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BUILDING COMPETITIVE Industries in MOLDOVA Moldova CEED Final Report

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BUILDING COMPETITIVE Industries in MOLDOVA Moldova CEED Final Report BUILDING COMPETITIVE induSTRieS IN MOLDOVA Moldova CEED Final Report U.S. Agency for International Development 1300 Pennsylvania Avenue, NW Washington, DC 20523 Tel: (202) 712-0000 Fax: (202) 216-3524 www.usaid.gov MONTH DATE, YEAR This publication was produced for review by the United States Agency for International Development. It was prepared by Chemonics International Inc. 4 BUILDING COMPETITIVE induSTRieS IN MOLDOVA Moldova CEED Final Report USAID Contract No. 121-C-00-05-007111 The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. CEED CONTENTS OVERVIEW. 1 THE PEOPLE: BUILDING A SKILLED WORKFORCE. 3 THE PRODUCT: IMPROVING THE QUALITY, MANUFACTURING, AND MARKETING OF GOODS. 13 THE CONNECTIONS: BUILDING STRONG ASSOCIATIONS AND NETWORKING REGIONALLY AND ABROAD. 31 THE MONEY: ACCESSING FINANCE TO GROW COMPANIES. 59 LEssONS LEARNED . 65 FRONT COVER: An Intercentre Lux seamstress uses methods she learned from a CEED consultant. In just three months, after participating in CEED’s productivity enhancement program, the company saved 24,800 person-hours (the equivalent of 13 full-time employees), greatly improving efficiency. CEED INSIDE FRONT COVER: In May, even before grapes appear on the vines, there is much to be done at Et Cetera winery. Et Cetera is one of a handful of wineries that joined to form the CEED-supported Moldovan Small Wine Producers Association. The association aims to improve the business environment for small-scale winemakers. CEED / ANGELA POTTER BACK COVER: CEED’s support enabled Lion Gri winery to increase CEED’s assistance enabled Asconi vineyards to improve its production of premium wines and differentiate its markets. As a winemaking techniques in the 2008 and 2009 harvest seasons. result of improved quality, exports of dry wines increased from 15 Asconi sold wines from these vintages to a major Czech retail chain to 20 percent of total production. The winery won several medals at and a distributor in Poland. the 2008 ExpoVin Moldova competition. CEED / ANGELA POTTER CEED ContentS iii OveRview Nearly 20 years after the Soviet shows and association-building Union, Moldova’s wine, textile and proved essential to growth; and apparel, and information commu- how it helped free up working nication and technology (ICT) sec- capital for businesses.While no tors had gained stability and market single formula exists to make an share that readied them for growth. economy more competitive, these The United States Agency for In- sometimes small but important ternational Development (USAID) infusions of technical assistance sought to foster further growth lifted businesses over an eco- by launching the Competitive- nomic hurdle that, in aggregate, ness Enhancement and Enterprise comprised an impressive gain. In Development (CEED) project in numerous cases, CEED’s assistance 2005. CEED’s goal was to prompt enabled people working in these new investment and generate em- industries to experience, or at least ployment by forming competitive forecast, growth they never had clusters With a budget of nearly $8 imagined. In total, CEED assisted million and a five-year life span, 115 companies that recorded CEED aimed to build capacities growth of 3,500 full-time equiva- within these priority industries at lent jobs and $84 million in sales. the firm level while assisting policy Managed by Chemonics and its and regulatory reforms to promote partners, Crimson Capital Cor- investment and bolster Moldova’s poration and Dexis Consulting burgeoning economy. Group, CEED’s design followed the private sector competitiveness To tell the story of how CEED program area and the private sector enhanced the overall competitive- productivity program element of ness of the country’s three target the Foreign Assistance Framework. sectors, this final report details The project’s complementary busi- results through the lens of four ness development and business themes that emerged from project environment components ensured activities: the people, the products, that industry competitiveness the connections, and the money. would be advanced at the policy The report illustrates how CEED and firm levels. Each component helped developed a strong and carried several key result areas capable information technology around which the project grouped (IT) workforce; how it enhanced activities. The results are summa- efficiency and branding to pro- rized in this report and detailed Moldova is at a crossroads geographically, politically, and duce better products and increase around this framework in the economically. Positioned between Western Europe and the CIS, sales and jobs; how its support for quarterly and annual reports. Moldova has the advantage of geographical proximity to both stable but demanding western markets and growing but risky making connections through trade eastern markets. iv ContentS CEED / ANGELA POTTER OveRview 1 CHAPTER ONE THE People: Building A SKilled WORKfoRce Developing a skilled workforce, Turning to successful models in particularly in the ICT and textile neighboring countries, includ- sectors, proved an important ing Romania, CEED helped fill driver for economic growth dur- the education gap in Moldova by ing CEED’s assistance. Acquiring introducing three major, vendor- new skills allowed workers in based curricula in colleges and these industries to take advantage high schools: Cisco Certified of technologies that make busi- Networking Associate (CCNA) nesses faster, more efficient, and, training for universities, the ultimately, more competitive. Microsoft IT Academy, and the Cisco IT Essentials (ITE) cur- ICT riculum for high schools. More As one of the fastest-growing than 500 students have enrolled sectors in Moldova, the ICT in these programs, which offer a industry demands more skilled way to gain practical ICT skills labor than the country can sup- before entering the work force. ply. From 2003 to 2008, ICT exports jumped from $24 million Cisco CertifiedN etworking to $114 million. IT services alone Associate Program Readies increased from $1.2 million to University Grads for IT $26.3 million. High salaries and Jobs the relatively short time (three A study commissioned by CEED to five years) needed to enter the found IT networking skills in workforce makes ICT an at- short supply in Moldova. Nearly tractive sector for young people. 70 percent of managers inter- However, educational programs viewed for the study indicated are not up to the needs of the that networking skills were essen- market, limiting job opportuni- tial for ICT companies, and 50 A student at the high school in the village of Taraclia in Causeni ties and sector growth. percent believed that educational rayon disassembles and reassembles a computer as part of the Cisco IT Essentials program. CEED helped launch the program in 20 rural high schools throughout Moldova. CEED / ANGELA POTTER THE People: Building A SKilled WORKfoRce 3 institutions needed to improve threats, and understand wireless their curricula in this area. networking concepts and termi- nology. Students who complete In response, CEED helped Cisco the course may take an exam in expand its Cisco Networking English to obtain the internation- Academy (NetAcad) so students ally recognized CCNA certificate. could obtain CCNA certification They may also enroll in advanced from three Chisinau universi- Cisco training through DNT ties and gain a competitive edge Association. in the labor market. The project started by sponsoring a training- To date, 51 instructors have been of-trainers program in partnership trained to lead Cisco CCNA and with Cisco’s Regional Academy ITE classes and 360 students in Moldova, DNT Association. (including 107 women) from The association trained nine new 14 academic institutions sup- CCNA instructors from the three ported by CEED have enrolled. partner universities. The College These Moldovan students have of Finance and Banking opened joined 100,000 students in more its academy in 2008; the Free In- than 130 countries taking Cisco ternational University of Moldova courses through 8,000 academies. and the Technical University Cisco Systems reported double- CEED / ANGELA POTTER of Moldova opened academies and triple-digit growth in Mol- Andrei Ghergelas, who earned his Cisco CCNA certificate, studies dova’s NetAcad program between with a classmate at the Cisco Academy in Chisinau. He applied the in 2009. To date, eight instruc- skills and knowledge he gained from the certificate program to his job tors have been trained and 119 2008 and 2009, which it credits as an engineer with a local telecommunications firm. The academy students have enrolled in CCNA to CEED support. is fully equipped with materials, hardware, and software, providing certification programs. students the hands-on experience needed to make them marketable. Microsoft IT Academies To raise public awareness of Cisco Take Off with CEED’s networking courses, motivate Assistance academy at ASEM. Taking the determined an appropriate tuition students, and ensure continuation Microsoft technologies serve as lead on planning and handling lo- that would allow the academy to of the course offerings beyond the the platform for doing business gistics, Mr. Tutunaru determined operate sustainably. To prepare project’s life span, CEED built a worldwide, but there were few that the university had everything for a fall launch, CEED acceler- sustainable framework, includ- certified Microsoft
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