1. Presentation for Plenary Session 2:
National-level Efforts toward Infrastructure Development and Sustainable Industrialization
Edward Lorenz
University of Nice and
Member of University Côte d’Azur

2. Industrialization and development challenges in Africa
Participation in global value chains largely confined to upstream production (primary inputs) limiting scope for upgrading of indigenous firms
Shallow financial systems lacking the breadth to meet liquidity demand of a large share of enterprises
Weak and uneven development of infrastructure in transport, energy and communications
Need develop national education and training systems, increasing participation rates at the tertiary-level education and improving access of youth to high quality technical vocational education and training (TVET)

3. SMEs as sources of diversity and complementarity in industrialization
SMEs are a source of new ideas and they implement new products and services
They innovate by producing goods and services responding to unmet local needs, especially low income consumers.
SMEs are suppliers and subcontractors providing essential inputs and services for larger exporting firms
Successful SMEs grow and can gain a larger stake in the economy

4. SMEs and inclusive development
SMEs account for the majority of registered enterprises in Sub-Saharan Africa and for large share of new job creation over the last decade.
If the so-called ‘informal economy’ is included then the shares are substantially higher.
SMEs provide needed job opportunities for Africa’s youth in sectors as diverse as agro-industry, ICT, automotive components and chemicals and pharmaceuticals

5. Are SMEs innovative?
World Bank Enterprise Survey: Share of Enterprises Implementing Products that are New to the Firm over last 3 years
Small < 20 employees
Medium employees
Large > 99 employees
Nigeria (2013)
 53.3
 51.7
 57.8
Tanzania (2013)
 50.1
 50.5
 58.5
Uganda (2006)
 47.4
 63.9
 64.1

6. Problems of skills gaps
World Bank Enterprise Survey: Share of enterprises finding an Inadequately Trained Workforce is at least a Moderate Obstacle to Current Operations
Small < 20 employees
Medium employees
Large > 99 employees
Nigeria
28.1
35.2
30.5
Tanzania
56.5
52.3
 52.4
Uganda
31.2
37.3 
42.0
South Africa
11.2
25.2
33.4

7. Constraints on SME development
World Bank Enterprise Survey: Share of Enterprises that are Credit Constrained
Small < 20 employees
Medium employees
Large > 99 employees
Nigeria
 70.3
50.3 
 21.1
Tanzania
 72.1
51.1 
5.8 
Uganda
 57.3
40.4 
25.9
South Africa
 40.5
20.6 
9.9 

8. Africalics project on innovation and competence building in micro and small enterprises
The project explores how micro and small firms (< 50 employees) in four African countries organise work and acquire the knowledge & competences needed to improve their innovation capabilities
A unique design with surveys carried out both with employers/owners and with their employees
A focus on how skills are developed both through formal training and though on-going work experience
Types of equipment and technology used
Explore the role of linkages with customers, suppliers and external support institutions

9. Research team

10. Countries and Sectors studied

11. Survey methodology

12. First results: employer responses
A large share of SMEs introduced significant changes to their products and processes over a 3-year period. Depending on the sector, between 45 and 70%
A large share engage in regular annual up-dating of their equipment and machinery. Over 50% introduced new or improved equipment or machinery over the last 3 years.
The most common methods of competency building referred to were in-house training, interactions with clients and informal knowledge sharing with collegues

13. First results: Employee responses
Percent of employees reporting each work organisation trait
Learning and discretion in work: 
Problem-solving
75.2
Making use of one’s own ideas in work
89.9
Control over methods
69.2
Knowledge sharing and interactive learning:
Sharing information with supervisor
Sharing information with clients
84.9
Team or group work
84.1
Training and skills development:
On-the-job training
60.5
Employer provided training
28.1
Training off-the-job provided by an external provider
24.0
Number of employees
152

14. Constraints and challenges
Weak links to formal support organizations and institutions
Poor access to technical support and training providers: 68% of firms
Poor access to financial services: 82% of firms
Poor access to business planning services: 74% of firms
Lack of formal partnerships or alliances with other producers for joint technology development or marketing

15. Main policy conclusions
Best practice local system/cluster development policies could be used to good effect for SMEs
Platforms for joint development of common technologies that overcome disadvantages of small size and limited resources
Policies to link SMEs to universities and technical transfer institutes in knowledge-intensive business services (e.g. ICT, pharmaceuticals)
Policies to develop links between SMEs and upstream research institutes in agro-business

16. Main policy conclusions
Development of regional programs to support organization change and improve the provision of vocational and technical training in complex assembly industries (e.g. auto parts)
Incubators, accelerators and seed investment funds to promote start-ups and support young firms