SME development in international trade

SMEs are essential for a competitive and efficient market. Given the impact they have on economic growth, it is highly relevant to address these challenges in an efficient manner. They are an engine of growth, with great potential for the creation of new jobs and a major source of technological innovation and new products. Moreover, they are usually more labor-intensive than larger firms. In fact, in many cases they are the only source of employment in poor regions and remote areas where what income there is derives solely from self-employment.
SMEs worldwide share a number of challenges that one way or another impede or reduce their sustainability. Main challenges are other access to the funding and capital; access to international market information and business opportunities; training to strengthen the management and labor skills of SME employees; capacity-building in the creation of small business networks, associations and supply chains; the capacity to innovate, which is vital for the successful participation of any firm in global markets; the development and transfer of appropriate new technologies and research within regions; the development of rural SMEs; the outsourcing of services to developing countries; the creation of opportunities for gender equality and the employment of youth; the development of infrastructure through transport systems and other services that foster additional business initiatives; and interregional or so-called "South-South" trade.
We aim is to provide support in the above issues for the strengthening of SMEs in international trade through assistance to Governments, trade promotion organizations, institutions and trade associations. Our service offerings are described under the section ‘Services’.

Bio-trade

Bio- or organic trade is the purchase or selling of products that are produced in a whole farm management system where biology and balanced soils are developed to give sustainable yields without chemicals or forced growth. Organic farms aim to achieve a totally integrated production system where increased biodiversity and a balanced soil ecosystem encourage plant and animal health.
The world bio/organic market is experiencing a significant growth. The global market for organic food and drink was valued at USD 23.8 billion in 2002. It is anticipated that it will have a market value of approximately USD 115 billion this year. This has been due to a number of factors including:

•  Food safety scares, such as Mad Cow Disease, Dioxin levels and Chernobyl;
• Increasing awareness of health issues;
• Greater information and education;
• Genetically Modified Organisms;
• Environmental and animal-welfare issues.

Although production of organic crops is increasing globally, sales are concentrated in the more industrialized nations including North America and Western Europe. There are increasing interests in other regions. In particular, the developed markets of the European Union and Japan offer strong opportunities as growth in demand is currently outstripping supply. The North American organic food market represents the highest growth worldwide, estimated to have reached USD 12 billion in 2002.
Organic industry exports suggest that there is a trend towards more sophisticated marketing of organic products, with a decline in localized marketing and an increase in non-local and export sakes.
Taking into consideration that this is a relatively new industry sector, many challenges exist within the entire supply chain, exports and the bringing on the market of bio/organic products. Main hurdles are however:

• Change of mentality has to take place with a clear understanding of the benefits bio/organic trade brings to the different parties and where fierce competition exists from the more traditional, chemical sector;
• In a number of countries, the supply chain is undergoing or will undergo major changes with the coming of supermarkets. New balances of power are required whereby producers have to join together in associations that can cover their interests;
• Economic welfare expands, including in developing countries and people demand more and more quality products. In order to remain competitive, producers require to address this demand and use production methods that guarantee year around production with quality standards;
• With quality standards increasing as well as competition both at national and international level, certification of products is more and more becoming a must.
• Regulations on import restrictions are under constant change and new production methods are brought on the market in a fast path. It is crucial for producers and exporters to remain up-to-date and have good knowledge on the market.

We aim to promote and enhance the use of bio-trade through awareness raising activities, including the dissemination of information on this issue, and capacity development. Our service offerings are described under the section ‘Services’.

Tourism

International tourism receipts represented approximately 6% of worldwide exports of goods and services in 2003 compared with manufactured goods 60% and agricultural products 7%. Within the category of services export, the share of tourism exports increases to nearly 30%.
According to figures from the World Trade Organization and World Tourism Organization, the Asia-Pacific region showed the most important growth worldwide of 28%, corresponding to an additional 33 million international tourist arrivals in 2004 and yet another increase of 11 million in 2005. Prognostics for 2006 are that the Asia/Pacific region is going to be the fastest growing region in the world with a growth of 9%.
A large number of stakeholders are involved in tourism; including the private sector, national and regional tourism administrations, enterprises, business associations, NGOs, small and multinational tour operators and chains, the media, tourists and bodies of all kinds.
A number of issues were identified by the United Nations that are crucial for an equitable, responsible and sustainable tourism. A few of them are mentioned below:

• a mutual understanding and respect between host countries and tourists with regard to the dissemination and acceptance of social and cultural traditions, economic and political information relevant to tourists and practices and respect thereof, hospitality and an adequate level of protection;
• introduction of sustainable development for the benefit of future generations, the prevention of environmental disasters and the protection of natural heritage composed of ecosystems and biodiversity;
• bringing benefits to host countries and communities through, for instance, employment creation, improvement of skills and the raising of standards of living;
• the removal of administrative, legal and other entry barriers for SMEs in particular to access the tourism sector, and the re-investment of profits in the beneficiary countries or regions.

The development of tourism should be considered closely connected with economic growth and development. Tourism demand depends above all on the economic conditions in major generating markets. When economies grow, levels of disposable income will usually also rise. A relatively large part of discretionary income will typically be spent on tourism, in particular in the case of emerging economies. According to the World Tourism Organization's Tourism 2020 Vision forecast, international arrivals are expected to reach over 1.56 billion by the year 2020. The total tourist arrivals in East Asia and the Pacific will be 397 million.
We aim at promoting tourism through among others new tools while enhancing ecologic tourism. Our service offerings are described under the section ‘Services’.

Environment

Environmental issues, including pollution, are no longer a problem at local or country level but are considered trans-boundary. Loss of natural resources and land use; deforestation and desertification; extensive urbanization bringing along sanitary problems as well as diseases due to indoor and outdoor air and water pollution need to be addressed, not only on a country basis, but at international level with local impact.
Environmental development and equitable development through the means of trade, play an important role in sustainable environment. For instance, a growing potential is felt in the biotrade sector that clearly shows that the world trend aims towards a better and healthier future. This trend can also be found in the tourism sector where Ministries of Tourism, tourism boards, tour operators as well as hotels and tourists aim more and more for ecologic tourism and the conservation of natural heritages.
However, for many public and private sector parties this demands a change of mentality, taking risks and a fear of possible loss of revenue.
In all of these sectors, SMEs hold a principal position and therefore should be made well aware of new environmentally sound technologies, as well as their importance.
The private sector’s role is thereby important. Particularly as it can develop new approaches through innovative solutions in areas of supplying sanitation, fresh water, and clean, affordable energy. Awareness raising is the first step, followed by capacity development in environmentally sound technologies. Social and environmental responsibility is a growing trend within a large number of multinationals.
A number of activities can be undertaken for a better natural resources management and the use of environmentally sound technologies:

• a mutual understanding on the urgent need for sustainable environment through awareness raising activities;
• the publication of research studies undertaken;
• the promotion of environmentally sound technologies and their benefits towards SMEs who are the first ones to use these technologies;
• training on environmentally sound technologies.

We aim at contributing to a sustainable environment through awareness raising and capacity development activities. Our service offerings are described under the section ‘Services’.