Supply-Side Issues in the Development of Bds in Zambia

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Supply-side Issues in the Development of BDS Markets in Zambia By Christian Chileshe, 20101 1. Introduction This document discusses key areas of concerns that have been identified around Business Development Services (BDS) supply-side issues affecting market development in the Zambian context, and also goes further to provide some thoughts on how the concerns could be addressed. Though properly functioning markets are typically demand-driven, it is important that the supply side is in a position to respond to such demand. It is also often the case that demand does need to be stimulated. It is again incumbent upon the supply side to be able to play its part even in this scenario. The document will discuss concerns around supply-side issues under two main categories: i. ii. Structural issues – looking at macro issues relating to the economy, policy and regulation and their effect on BDS market development. Organisational issues – this considers more than just issues at individual BDS provider level, but includes concerns around how they have collectively positioned themselves to supply BDS.

An important cross-cutting issue will be around prevailing mind-sets and how this has been a major obstacle to supply-side development in the BDS market. The document starts with a brief outline of the BDS market before looking at concerns regarding specific supply-side issues under the two categories stated above. 2. The Business Development Services (BDS) Market The illustration below provides a visual representation of the BDS market and some main categories of players involved. The Business Development Services (BDS) Market

Regulators & Policy Developers Micro, Small & Medium Enterprises (MSMEs)

BDS Providers

BDS Facilitators

Providers of Goods & Services to MSMEs

1

This essay was submitted in partial fulfillment of the requirements of a course module for a Diploma in BDS under the ILO’s International Training Centre, Turin.

“Business Development Services (BDS) comprise a wide range of non-financial services provided by public and private suppliers (BDS providers) to entrepreneurs who use them to efficiently operate and make their businesses grow” (GAGEL, D 2006) Ideally, the types of BDS being offered (supply) should be informed by the demand articulated by the various enterprises (existing and would-be MSMEs) in a particular economy. According to Gagel, typical types of BDS services could be categorised as follows: i. Market access services – this would include facilitating access to market information, establishment of market linkages and other support to expose entrepreneurs and their offerings Input supply services – facilitating firm linkages with providers of inputs. Technology and product development services – facilitating the development and utilization of appropriate and enterprise-enhancing technologies Training and technical assistance – skills development and experience sharing Infrastructure-related and information services – provision of facilities needed by enterprises Policy and advocacy – facilitating active engagement of entrepreneurs in addressing issues affecting them and their operations Access to finance – support to enterprises in their quest for appropriate financial services

ii. iii. iv. v. vi. vii.

3. Structural Issues Affecting the Supply of Business Development Services This section presents some issues that have affected the supply side in the development of BDS in Zambia. 3.1 Historical Issues – Post-independence Socio-economic Policies Zambia has a socialist history that emphasised state control of key resources and means of production. It is not until the early 1990s that private sector participation in the economy became a prominent part of government policy. Since then, policy makers have had the challenge of trying to arrive at what may be the best combination of policies that would achieve the already agreed-upon results. Early attempts at economic liberalisation...
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