Development Of Local Suppliers Research Articles

CLUSTER POLICY AND ITS IMPACT ON FDI ATTRACTION MODELS AND BETTER COOPERATION BETWEEN MNEs AND SMEs

The concept of FDI has been analyzed by several theorists and many of them see FDI as an engine of growth. FDI affects economic growth directly and indirectly. It is well known that FDI has a positive impact on the domestic economy through the transfer of technology and skills, development of local suppliers in terms of providing technical assistance, training for employees, transfer of knowledge, etc. In this way, FDI affects the improvement of productivity and competitiveness of the entire economy. Multinational enterprises and their foreign affiliates recently generate one third of the global GDP, as well as two thirds of international trade. They also account for half of global exports. Precisely because of their economic importance, many governments offer subsidies and tax breaks to attract multinational enterprises, and consequently FDI. According to OECD (2005), linking MNEs and SMEs is important in the context of investment for development. The so-called "spillover" of know-how and technology from foreign investors to the local business sector is one of the biggest benefits of FDI for development. In most countries, SMEs are considered as the majority of the domestic business sector, therefore the process of overcoming the barriers to the connection between large and small enterprises is of great importance for the overall development. But the benefits of cooperation between MNEs and SMEs do not come automatically. Consequently, if we analyze specifically only one segment of the effects of FDI, such as the introduction of new technologies and innovations, as one of the biggest benefits of the host country from FDI, we come to the conclusion that this transfer is not always the same, but is very more present and effective if it is done in geographically concentrated clusters, in contrast to the cases when it is realized in dispersed companies of the same sector. Companies operating in clusters are characterized by a high degree of specialization and complementarity. This generates dynamic processes of learning, innovation and knowledge transfer. In the clusters, a process of collective learning is realized, which results in innovation and competitiveness even in sectors where high technology is not applied. This paper aims to explore models and ways of attracting FDI as well as creating preconditions for realizing as many benefits and spillovers as possible from the established cooperation between foreign MNEs and local SMEs, such as clusters. The results show that although the clusters in the Republic of North Macedonia are formally functioning, they are far from the desired condition to be in a situation to provide essential assistance in the direction of increasing the positive effects of the cooperation of SMEs and MNEs. However, the clusters should continue to be supported by the relevant competent institutions in order for the desired effects to be measurable, concrete and significant for the local economy.

The South African auto industry in a world of GVCs: lead firm sourcing strategies and local supplier development

The South African auto industry in a world of GVCs: lead firm sourcing strategies and local supplier development

The South African Auto Industry in a World of GVCs: Lead Firm Sourcing Strategies and Local Supplier Development

The South African Auto Industry in a World of GVCs: Lead Firm Sourcing Strategies and Local Supplier Development

Opportunities and Challenges for Lebanese Horticultural Producers Linked to Corporate Buyers

This paper aims to analyze procurement decisions and contractual arrangements in the horticultural supply chain and evaluate opportunities for and challenges of horticultural producers linked to supermarkets and corporate restaurants in Lebanon. Accordingly, in-depth, semi-structured interviews were conducted with key horticultural supply chain actors in Lebanon. The study finds that corporate restaurants offer more opportunities for large horticultural producers and suppliers than supermarkets. Yet, corporate restaurants have more stringent quality requirements, as demonstrated by food safety certifications, and their contractual relationships are binding, symbiotic, and formal. Supermarkets source most of their products from wholesale markets and have opportunistic, non-binding relationships with their suppliers. In sum, the nature of the business relationships between horticultural producers and suppliers and corporate buyers depends on the ability of the producers to meet the quality requirements of the latter. Although corporate buyers have shown some interest in the local produce, they are yet to invest in local supplier development initiatives to enhance the capabilities of producers. Instead, corporate buyers resort to imports when the local producers fail to meet the quality standards or required volumes. The study suggests several alternative routes to enhance the market position of horticultural producers and suppliers in Lebanon.

An infatuation with building things: Business strategies, linkages, and small city economic development in Manitoba

AbstractThe establishment of a solid understanding of regional economic development has proved to be highly elusive. Research efforts within this area have focused largely on major urban areas, yet this somewhat narrow focus means that economic development activities in smaller urban centers have not received the attention that they deserve. This article investigates regional economic development within a small city context through a survey‐based study of the entrepreneurial ecosystems operating in two small cities in the province of Manitoba. The results indicate that many currently accepted bases of regional business community expansion, such as government support and development of local suppliers, have limited utility within these cities. Concurrently, business leader survey responses from the two cities reveal a unique set of factors that drive economic development success in this nonmetropolitan case study, keyed by the pivotal role of a unique mix of nonlocal linkages, local cultural resources, and social connections in catalyzing local business expansion. These findings indicate that business community growth in the study cities proceeds from a distinctive template relative to larger centers, and suggest that increased research attention is necessary to elucidate the bases of business success in a more diverse selection of successful small cities.

Local content in extractive industries: Evidence and lessons from Chile’s copper sector and Malaysia’s petroleum sector

This paper examines the role of industrial policy in providing incentives for resource-based industrialization and overcoming market obstacles in the development of local suppliers in extractive sectors. More particularly, this study examines and compares local content outcomes and strategies in Malaysia’s petroleum sector and in Chile’s copper sectorThe Malaysian experience shows that several market barriers can be overcome by targeted policies and infant industry protection to increase R&D, accumulate skills and capabilities. In contrast, in Chile, the development of internationally competitive local suppliers has been slowed down by market bottlenecks and the lack of public incentives for innovation, skilled human capital accumulation, and learning by doingBeyond unsustainable protectionist approaches focused on short-term goals such as local content quotas, this study reveals that sustainable local content policies require capacity building programme (through intra-industry dialogue to share key information on quality requirements, R&D and specialized human capital accumulation) in order to gradually build long-term competitiveness. The gradual accumulation of technology and skills through learning by doing enables to develop the scale and capacity of local firms to meet the demand for increasingly sophisticated inputs and services in extractive activities, as well as develop transversal capabilities that can serve other sectors.

Strategic Local Manufacturing Supplier Development Roadmap as a Decision Support Tool

CITATION: Vermeulen, M. & Oosthuizen, G. A. 2019. Strategic local manufacturing supplier development roadmap as a decision support tool. Procedia Manufacturing, 33:594-601, doi:10.1016/j.promfg.2019.04.074.

A DECISION SUPPORT SYSTEM FRAMEWORK FOR LOCALISATION INVESTMENT SELECTION

Formulating localisation strategies is crucial to ensuring the development of local suppliers, which in turn results in job creation, increased export earnings, and local and national economic growth. The aim of this article is to present a generic decision support system (DSS) to guide localisation decision-making. Multi-criteria decision analysis (MCDA) is used to develop the model, which is then applied to a biometric identity management system (BIMS) case study that places the study within the context of the tool, die and mould-making (TDM) industry of South Africa.

La empresa social como detonadora de calidad de vida y desarrollo sustentable en comunidades rurales

The aim of this paper is to analyze the mechanisms by which an indigenous social enterprise contributes to a rural community’s sustainable development and improves the quality of life of its inhabitants. The work follows a qualitative methodology and uses the case study as a research technique. The theoretical framework deployed to identify the nature of the dynamics involved is social entrepreneurship, as a means of fighting poverty and changing patterns of socio-economic exclusion. The research suggests that social enterprise uses four main mechanisms to promote rural sustainable development in the community where it operates: innovation in the exploitation methods of natural resources, labor as a source of quality of life, bonding and development of local suppliers; and the equitable sharing of benefits between the economic, social and environmental dimensions.

Technological Capabilities of Brazilian Shipbuilding Suppliers

Technological capabilities (TC) play a key role in the competitiveness of firms in industrial sectors. Suppliers in emerging economies often acquire technological capabilities by operating and mastering technologies developed by others and then leveraging this learning to develop indigenous technologies. By reviewing research on firm specific technological capabilities, the development of global value chains and industrial clusters in emerging markets we discuss local suppliers’ insertion and upgrading in the supply chains of new large industrial enterprises. Using the Brazilian shipbuilding industry as context, we investigate and develop propositions related to the ability of local suppliers to develop technological capabilities that permit eventual insertion into the local supply chain. This research has applications for managers and policy makers from other emerging market countries seeking to increase local sourcing through development of local suppliers.

Industrial Upgrading in Sub-Saharan Africa: The Competitive Impact of China on Supplier Linkage Development Potentials of Resident Asian Entrepreneurs

Current efforts to explain the implications of China’s growing economic attractiveness for development in other regions provide a framework that distinguishes between complimentary and competitive impact. From the perspective of competitive impact analysis its direct trade related manifestation arguably remains the least investigated to date. Focusing on the experience of sub-Saharan Africa we explore the connection between importation of Chinese apparel intermediate material input and domestic supplier development (displacement) in the region. Insights from the GVC literature are used to motivate the working hypothesis of the paper that the potential spillover impact of Asian direct investment on local supplier development in Africa is currently being undermined by the former’s reliance on intermediate material imports from China. Then using data for the small African country of Lesotho to estimate a supplier linkage-type model we verify the accuracy of our claims by showing that: One, Asian investors in the country’s apparel manufacturing business rely principally on China for their input supplies; two, consequent on this the incidence of Asian entrepreneurship in the country’s apparel sector is associated with a 19 per cent decrease in predicted probability of high backward linkage formation.

Integrating local suppliers in a global supply network

PurposeThe development of a local area supply chain network (LASCaN) is only as good as the skills and technological capabilities of the companies within that network. Recent studies have pointed to the lack of capability amongst local suppliers and hence many OEMs have now moved towards global supplier networks to meet demand. The purpose of this paper is to highlight the drivers which push companies to develop global supplier networks.Design/methodology/approachThrough the development of a case study approach, the paper chronicles the design, development and implementation of a supplier development programme (SDP). The programme is subsequently evaluated for its effectiveness in the subject company.FindingsThe LASCaN is evaluated rigorously and describes accurately the effectiveness of the system and how the integration of the LASCaN into the global network allows the company to meet the demands of a fluctuating, mass customised market.Originality/valueThe proposed SDP framework for the successful development of a LASCaN contributes to the existing knowledge base on supply chain systems and subsequently disseminates this information in order to provide impetus, guidance and support towards increasing the development of local suppliers in an attempt to move the UK SME sector towards world class manufacturing performance.

Towards an understanding of technical change in semi-industrialized countries

Contrary to canventional wisdom, semi-industrialized countries engage, to an appreciable extent, in R&D activities leading to technical change. Much of their technical change activity consists of adaptation of foreign technology to local inputs and market preferences, and is carried out in response to contraints and distortions prevailing in their economies. Moreover, in this context, limited consideration is given to cost reduction, since the main objective is to manufacture under protection and technical change becomes a complementary response to the productive effort. A key factor in the ability to engage in such technical change activities is the availability of technically competent manpower, including scientists, engineers and technicians. At the same time, previous investment in the formation of such technical skills may result in an “excessive” supply of skilled labor, which , coupled with import constraints, will induce eexcessive adaptation of machinery and equipment and may deter from the importaion of new technology embodied in such equipment. Conversely, a pronounced scarcity of technicl skills may impade the adaptation of technology and result in excessive importantion of machinery and limit local efforts of modification, adaptation, etc. Because of the eay technical change is generated, it does not necessarily follow that it is all cases beneficial to the national economies of the countries in which it takes place. However, proper cost benefit accounting of the social returns to technical change activities is complicated by the intractable nature of many of the indirect and secondary effects, like learning from the R&D, or the impact of adaptation to domestic inputs in the development of local suppliers, etc. Also, th interdependencies between technical change and production and between various technical change activities are little understood. conventionall economic theory has contributed little to the understanding of the technical development process. The analysis of technical change in terms of the market failure metaphor, while providing useful insights, is also not very as far as understanding the problem of not very helpful as far as understanding the problem of technical change in semi-industrialized countries is concerned, since the roles of uncertainty and externalities in that situation are quite different from those foreseen in the market failure analysis for industrializerd countries. Special attention should be given to the possible application of the metaphor in trying to improve our understanding of the problems arising in the use of technical information and not only its creation. This would be particularly helpful in connection with the technical development problems of small enterprises not enjoying the benefits of the devesion of labor which are possible in larger firms.