The Sequence of a PACA Exercise Jörg Meyer-Stamer www.mesopartner.com

What is the sequence of activities in a PACA? Prepa- ration: * Orga * Ad- vance info Hy- po- the- sis Wks Kick- off Wks Interviews Results- Workshop: Diagnosis + Proposals Pre- sen- tation event Way for- ward Wks Imple- mentation Mini-workshops Fieldwork (1-2 weeks) PACA-Exercise (2-3 weeks) PACA-Project

What is the sequence of activities in a PACA? Build-up Prepa- ration Organi- sation Prepa- ration: * Orga * Ad- vance info Hy- po- the- sis Wks Kick- off Wks Interviews Results- Workshop: Diagnosis + Proposals Pre- sen- tation event Way for- ward Wks Imple- mentation Mini-workshops Fieldwork (1-2 weeks) PACA-Exercise (2-3 weeks) PACA-Project

Somebody has to initiate the PACA: The PACA Host Government institution? Private sector institution (e.g. Chamber)? NGO? Stakeholder Forum? An organisation with credibility! The PACA Host motivates other stakeholders to support PACA creates a PACA team 1 - 2 external facilitators 3 - 5 local people who prepare the PACA (advance information, invitees for kick-off workshop, mini-workshops, interviews) organises the kick-off workshop coordinates the schedule for interviews and mini-workshops organises the presentation of results.

Organising a PACA Exercise (1) The proper way: 4 - 6 weeks in advance: identify PACA Host or contract PACA Facilitators define territory / focus 3 - 4 weeks in advance: select PACA Team plan details of organisation with PACA Host 1 - 2 weeks in advance: book venues invite people for kick-off, mini-workshops make appointments for interviews The frenzied way: Try to do all this in a few days Resources for organisation: 90 contacts * 2 phone calls * 10 minutes per call = 30 hours on the phone! plus marketing plus correspondence = a lot of time and effort!

Organising a PACA Exercise (2) Make sure that the right people invite the relevant stakeholders credible public sector actors to invite other public sector actors credible private sector actors to invite other private sector actors Use at least 3 of the six possible means of communication face-to-face phone letter fax e-mail SMS

Collect advance information Check available publications (research, articles in papers and journals) Check statistics Main sectors in the local economy: What are critical success factors in these sectors? What does “competitive advantage” in these sectors actually mean? What are their main competitors nationally and internationally? What is international good practice in promoting competitiveness in these sectors?

PACA-Exercise (2-3 weeks) Build-up Prepa- ration Organi- sation Hypo- theses Workshop Prepa- ration: * Orga * Ad- vance info Hy- po- the- sis Wks Kick- off Wks Interviews Results- Workshop: Diagnosis + Proposals Pre- sen- tation event Way for- ward Wks Imple- mentation Mini-workshops Fieldwork (1-2 weeks) PACA-Exercise (2-3 weeks) PACA-Project

The Hypotheses Workshop -- an internal event of the PACA Team Purpose: Get a shared understanding of the expectations in the PACA Team on PACA on the location on possible proposals Make implicit opinions and prejudice explicit Create a base of reference for the next steps of work Option: Turn the Hypotheses Workshop into a crash course for PACA team members Structure Presentation on PACA Mesocard exercise: clarification of open questions on PACA PACA Facilitators respond Mesocard exercises: What do we expect to be our findings? What may come out as proposals? Which LED activities are already going on?

PACA-Exercise (2-3 weeks) Hypo- theses Workshop Kick- off Workshop Prepa- ration: * Orga * Ad- vance info Hy- po- the- sis Wks Kick- off Wks Interviews Results- Workshop: Diagnosis + Proposals Pre- sen- tation event Way for- ward Wks Imple- mentation Mini-workshops Fieldwork (1-2 weeks) PACA-Exercise (2-3 weeks) PACA-Project

Kick-off workshop: Preparation Invite 20 - 40 participants: Representatives of business associations Representatives of local government Representatives of leading firms Representatives of support institutions Local leaders / connectors / mavens Local media Reserve adequate locality Prepare Mesocard materials

Kick-off workshop: Purpose Inform local stakeholders about the PACA Raise information about the local economy hard information participants’ perception / interpretation of local reality Motivate participants to support the PACA exercise arrange appointments for interviews persuade colleagues to be available for interviews

Kick-off workshop: Structure Presentation of key concepts the Diamond of Local Competitiveness optional: LED Participants write Mesocards four diamond corners -- strong & weak points competitive advantage of the region vocation in ten year’s time Discussion of cards / observations / questions Explanation of subsequent steps

The structure of the Diamond in the Kick-off Workshop Govern- ment Main sectors and companies in the local economy: What are the strong and weak points? Supporting institutions (factor conditions): * training, technology, finance, public util., infrastructure * location, land Strong + weak points Demand conditions: * Sophisticated demand * Unusual demand * Pioneering / innovative demand Strong + weak points Supporting industries (suppliers, subcon- tractors, service providers): Strong + weak points

What does the kickoff workshop look like?

PACA-Exercise (2-3 weeks) Kick- off Workshop Interviews Prepa- ration: * Orga * Ad- vance info Hy- po- the- sis Wks Kick- off Wks Interviews Results- Workshop: Diagnosis + Proposals Pre- sen- tation event Way for- ward Wks Imple- mentation Mini-workshops Fieldwork (1-2 weeks) PACA-Exercise (2-3 weeks) PACA-Project

Field work: Interviews identification of firms, institutions and individuals to be met during kick-off workshop, discussion with Chamber, local government, key informers structured interviews (“conversations”), usually with director/CEO/executive secretary, based on open questionnaire and qualitative methodology conducted by external and local members of PACA Team (2 - 3 persons) takes notes about observations, write minutes, formulate more hypotheses / reformulate hypotheses

What is an interview guideline (as opposed to a questionnaire)? Closed questions (yes/no, scoring) Precise wording of questions is paramount Fixed sequence of questions Guideline: Open questions Wording of question not defined ex-ante - depends on situation Interview dramaturgy depends on interviewee

What is the purpose and structure of the interview? To understand the internal structure of the company / institution To understand how it fits into the local economy To gather its perception of the local economy To assess its willingness to participate in a LED initiative To motivate it to participate in a LED initiative Structure (company interview): Intra-firm effort to improve competitive advantage Interaction with suppliers and subcontractors Interaction with customers Interaction with competitors Interaction with supporting institutions: training, R+D, information, finance, etc. Interaction with business association and Chamber Relationship with and percep-tion of local government

A good way to organize the interview: The Five Forces Plus Macro- framework Rules + regulations Supporting institutions: strong and weak points New entrants: How likely? Who? What advantage? Bargaining power of suppliers Rivalry: Who are competitors? Competitive advantage? Bargaining power of customers Threat of substitutive products (radical tech- nical change, change in consumer behavior)

Field work: Typical interview situations

PACA-Exercise (2-3 weeks) Interviews Prepa- ration: * Orga * Ad- vance info Hy- po- the- sis Wks Kick- off Wks Interviews Results- Workshop: Diagnosis + Proposals Pre- sen- tation event Way for- ward Wks Imple- mentation Mini-workshops Mini-workshops Fieldwork (1-2 weeks) PACA-Exercise (2-3 weeks) PACA-Project

Field work: Mini-workshops 5 - 15 persons with similar characteristics, e.g. same industry and company-size (e.g. small garment firms, small food processing firms) similar background (e.g. CEFE entrepreneurs, woman entrepreneurs, innovative firms) purpose: get information on the sector evaluation of performance of the sector Mesocard Structuring tools like Diamond, Five Forces Analysis, transaction matrix, SWOT, ... optional: first brainstorming on options for action

A format for a mini-workshop: An adaptation of the Diamond Govern- ment Competitive advantage and disadvantage of the sector What are the strong and weak points? Supporting institutions (factor conditions): * training, technology, finance, public util., infrastructure * location, land Strong + weak points Demand conditions: * Sophisticated demand * Unusual demand * Pioneering / innovative demand Strong + weak points Supporting industries (suppliers, subcon- tractors, service providers) Strong + weak points

Another format for a mini-workshop: The Five Forces Analysis New entrants: How likely? Who? What advantage? Bargaining power of suppliers Rivalry: Who are competitors? Competitive advantage? Bargaining power of customers Threat of substitutive products (radical tech- nical change, change in consumer behavior)

A variation of the Five Forces format to assess market power and barriers to entry New entrants: How likely? Who? What advantage? Bargaining power of suppliers Rivalry: Who are competitors? Competitive advantage? Bargaining power of customers Barriers to diversification: How easy to diversify? Barriers to entry in neighbouring markets?

Another format for a mini-workshop: Transaction matrix Benefits and costs/risks of co-operation between A and B (e.g. IT firms and universities) Cost + risk Benefit + advantage ... for A ... for B

When do we use which Mini-workshop format? Diamond Five Forces Transaction Matrix heterogeneous group focus at locational factors diversified landscape of supporting institutions homogeneous group of businesses few supporting institutions supporting institutions public sector

What does a mini-workshop look like?

A typical day during PACA fieldwork First interview at 8:00, takes longer than expected Arrive late for 9:30 interview (got lost in industrial park because instructions were inadequate) Arrive even later for 11:00 interview, conclude interview at 13:00, rush to venue for Miniworkshop No time for lunch, grab a sandwich on the way Conduct Miniworkshop at 14:00 -- some participants are late, the discussion is very lively, workshop takes longer than expected Arrive just in time for 17:00 PACA Team meeting Rush to dinner with key local informant at 19:00 Drop into bed, dead tired, at 22:00, realising that you didn’t have time to write up the interview minutes

Structure of a rushed PACA Exercise Day 1 Hypo- theses WS Lunch Kick-off Workshop Day 2 Mini-WS and / or interviews Fast food Team meeting Day 3 Mini-WS and / or interviews Sandwich Team meeting Day 4 Mini-WS and / or interviews Famine Interviews Day 5 Interviews Results work- shop Day 6 Elabo- ration of Presen- tation Event Way- Forward Workshop Team celebrates Morning Afternoon

Realistic structure of a PACA Exercise Monday Tuesday Wednesd Thursday Friday Saturday Hypo- theses WS Kick-off Workshop Interviews Mini-WS and / or interviews Mini-WS and / or interviews Mini-WS and / or interviews Mini-WS and / or interviews Week 1 Mini-WS and / or interviews Interviews Results work- shop Presen- tation Event Way- Forward Workshop Week 2

Venues for interviews and Mini-workshops Conduct interviews preferably on the site / at the office of the interviewee take a walk around the company / institution before or after the interview Conduct Mini-workshops at venues that are convenient for the participants, which may not the venues that are convenient for you at a time that is convenient for the participants.

Documentation of the PACA fieldwork Interview minutes brief (use template!) capture main insights, proposals, possibility of becoming a champion Miniworkshops put up the brownpaper with the cards in the central PACA Team venue photodocumentation PACAmate software (under development)

PACA-Exercise (2-3 weeks) Results Workshop Prepa- ration: * Orga * Ad- vance info Hy- po- the- sis Wks Kick- off Wks Interviews Results- Workshop: Diagnosis + Proposals Pre- sen- tation event Way for- ward Wks Imple- mentation Mini-workshops Mini-workshops Fieldwork (1-2 weeks) PACA-Exercise (2-3 weeks) PACA-Project

Results workshop, part 1 Internal exercise of the PACA Team: verification / falsification of hypotheses preparation of diagnostic (Mesocard) strong and weak points by industry / economic branch strong and weak points of supporting institutions, associations, local government prioritisation of observations (Pareto).

Results workshop, part 2 verify: what were the proposals which came up during the field work, i.e. in interviews and mini-workshops? what are further proposals the team can come up with? Pareto the proposals to sideline trivial or unrealistic proposals verify: which highly scored proposals meet the following criteria: realistic and viable apt for quick implementation potential for quick, visible effect

Having a closer look at the Three Criteria Realistic and viable can this proposal be implemented with the locally available resources? motivation, know-how, institutions, funds, ... Apt for quick implementation can you start planning for implementation next week? Potential for quick, visible effect can you expect a visible effect within three months? LOCA Team defines a score between 1 (=no) and 3 (=yes) for each criterion Multiply the three scores

Typical constellations regarding business sectors in the local economy: Where to start? Sector is doing well Sector is doing not so well Sector wants joint action to strengthen competitiveness Strategic Sector Desparate sector Sector does not want joint action to strengthen competitiveness Busy sector Hopeless sector

Management of expectations Do not create unrealistic expectations! do not formulate proposals which are unlikely to be implemented! don‘t promise activities which will overwhelm your capacity! don‘t promise that you will solve the local stakeholders‘ problems! don‘t give the impression that you come with a big bag of money! limit the number of proposals, and mention who will be in charge of them!

What it looks like in practice

PACA-Exercise (2-3 weeks) Results Workshop Presen- tation Event Prepa- ration: * Orga * Ad- vance info Hy- po- the- sis Wks Kick- off Wks Interviews Results- Workshop: Diagnosis + Proposals Pre- sen- tation event Way for- ward Wks Imple- mentation Mini-workshops Fieldwork (1-2 weeks) PACA-Exercise (2-3 weeks) PACA-Project

Structure of the Presentation Event Presentation of concepts, findings and proposals explain the concepts and the methodology used (Powerpoint) present the diagnostic (Powerpoint) present the proposals (Powerpoint Mesocard exercise with audience optional: additional activities with interested participants e.g. ask for volunteers to become project champions

What does the presentation look like?

Discussion of findings and proposals distribute cards and markers among the participants, explain the Mesocard rules (1 idea per card, write legibly) ask the participants to write down their observations, questions, criticism and proposals stick the cards to the wall, discuss them with the participants avoid opening an opportunity for local dignitaries to give speech!

Identifying Champions in the Presentation Event In the second part of the Presentation Event: invite participants to indicate their interest to champion specific activities to participate in specific activities invite volunteers to a Way-forward Workshop on the following day

Why “Presentation Event”? The format is different from a normal presentation admittedly, there is usually a Powerpoint presentation the Mesocard exercise breaks through the usual rituals Consider to give the presentation at an unusual location to make sure that participants don’t forget the event

What the Presentation Event looks like

PACA-Exercise (2-3 weeks) Presen- tation Event Way- forward Workshops Prepa- ration: * Orga * Ad- vance info Hy- po- the- sis Wks Kick- off Wks Interviews Results- Workshop: Diagnosis + Proposals Pre- sen- tation event Way for- ward Wks Imple- mentation Mini-workshops Fieldwork (1-2 weeks) PACA-Exercise (2-3 weeks) PACA-Project

Conducting a Way-forward Workshop (1) Option 1, with a small group: detailed discussion of implementation of a small number of proposals ask Pfeiffer’s Six Questions define responsibilities

Pfeiffer’s Six Questions For each proposal: How exactly are we going to do this? Who is taking responsibility? Who has to collaborate What are the resources we need? When do we start? How do we know that the activity started?

Conducting a Way-forward Workshop (2) Option 2, with a bigger group: clarify proposals initial discussion on how to implement define responsibilities and make appointments for subsequent meetings around each proposal

Two weeks later Organise a Champions’ Breakfast to signal commitment from your side to motivate Champions to connect Champions to assess progress to stimulate exchange of experience Turn Champions’ Breakfast into regular event

So what comes after PACA? Option 1: More PACAs to monitor, energise and re-focus ongoing activities to initiate more intense development activities in specific clusters or value-chains to constantly adjust an LED effort to new opportunities and necessities Generic LED, Reflexive LED Option 2: From PACA to local strategy PACA leads to alignment, sophistication and motivation of local players Players agree to formulate an explicit LED strategy

Conceptualizing PACA: LED as an iterative process Crisis of fragmentation Implementation Assessment Reflection Implementation Adjustment Planning for new action Assessment Reflection Adjustment Planning for new action Implementation Assessment Reflection Planning for quick implementation Rapid appraisal (PACA)

The learning cycle in PACA by doing Highlighting facts + percep- tions about the local economy Aligning information and perceptions Identifying opportunities for joint action

Implementation of quick-win catalytic projects plus continu- ation of quick- win activi- ties Implementation of next round of activities (including more complex inter- ventions) Presentation Event PACA Follow- up Work- shop Way- forward Fieldwork + Results Workshop Build-up Kick-off Targeted PACA- Exercises to opera- tionalise GENESIS Implementation of quick-win activities GENESIS Strategy Formulation

Using PACA to initiate a territorial development initiative Month Activities Lack of communication Distrust Effects Credibility Motivation Learning Trust Coordi- nation Ambition Competence Professio- nalisation Institutions Project management LED Forum LED Agency 1 6 12 18 24 30 quick-win projects more ambitious projects quick-win projects quick-win projects catalytic projects quick-win projects quick-win projects

Possible structure of a Two Year PACA Project January Implementation February Third appraisal Launch GENESIS Complete GENESIS Focussed PACA Exercise March April May June February Start build-up March First PACA Exercise April Implementation May June First appraisal July Implementation August Focussed PACA Exercise September October November Second appraisal December Implementation Fourth appraisal July August September October November December Fifth appraisal

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