Archive for the ‘Colombia’ Category

Colombia’s Productive Transformation Program

August 20, 2010

Colombia has come a long way since 2000 – the Government has reclaimed territories it had abandoned to drug traffickers and rebel armies, crime rates have fallen drastically, investor confidence is high and unemployment has dropped.

Growth during the 2008–09 global recession was at 4.6% and an economic development program now focuses on specific sectors – useful lessons for other developing countries.

It’s called the Productive Transformation Program (launched 2007) – a novel public–private partnership in 8 sectors. Early results suggest that tighter collaboration has built competitive advantages.

To explain, Colombia has a diversified industrial base focused on the internal market – due to earlier import substitution. Accordingly, most industries failed to become globally competitive, Colombia thus depends on oil, coal, coffee, fresh-cut flowers etc. The new program now aims to accelerate the growth of value-added sectors.

Rather than choose winners, Colombia a contest decided the initial sectors – the pre-condition was that protection would not be granted, but the government would educate and train the workforce, improve the regulatory environment, help with export promotion and develop the required infrastructure.

The first sectors chosen were outsourcing and off-shoring, software, cosmetics, personal-care products, health tourism, textiles & clothing, electricity, auto parts, printing & graphic arts. The government worked with businesses to implement a strategic agenda based around an understanding of the sector’s position in the local and global marketplace, and to define initiatives required to increase the sector’s competitiveness.

For example, in the outsourcing sector, India and the Philippines were studied, given their success serving the English-language market. Morocco was also studied to understand its approach to the French-language market. It was also concluded that Colombia has lower costs than other Latin American nations and could serve the US Hispanic market and multinationals in the region.

There is an important new working dynamic between the public sector and the business community. Columbia’s leaders are committed to accelerating the pace of the country’s economic development. The Productive Transformation Program is an important element in this process. And Colombia’s new government has promised to continue it.

Source: McKinsey’s Bogotá office

(Cockatoo member Sebastian Brown returned last month from a lengthy tour of South America, and noted that Colombia is indeed getting its act together, and is ahead of Equador, Chile, Peru and Bolivia on most performance criteria – Editor)