Enhancing competitiveness and opening up access to international markets
UNCTAD’s Business Linkages Programme is aimed at facilitating the creation of new linkages, and deepening existing relationships between foreign companies’ affiliates and domestic small and medium-sized enterprises in developing countries, thereby making them more sustainable.
The Programme is built on the mutual self interests of all actors.
On the one hand, business linkages are potentially one of the fastest and most effective ways of upgrading domestic enterprises, enhancing their competitiveness and allowing them to access international markets, finance, technology, management skills and specialized knowledge.
On the other, by entering into partnerships with local firms, Multi-National Enterprises (MNEs) may reduce transaction and factor costs, increase their flexibility, and adapt technologies and products better and faster to local conditions.
Thus MNEs and domestic firms, as well as the economy in which they are forged, can directly benefit from the programme.
Features: Working locally
UNCTAD assists host countries that make a request for the development of national programmes for MNE-SME linkages. To achieve this, UNCTAD works with local development agencies and business service providers, foreign affiliates of MNEs, partner ministries and other stakeholders.
Seven country programmes have been implemented in Argentina, Benin, Brazil, Mozambique, Peru, Tanzania, Uganda and Zambia.
Furthermore, Empretec centres that run UNCTAD's entrepreneurship development programme are increasingly incorporating business linkages in their services portfolio.
It is normal practice for the business linkages team to work closely with the purchasing companies, in conjunction with private sector organizations (trade associations, industry federations, etc). Only those companies that meet the requirements or demonstrate a willingness to develop are selected to participate in the linkage programme. A careful selection of potential suppliers is essential to gaining the confidence and participation of the large purchasing companies.
Objectives: Expanding relationships
UNCTAD’s Business Linkages Programme improves the performance, productivity and efficiency of local suppliers through training, mentoring, information exchange, quality improvements, innovation and technology transfer.
UNCTAD also assists developing countries’ governments and other stakeholders to build the enabling policy environment, and supports networks of business development and other service providers, based on the analysis of international experience and best practices.
MNEs, on their side, are increasingly concentrating on their core operations and outsourcing those in which they do not have a competitive advantage. Thus, they have a strategic interest in developing the competences of local suppliers, and are expected to take part in cost–sharing with a view to the operational sustainability of the programme.