13-14 October 2014
Plenary Session 2:
Capacity Building through
Technology & Knowledge Transfer
by Suresh D. deMel
Entrepreneur
Council Member – Small and Medium Industries, Employers Federation of Ceylon
Past President/Founder Member, Business for Peace Alliance
Past President/Founder Member, Association of Small and Medium Enterprises in Tourism
Director, Hambantota District Chamber of Commerce
Managing Director, Lanka Fishing Flies (Pvt) Ltd, Colombo, Hambantota, Ratnapura
Joint Managing Director, Game Fishing Sri Lanka (Pvt) Ltd
Group Director, Citrus Leisure PLC

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Types of SME’s in Sri Lanka
The dilemma of the informal SME
Types of Services Relevant to SME’s
Demand Side
Supply Side
Understanding SME’s
Service Needs of SME’s
Entrepreneurship Training
Business Development Services
Information Services
Conclusion:
A Case for Local, Indigenous, Institutional Capacity Building

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 Cumbersome to provide services to
 Not disciplined or regulated
 Encourages corruption
 Need tax and labor amnesty to become formal
 Grows organically
 Provides low quality products and services
 Fears Formalization

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Needs to reach out to be recognized and understood
Better Communication Skills (and Language)
Needs a Hand-up (not a Hand-out)
Donor dependency verses willingness to pay for
Services
Needs practical subject matter that matches their realities
“One size fits all” solutions don’t work!
Participatory approach/Learning by doing
Needs continuous support for improvement

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Understanding SME’s - “One size fits all” does not work!
Give a Hand-up (not a Hand-out)
Sustainable Business Model (not a Donor Model)
Work in collaboration with Indigenous Institutions (such as
Regional Chambers) that can continue the service support
Understand the SME
Develop services for which there is a demand from SME’s
Affordable Services - Develop services that SME’s feel they need it and for which they are prepared to pay
SME’s are more likely to pay for services which they perceive will bring recognizable benefits
Follow-up

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Size
Location
Sector
Type of product or service
The education of the owner
Managers’ skill levels
Labor base
Wealth
Networks
Customer base
Investment levels
Access to services

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Develop an Entrepreneurial Culture
▪ Being able to take calculated risks!
Communication Skills
Organizational Skills
Management Skills
Human Resource Development
Labor Relations
Marketing
Discipline
Start-up
Incubation
Acceleration

 Continuous Training and counseling
(some key needs):
 Communication skills
 Organizational skills
 Management skills
 Discipline
 Labor relations
 Marketing skills
 Customer relations
 Networking skills
 Research & Development Support

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Regulations & Structures
 Taxation
 Labor
 Sector
Market Information
 Trade Fair Exposure
Networking
Association / Chamber Membership
Industry Standards
Environmental & Social Sustainability Practices
Research & Development

 Sustainability & Effectiveness:
 Services provided directly or by a donor-funded project terminate with the project. Indigenous SME development organizations should be empowered to deliver benefits to
SME groups for a period of time after direct service or donor support comes to an end. Although significant
(donor) investment may be required to achieve this, a well equipped, sustainable, local organization will eventually serve larger numbers of SME’s than a short-lived project.
 An indigenous organization should have a better knowledge of the needs and demands of SME groups and should be able to develop more cost-effective, reliable and tangible services to meet them.