UNIDO’s strategy has three phases:
- raising awareness on industrial and trade competitiveness;
- training public and private sector counterparts on industrial diagnosis and trade competitiveness analysis
- setting up an inter-institutional (or institutional) unit staffed by young professionals from key Ministries and private sector institutions.
Phase one:
A short seminar is organized to present international best practices in manufacturing – with an emphasis on sectors and products of relevance to the country concerned – and a preliminary assessment of the country’s industrial and trade strengths and weaknesses.
Phase two:
A group of young professionals from the counterpart institution/s is carefully selected for participation in a training course on UNIDO’s methodology for industrial diagnosis and trade competitiveness analysis. Where feasible, a national university is also included among the national counterparts. This intensive course is usually of two weeks’ duration and introduces the participants to the manipulation and processing of trade and industrial statistics, the formulation of competitiveness indicators and indices, the use of benchmarking exercises and the analysis and interpretation of results. At this stage, national policy objectives – such as poverty reduction – can be built into the assessment and emphasis placed on identifying and assessing the prospects and measures for value chain upgrading in sectors that can help alleviate poverty through employment generation and income distribution.
Phase three:
A dedicated unit is set up staffed by selected trainees from the course, probably in the Ministry of Industry or the Chamber of Industry. The Unit establishes comprehensive databases, monitors industrial trends and produces an Industrial Competitiveness Report, assessing the performance of the industrial sector. Sectoral analyses are produced and technical notes issued on specific issues affecting industrial competitiveness and trade prospects. Where a country is embarking on negotiations for regional or global trade agreements, statistical analysis done by the Unit can provide a valuable basis for the negotiating team. The Unit can also set up a database on Technical Barriers to Trade (TBT) and on other non-tariff measures impacting on industrial performance.
Another tool for competitiveness analysis is the production of data and explanatory texts on the cost of doing business in a country. This covers essential items such as the cost of services (water, energy, communications), the cost of and availability of land, sea, rail and air transport, the cost of labour, company registration, the tax regime, product certification and trade documentation. The information is made available on line and in printed form.
Analytical work and economic studies generated by UNIDO are important for two major groups of stakeholders in development:
- Governments, which acquire a strong factual basis for the design of their industrial and trade policies and for targeting support where the greatest potential returns to the national economy are to be found.
- Manufacturing enterprises, which have neither the time nor the resources for this essential analytical work which is also a public good and should be widely shared and disseminated.