research SeminarOctober 17, 2012
WHAT ARE CLUSTERS?
“Clusters are geographically close groups of interconnected companies and associated institutions in a particular field, linked by common technologies and skills. They normally
exist within a geographic area where ease of communication, logistics and personal interaction is
possible. Clusters are normally concentrated in regions and sometimes in a single town”. (Michael Porter)
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WHAT ARE CLUSTERS?• Key aspects of Definition: • “Clusters are groups of independent companies and
associated institutions that are: • Collaborating and competing; • Geographically concentrated in one or several regions, even
though the cluster may have global extensions; • Specialised in a particular field, linked by common technologies
and skills; • Either science-based or traditional; • Clusters can be either institutionalised (they have a proper cluster
manager) or non-institutionalised.”
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Overview of Main Economic Sectors
• Agriculture; rice and sugar• Mining and quarrying; gold and diamond production• Manufacturing; food and beverages• Services; wholesale and retail distribution and
telecommunications
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BACKGROUND & FOCUS OF THE MAPPING EXERCISE
• The mapping process was mainly business oriented but with implications for policymaking and academic research. The focus of the exercise was informed by the following factors:
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BACKGROUND & FOCUS OF THE MAPPING EXERCISE
1. Attempts at clustering in Guyana through an initiative of the USAID, Guyana Trade and Investment Support Programme (USAID/GTIS) (fisheries and aquaculture) did not produce much result. Notwithstanding this experience clusters can work. It is therefore necessary to revisit and re-convince the private sector of the benefits and likely impact of clusters.
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BACKGROUND & FOCUS OF THE MAPPING EXERCISE
2. Supporting the identification of competitive, productive and profitable business opportunities in Guyana given that:
• Significant scope remains for enterprise development and investment.
• Need for diversification of the economic and productive base of the country consequent to several exogenous shocks such as the erosion of preferences for sugar, which has been an economic mainstay of Guyana for decades.
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OBJECTIVES• The exercise sought to identify clusters that can have the
following impact in the medium to long term:
i. support competitiveness and increased productivity
ii. increase employment and skills development in Guyana
iii. increase the export base of Guyana
iv. support the Diversification Programme and the Low Carbon Development Strategy of the Government of Guyana
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METHODOLOGICAL APPROACH FOR CLUSTER SCREENING IN GUYANA
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STEPS EXPECTED OUTPUT WORK PLAN DATA SOURCE
W1
W2
W3
W4
W5
W6
W7
W8
STEP 1:
Identification of businesses (operational) in Guyana
Excel database of names of businesses in Demerara-Mahaica; contact information (address, telephone, email), contact person, portfolio
Government Agency: Guyana Revenue Authority and Deeds Registry
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STEPS OUTPUT WORK PLAN DATA SOURCE
W1
W2
W3
W4
W5
W6
W7
W8
STEP 2: Definition of businesses i.Tax paying enterprises ii.Profit-driven iii.Involved in exportation
Excel database of names of legitimate businesses in Demerara-Mahaica
Government Agency: Guyana Revenue Authority and Deeds Registry
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STEPS OUTPUT WORK PLAN DATA SOURCE
W1 W2 W3 W4 W5 W6 W7 W8
STEP 3: Draft Analysis of the business characteristics The following characteristics were used:i.Size (Number of Employees & turnover (asset base as opposed to sales revenues)ii.Sector (Agriculture, Manufacturing, Services)iii.Activity (nature of business activity)iv.Output (specific products and services produced and customer segments)v.Clientele (Cross-sectoral relationships)
A.Summary of business characteristics in excel database with the following fields: size, sector, activity, output, research and development, clientele, corporate social responsibility
Government Agencies, Businesses: -Interviews, -Questionnaire,(email) Existing international databases; World Bank etc, FAO
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STEP 3: Draft Analysis of the business characteristics
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STEPS OUTPUT WORK PLAN DATA SOURCE
W1
W2
W3 W4 W5 W6 W7 W8
STEP 3B: Draft Analysis of the business characteristics Strategy) Value chain analysis (market relationships (non-product linkages of firms such as co-franchising, co-marketing, cross-licensing) and product relationships)
B. Value chain mapping of stakeholders related to the organization
Government Agencies, Businesses: -Interviews, -Questionnaire,(email) Existing international databases; World Bank etc, FAO
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STEPS EXPECTED OUTPUT WORK PLAN DATA SOURCE
W1
W2
W3
W4
W5
W6
W7
W8
STEP 4: Criteria for cluster Definition Standard criteria: i.Clear and common businessii.Complex value chainiii.Number of companies iv.Presence of support institutionsv.Geographical concentrationvi.Certain degree of specialization
Identification of potential clusters
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STEPS OUTPUT WORK PLAN DATA SOURCE
W1 W2
W3
W4
W5
W6
W7
W8
STEP 5: Criteria for cluster
selection: i. Potential for increased
exportsii. Can promote
infrastructural development
iii. Development of new or under-developed skills for labour
iv. Innovation potential (development of a new niche product/service)
v. Economic sustainability of the activity of the cluster based on five forces market analysis model
vi. Strong corporate and social responsibility
Cluster selection to be done
in tandem with third party.
Potential cluster initiative
International databases: UNCTAD, UNCOMTRADE etc. National databases: Bureau of Statistics, Bank of Guyana
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RESULTS
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Business Database• The total number of companies within Guyana= 8888,
5465 of which are listed as companies and 3423 as individuals.
• Four sectors are examined:
1.Jewellery Manufacturing;
2.Apparel, Textile and Garment;
3. IT-enabled services
4.Furniture Manufacturing• The number of companies examined under the four
sectors came up to about 704 or 8% of the total business population in the country
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Business Database
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Table 1: Breakdown of number of companies in business database by sector
Number of companies in business database by sector
Sector Number of Companies
Approximate Employment
Jewellery manufacturing 204 2,389 Furniture Manufacturing 377 5,670 Clothing, Apparel and Garment Manufacturing
36 2,024
IT enabled services 87 5,332 Total 704 15,415
Business Database• The activities of businesses were broadly defined based
on International Standard Industrial Classification (ISIC) codes revision 4.
• The size of businesses was defined as the number of employees based on the following criteria was used:
• A large company is a company with >100 employees• A medium company is a company with 21-100 employees• A small company is a company with 5-20 employees
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BUSINESS SEGMENTS: Furniture Manufacturing
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Natural Segments Rationale for Segmentation 1. Upholstered
furniture Upholstered furniture is wooden furniture that is covered with fabric.
2. Metal Furniture Metal furniture requires the use of steel and is used primarily for recreational purposes and the furnishing of Offices.
3. Wooden Furniture
Wooden furniture is primarily furniture made from hardwood. This requires greater interaction with the forestry/logging industry.
4. Cane Furniture This is a special type of furniture that utilizes vines and forest products such as Kufa, Nibbi and Tibisiri.
5. Wooden Builder’s Joinery/fixtures
This includes mainly wooden joinery products such as windows, doors, door handles that are used either in the construction industry or by furniture manufacturers.
6. Furniture of other materials
This includes furniture utilizing mainly materials such as Medium Density Fibre and plastic which are not sourced locally.
BUSINESS SEGMENTS: IT-Enabled Services
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Natural Segments Rationale for Segmentation 1. Business
Process Offshore Outsourcing Services
Back office offshore processing services use of IT to provide services related to internal business functions such as payroll, accounting and medical encryption. Front office offshore processing services are activities involving customer interaction such as customer-related services through inbound Call Centres and Public Relation Consultancy Firms.
2. Knowledge process outsourcing (KPO)
KPO services are services requiring skills support to businesses such as animation and design and research and development; business and market research; legal and medical services; training, consultancy.
3. Business Process Nearshore Services (Back Office)
There are some companies that provide business process outsourcing services to local firms only. These services typically entail managing email systems and web servers.
BUSINESS SEGMENTS: Textile, Apparel, Clothing and Garment
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Natural Segments Rationale for Segmentation Garment manufacturing Garment production refers to the production of various items of
clothing using varying textile materials including wool, leather etc.
Hand-painted textile Hand-painted textile differs from garment manufacturing by the additional feature of having garment painted by hand.
Footwear This industry is no longer export-oriented but serves the local market through special contracts with some companies. Footwear produced are mainly industrial for the Sugar industry and yattin-type for other companies.
Footwear of Leather and other indigenous materials
The segment includes manufacturers and distributors of hand-crafted footwear made of leather and other materials
BUSINESS SEGMENTS: Jewellery Manufacturing
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Natural Segments Rationale for Segmentation Hand-crafted gold jewellery
The segment describes jewellery that includes the use of gold and gem stones such as diamond. Hand-crafted jewellery is produced through the use of castings and moulds.
Machine-made gold jewellery
Machine made jewellery differs from hand-crafed gold jewellery as a result of the tools for production and the quality of the end product. Imported machines are used, as opposed to casting and moulds to fabricate jewellery.
Hand-crafted jewellery of other indigenous materials including rice grains and ‘buck’ beads
This type of jewellery utilizes indigenous materials such as rice grains, ‘buck’ beads, leather etc. It also requires hand-crafting and is done primarily by very small manufacturers.
VALUE CHAIN ANALYSIS: Hand-crafted gold jewellery
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Gold Mining Gold Board
(Government-
Owned)
Gold Dealers
& Traders
J ewelry
Fabrication
J ewelry Design
Distribution
J ewelry chain
retailers
Department
Stores
(costume
jewelry)
Importers
(Costume
J ewelry)
J ewelry
Specialist
stores
Non-store/non-
licensed traders Laboratory
preparatory
Services
Mining machinery
J ewelry Design
tools (moulds,
casting etc)
Research/ Training Institutes
- Gemological Institute of America
- World Wildlife Fund (WWF)
- Guyana Geology and Mines
Commission
- Guyana Gold and Diamond Miners
Association (GGDMA)
J ewelry Design
tools (moulds etc)
imported (US &
China)
Pawn shop
Gold Smiths
J ewelers
VALUE CHAIN ANALYSIS: Wooden furniture manufacturing
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Timber
harvesting/logging
Sawmilling/Lum
ber dealing
Furniture
Manufacturers
Distribution Wholesale to
Furniture stores
Retail Furniture
Stores
Export
Input Assembling and
Farication
Fasteners
Builder’s
Hardware
Welding
and
Fabricating
Woodworking
equipment and
supplies
Wood
treatment
(Kiln dryin)
Paints and
coatings
Glass
Welding
Equipment
and Supplies
Industrial
Equipment
and Supplies
Designing
Research/Training Institute
- Government Technical
Institute
- Guyana Industrial Training
Centre
- University of Guyana
- Guyana Forestry
Commission/ Forestry
Training Centre Inc.
- Iwokrama International
Centre for Rainforest
Conservation
- Conservation International
- Forest products
Association
- WWF
Builder’s
J oinery
International
Local
VALUE CHAIN ANALYSIS: Garment manufacturing
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Textile
(Overseas)
Design
Garment
Manufacturers
Distribution Wholesale
Export
Shipping
Fabrication
Sub-
contracted
small shops
Packaging Internation
al Brand
Garments
Special tailoring
(domestically)
Whole Domestic
Distribution
Spare parts
(Overseas)
Packaging
materials
(local)
Energy:
Electricity &
Fuel
Input Assembly
(Overseas)
Research/Training Institute
- Carnegie School of
Home Economics
- University of Guyana
- Government Technical
Institute
- International
Consultants
Sewing machines
(Overseas)
Cutting
based on
Design
Specs
Spare parts
(Local)
J oint Venture
(USA)
Raw materials
VALUE CHAIN ANALYSIS: BPO Services
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Overseas
businesses
design service
requirements
Package
designing
BPO Firms
Front Office Service:
Customer Support Input
assembly
Importation
of high end
equipment
Back Office
Services
Service is
launched
Research/Training Institute
- Companies themselves
- University of Guyana
- Other vocational
institutions offering
computer studies
Domestic Computer
Supplies and Services
Internet Service
Providers
Telecommunication
Services
Shipping
Companies
CLUSTER DEFINITION
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Business Segments Criteria Hand-crafted Gold
Jewelry Manufacturing
Wooden Furniture Manufacturing
Garment Manufacturing
Business process Outsourcing
1. Clear and common business
Criteria Satisfied
Criteria Satisfied
Criteria Satisfied
Criteria Satisfied
2. Complex value chain
Criteria not satisfied
Criteria Satisfied
Criteria Satisfied Criteria not Satisfied
3. Number of companies
Criteria satisfied
Criteria satisfied
Criteria satisfied
Criteria satisfied
4. Presence of support institutions
Criteria satisfied Criteria satisfied
Criteria satisfied
Criteria satisfied.
5. Geographical concentration
Criteria satisfied
Criteria satisfied
Criteria satisfied
Criteria satisfied
6. Certain degree of specialization
Criteria satisfied
Criteria satisfied
Criteria satisfied. Criteria satisfied.
% Satisfaction 83% 100% 100% 83%
FIVE FORCES MARKET ANALYSIS: Wooden Furniture Manufacturing
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Key barriers to entry include investment cost, standards and economies of scale
Balance of power is likely to lie with Buyers
Suppliers do not have much Power due to competition in the supply of inputs
Substitute goods include metal, nibbi, plastic and other furniture. Of these, metal furniture is the stronger substitute
Buyers Suppliers
Substitute Products
Industry Rivalry
Potential Entrants
FIVE FORCES MARKET ANALYSIS: Garment Manufacturing
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The ability to establish business relations overseas as well as standards are the key barriers to entry in this industry
The power of suppliers is likely to be weak due to small size of the local industry and therefore the volumes of textiles that may be purchased
Balance of power is likely to lie more with buyers
There are practically no effective substitutes for garment manufacturing, perhaps with the exception of fur
Potential Entrants
Buyers Suppliers
Substitute Products
Industry Rivalry
FIVE FORCES MARKET ANALYSIS: BPO Services
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Barriers to entry relate largely to the cost of telecommunications and being able to establish business relationships.
The power of suppliers is likely to be weak as there are many suppliers of computers and computer-related items
Balance of power is likely to lie with business consumer
The only possible substitute is self-provision by firms which is not feasible given the impact on cost efficiency and competitiveness
Potential Entrants
Buyers Suppliers
Substitute Products
Industry Rivalry
CLUSTER PRIORITIZATION AND SELECTION
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Criteria Key Factors Actual importance of the cluster-contribution
Contribution to GDP and exports Exports Contribution to employment Size Increased use of indigenous raw materials Existence of other factors of strategic comparative advantage
Development Potential Market trend analysis Innovation and Development of new products or services Potential of adoption of new technologies Need/opportunity to change
Potential challenges New Opportunities
Change Management Issues
Existence of relation among agents (sense of belonging) Existence of SMEs (main beneficiaries) Competitive situation
Government support for sector
CLUSTER PRIORITIZATION AND SELECTION
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Ranking Clusters Based on Cluster Criteria
Crtieria Garment Manufacturing
Wooden Furniture
Business Process Outsourcing
Actual importance of the cluster to the economy
3 5 5
Development Potential 3 3 5 Need/opportunity to change 4 5 4 Change Management Issues 4 4 3 Government Support for Sector 3 3 4 Total (Potential As a Cluster Initiative) (Highest possible total =30)
17 20 21
Ranking: 1 Very low 2. Low 3. Medium 4. High 5. Very High
Thank you
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