Financial Times

Opportunities everywhere - but not for the faint hearted
By Nilooka Dissanayake
Our article last week, Business Development Services: A case of the blind leading the blind resulted in some interesting responses from both small businesses and service providers of all stripes and sizes. It also raised some eyebrows in the government sector.

Let us today get acquainted with Mark Van Steenwyk, Executive Director of the Business Services Support Facility (BSSF) which operates under the SME Sector Development Programme of the new Ministry of Small and Medium Enterprise Development (MSMED). He is the man right in the centre of organizing the business development services BDS sector in Sri Lanka.

I initially met Mark last year when he took over this post as a consultant through the Asian Development Bank (ADB), the funding agency for the project. Although still very new to the post, he was fired up with enthusiasm, the element needed to jumpstart and drive a challenging project of this nature. He also had some pet theories and systems that he had developed and applied with success over the long career that he wanted to implement in Sri Lanka.

BSSF has made much progress since that time. It has already established the six regional Business Development Centres (BDCs) that was on the project agenda with private sector participation. At the BDS Conference 2004, BSSF announced the Matching Grant Programme that will be a boon to BDS operators seeking to strengthen their capacity with a view to expanding scope of their services.

We asked Mark about his views on the BDS sector of Sri Lanka, the progress of BSSF activities the Matching Grant opportunities that may help some of our BDS providing readers. All this, is anyway good news to the small business operators.

FT: Why do we need to organize the BDS sector (at all)?
"In Sri Lanka we have a very imbalanced distribution of BDS. Two-thirds of BDS providers are located in the Western Region and cater to the geographically concentrated SME and large-scale business community. In order to accelerate balanced SME sector growth in other parts of the country attention must be given to BDS capacity-building for local business service providers.

That is not to say that Western Region BDS providers cannot provide business services to emerging business growth opportunities in other parts of the country. But many will find it difficult to adjust to the economies of scale and cultural differentiation found outside of the capital region.

It is not so much a need to organize the BDS sector as it is to identify its strengths and weaknesses in the context of region sectoral business expansion opportunities. Once we know, from a regional perspective, which business sectors have the greatest potential for growth, we will know better where gaps in BDS delivery are likely to occur. With that knowledge we will be better equipped to strengthen local BDS capacity and, at the same time, develop effective BDS network linkages. That is what our private sector partners are trying to do through the recently established regional business development centre (BDC) network, which we in government are supporting."

FT: Do you feel that it is possible to adopt a grading system or accreditation system to the BDS sector considering the fact that it is highly segregated and covers a very large area subject wise?
"The BDS market is as diverse as the SME sector it seeks to serve. Developing an accreditation system for BDS providers is an insurmountable task if we consider the vast range of services required by the business community.

However, developing business services industry standards and an accreditation system makes sense when we consider strategic BDS such as technology sourcing or transfer and market analysis and development. It also makes sense for certain types of specialised services such as legal, accounting, tax, export trade, engineering and business management training. Under the BSSF programme we are committed to seeing some progress made in this area of accreditation, particularly as it applies to strategic and specialized BDS which link business services providers financial institutions extending credit to the SME sector."

FT: Has BDS accreditation been done elsewhere in the world?
"Some countries in the Asia region such as Singapore, Thailand, Japan and Australia have made considerable progress with respect to establishing business services industry standards. In North America, Canada has accomplished much in this respect, particularly with BDS providers serving the SME sector."

FT: How do you expect BDS providers to respond to the BSSF Matching Grants?
"It is still too early for us to know how the BDS providers will respond to our matching grant programme. We expect that there will be a lot of interest in the areas of technology transfer, information technology (IT), domestic and international market development, new business services product development, BDS marketing and skills development in the area of business management and entrepreneurship training."

FT: How has the initial response been in other countries? What areas have been popular?
"The BDS market has become very sophisticated and specialised in many western countries, relying on IT and other web-based technologies to reduce cost and offer time-sensitive services to business customers. However, value for cost continues to be a time honored business principle when making a decision whether or not to chose an outside BDS provider. In Southeast and South Asia many countries, such as Indonesia, the Philippines, Bangladesh and Sri Lanka are still grappling with underdeveloped rural economies, which pose both high risk and high opportunity for BDS providers and business entrepreneurs alike.

Whether BDS provider or entrepreneur, tackling the challenge of doing business in weaker economic markets is not a job for the faint hearted. Both groups must understand each other and work together to accomplish their common goal. Innovation, patience and dedication are the common attributes of long-term success."

FT: In developing BDSs is your focus on volume or quality?
We, in the MSMED are not big believers in grant programmes. BSSF looks at its matching grant programme as a tool to facilitate accelerated expansion of the SME sector by filling gaps which unfortunately exist in the BDS market.

We are far more concerned with quality and innovation as it relates to uses of our matching grant funds than with achieving grant targets. We believe in supporting private-sector-led efforts which model best practices in BDS market development.

Effective networking among a select group of quality BDS providers can set an important example for the BDS industry. That is why we have chosen to support the BDS facilitator efforts of the six regional business centres, and their collaborating BDS partners that comprise the BDC network.

Our job in government is not to lead, but to enable, challenge and support the private sector by creating the proper policy environment wherein the BDS market and the SME sector can effectively work and grow together toward attaining the common goal of national economic development. We will use our matching grants in a manner consistent with achieving this objective."

Dear readers, don't you find that to be good news? If any BDS providers among you wish to obtain further information on BSSF, email us your request on the usual email address. We also invite you to tell us your ideas on how business development service can improve to serve you, the entrepreneur, better. You can contact us on ft@sundaytimes.wnl.lk or on 5-552524.

The writer is the Managing Editor of Athwela Vyaparika Sangarawa (Athwela Business Journal), the only Sinhala management monthly targeting the small and medium enterprises and its English version, Small Business International magazine and www.smallbusiness.lk, the bilingual small business website.

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