Upgrading Opportunities

Economic upgrading is about identifying scalable solutions that improve process efficiency, increase product value and align market incentives more effectively.

In order to respond effectively to cluster opportunities, firms need to leverage technology to innovate and bring new value to the marketplace.  Adapting to this changing environment requires strong supporting institutions and robust business services. It is the public sector’s role to create a business environment that fosters this adaptation. We assist IPAs in identifying opportunities for economic upgrading that are aligned with the realities of the business environment. 

TECHNOLOGY-LED UPGRADING

Harnessing Technology & Innovation for Socio-Economic Development

New technologies provide access to entirely new capabilities, allowing us to reimagine the business models we use to create and capture value. We believe these technologies and resulting business models provide tremendous untapped potential for shared value creation in East Africa. 

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Upgrading initiatives –> Leverage technology, develop knowledge & adaptability –> Increase productivity/competitiveness –> Earn more revenue –> Pay more taxes –> Increased incentive for the public sector to invest(time, money, resources, attention, goodwill etc) in the business environment –> Shorter cycle time on productivity gains in key clusters –> Long-term economic growth (IMPACT: more and better jobs, technology transfer, opportunities for shared value creation.) 

Cluster-Level Comparable Analysis: Assessing the Public Sector Upgrading Environment.

A comparable cluster analysis is about identifying clusters in nations/regions of similar or slightly greater socio-economic development with similar characteristics to the subject. By assessing and comparing key aspects of the business environment in comparable clusters, such as; Supporting Services, Technology/Innovation & IPA Tactics we can garner valuable insights into opportunities for upgrading the cluster in focus. 

Comparative PESTEL Analysis

A PESTEL analysis is a framework used to analyze and monitor the macro-environmental factors that impact an organization’s performance.  It is especially useful in drawing high-level comparisons between foreign locations. 

Upgrading Infrastructure & Supporting Institutions

Is the environment suitable for business development services to exist? Does the public offer infrastructure to add more value? knowledge(training schools), credibility(accreditation/standards), Accreditation/Standardization

IPA Tactics & Incentives

Different IPAs leverage different tactics for encouraging investment and aligning incentives. From tax breaks to business service partnerships these incentives often make the difference for investors. 

Firm-Level Comparable Analysis: Assessing the Private Sector Innovation Frontier.

A comparable cluster analysis is about identifying clusters in nations/regions of similar or slightly greater socio-economic development with similar characteristics to the subject. By assessing and comparing key aspects of the business environment in comparable clusters, such as; Supporting Services, Technology/Innovation & IPA Tactics we can garner valuable insights into opportunities for upgrading the cluster in focus. 

Technology Frontier

Some regions have stronger ICT capacities which enable them to identify and adopt enabling technologies that assist in improving overall value creation. 

Access to Knowledge Capacities

Knowledge of standards, processes, technologies etc. 

Innovative Business Models

New technologies allow us to reimagine the business models we use to create and capture value. We believe these newly enabled business models provide tremendous untapped potential for shared value creation in East Africa. 

Focus Upgrading Strategies

There are a variety of strategies for economic upgrading, we focus on 3;

1. Process Upgrading

Process upgrading increases the efficiency of production either through better organization of the production process or the use of improved technology. The need to cut costs and/or increase output in response to intra- or inter- value chain competition drives process upgrading, reducing the per-unit cost of production, creating new value for the consumer and increasing firm competitiveness. For example, leveraging ERP software to improve business processes.  

2. Product Upgrading

Product upgrading is about improving product quality and increasing value for consumers. This may be stimulated by changes in end markets, usually stemming from changes in customer preferences, or the desire for higher value added, higher quality, and consequently more profitable products on the part of small businesses. To remain competitive in any rapidly changing market, small business producers must be able to upgrade their products on an ongoing basis in order to adapt to new trends and achieve higher standards. For example, leveraging technology and process for quality control and standardization, enabling value chain upgrading and new market access. 

3. Market-Linkage Upgrading

Market-Linkage upgrading is about aligning incentives towards shared opportunities through strengthened collaboration, coordination infrastructure and accountability systems. Inclusive and sustainable economic growth will requir sustainable linkages between SGBs, their larger scale business partners and supporting institutions. Not only do these linkages enhance enterprise competitiveness through the realization of economies of scale and scope, but they are also a source of sustainability, as they increase the capacity of stakeholders to collectively react to crisis and turning points. These linkages pave the way for broad-based, inclusive development, where poor entrepreneurs and workers participate in economic activities on fair terms. 

    SEA is an L3C that builds industry-specific social enterprise accelerators to scale the impact of innovative market-based solutions and generate deal flow for impact-oriented investors.

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