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Enterprise Development and Market Competitiveness Project Final Report ENTERPRISE DEVELOPMENT AND MARKET COMPETITIVENESS PROJECT FINAL REPORT December 2014 This report was produced for review by the United States Agency for International Development. It was prepared by the USAID Enterprise Development and Market Competitiveness Project implemented by The Pragma Corporation and its partners. 0 Table of Contents ABBREVIATIONS ............................................................................................................................................ 2 EXECUTIVE SUMMARY................................................................................................................................. 6 IMPLEMENTATION STRATEGY ............................................................................................................... 10 VALUE CHAIN COMPETITIVENESS ........................................................................................................ 13 Bio-Pharmaceuticals ....................................................................................................................................... 13 Food Processing .............................................................................................................................................. 19 Tourism ............................................................................................................................................................ 24 Information Technology................................................................................................................................ 31 WORKFORCE AND ENTREPRENEURSHIP DEVELOPMENT ......................................................... 36 Center for Entrepreneurship and Executive Development (CEED) .................................................. 40 Empowering Armenia’s Women Entrepreneurs ..................................................................................... 45 BUSINESS ENVIRONMENT IMPROVEMENT ........................................................................................ 48 ACCESS TO FINANCE ................................................................................................................................ 58 Small Enterprise Assistance Funds.............................................................................................................. 63 Appendix A: Financial Report, by Line Item ............................................................................................. 65 Appendix B: List of EDMC Stakeholders and Supported Companies ................................................ 66 1 ABBREVIATIONS 3DMU 3D Modeling Union ABB Armenian Business Bank ADR Alternative Dispute Resolution AGBU Armenian General Benevolent Union AGG Armenian Guides Guild ASA Air Services Agreements ATF Access to Finance ATS Association of Technologic Startups B&B Bed & Breakfast BDS Business Development Services BEI Business Environment Improvement BSSRC Black Sea Silk Road Corridor CAPA Corrective and Preventive Action CAPD Civil Aviation Policy Department Team CDCS Country Development Cooperation Strategy CEED Center for Entrepreneurship and Executive Development CEFE Competency-based Economies through Formation of Enterprise CEO Chief Executive Officer CGF Caucasus Growth Fund CIS Commonwealth of Independent States CJSC Closed Joint Stock Company CRM Customer Relationship Management CTD Common Technical Document CTS Caucasus Travel Show DB Doing Business DCA Development Credit Authority DRC Domestic Research Cost EBRD European Bank for Reconstruction and Development EDMC Enterprise Development and Market Competitiveness 2 EIF Enterprise Incubator Foundation EMMP Environmental Mitigation and Monitoring Plan EU European Union FAO Food and Agriculture Organization of the United Nations GEDF Gyumri Economic Development Foundation GDCA General Department of Civil Aviation GC Gas Chromatography GITC Gyumri IT Center EIF Enterprise Incubator Foundation GFSI Global Food Safety Initiative GCP Good Clinical Practices GDP Good Distribution Practice GLP Good Laboratory Practice GMP Good Manufacturing Practices GPP Good Pharmacy Practice GSP Good Storage Practice GOAM Government of Armenia HACCP Hazard Analysis and Critical Control Points HDIF Homeland Handicraft Development Initiative Foundation HMS Hotel Management System HPLC High Performance Liquid Chromatography HR Human resources ICARE International Center for Agribusiness Research and Education ICT Information and Communications Technology IFC International Finance Corporation IPM Integrated Pest Management ISO The International Standardization Organization ISO/IEC International Organization for Standardization/International Electrotechnical Commission IT Information Technologies 3 RA Republic of Armenia R&D Research and Development RCI Regional Competitiveness Initiative (USAID funded project) LLC Limited Liability Company MEET Middle East Education through Technology MIC Microsoft innovation Center MoE Ministry of Economy MOU Memorandum of Understanding MPIU Medicine Producers and Importers Union NCFA National Competitiveness Foundation of Armenia NGO Non-Governmental Organization NPPO National Plant Protection Organization NSS National Statistical Service NTO National Tourism Organization OXFAM Oxford Committee for Famine Relief PCI DSS Payment Card Industry Data Security Standard PERSUAP Pesticide Evaluation Report and Safe Use Action Plan PCI DSS Payment Card Industry Data Security Standard PFIs Partner Financial Institutions PIC/S Pharmaceutical Inspection Co-operation Scheme PMP Performance Monitoring Plan PNA Product Network Analysis PPP Public-Private Partnership PSC Procurement Support Center ODR On-line Dispute Resolution QS Quick Start SCDMTE Scientific Centre of Drug and Medical Technology Expertise SCPEC State Commission on the Protection of Economic Competition SEAF Small Enterprise Assistance Fund SME Small and Medium Enterprise 4 SME DNC Small and Medium Entrepreneurship Development National Center SPS Sanitary and Phytosanitary TRF Tatev Revival Foundation SSFS State Services for Food Safety STTA Short Term Technical Assistance SWOT Strengths, Weaknesses, Opportunities, and Threats TO Tour Operator ToT Training of Trainers TVET Technical Vocational Education and Training UCO United Nations World Tourism Organization UITE Union of Information Technology Enterprises UITO Union of Incoming Tour Operators UNWTO United Nations World Tourism Organization USA United States of America USAID United States Agency for International Development USDA United States Department of Agriculture USEPA United States Environmental Protection Agency USSR Union of Soviet Socialist Republics VC Value Chain WB The World Bank WED Work Force and Entrepreneurship WFTGA World Federation of Tourist Guides Associations YSMU Yerevan State Medical University YSU Yerevan State University 5 EXECUTIVE SUMMARY The Enterprise Development and Market Competitiveness (EDMC) project was a three-year USAID-funded project and implemented by a consortium of international and Armenian development consulting companies under the leadership of the Pragma Corporation. EDMC sought to facilitate the development of competitive enterprises and value chains by stimulating innovation, improving management capacity, enhancing workforce skills in key occupational niches, accelerating new enterprise formation, improving access to finance, and addressing critical shortcomings in the business environment. The overall goal of EDMC was to assist the Armenian private sector to sustainably transform the competitiveness of high potential value chains in the Armenian economy in a manner that drives major increases in private investment and export growth, and expands employment. This was to be achieved through the identification of value chains with strong growth potential; and the analysis and prioritization of critical growth constraints limiting the capacity of firms in these value chains to improve productivity and fully realize their growth potential. The project incorporated an intensive focus on targeted technical/training support to effectively address firm- level constraints to competitiveness enhancement. At the same time EDMC utilized the strategic information on growth constraints generated at the firm and value chain level to identify and prioritize major legal/regulatory, training/workforce development, and development finance impediments to sustainable firm growth in high potential sectors. This provided a unique vantage point for the project from which to effectively prioritize and target institutional strengthening support efforts in a manner which would yield maximum impact in stimulating enhanced competitiveness for firms in our key value chains. The EDMC implementation strategy fully supported USAID/Armenia’s new Country Development Cooperation Strategy (CDCS) for 2013 – 2017. EDMC supported CDCS Development Objective 1: Inclusive and sustainable growth enhanced by working directly with anchor firms in high potential value chains, extending the reach of our technical assistance into all ten regions of Armenia (“going local”), advances regional integration, (tourism regional corridor development) and increases our outreach to women and youth for workforce development and employment in all four value chains. EDMC also supported CDCS Development Objective 2: More participatory, effective and accountable governance through our engagement of the private sector, government and civil society (including Diaspora groups) as co-partners in the implementation of our activities
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