Rritje Albania / Competitive Enterprise Development YEAR 3 WORK PLAN APRIL 1, 2011 – MARCH 31, 2012 FEBRUARY 25, 2011 This publication was produced for review by the United States Agency for International Development. It was prepared by the team of Rritje Albania/ Competitive Enterprise Development (USAID Contract No. 182-C-00-09-00002-00) of Chemonics International, Inc. 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. CONTENTS ACRONYMS AND ABBREVIATIONS .................................................................................. 3 A. OVERVIEW ......................................................................................................................... 5 A1. Introduction .................................................................................................................. 5 A2. Project Goals and Objectives ....................................................................................... 5 A3. Year Two Challenges and Lessons Learned .................................................................. 6 A4. Project Implementation Principles ............................................................................... 8 A5. Results Framework ...................................................................................................... 9 B. Detailed Work Plan ............................................................................................................. 11 B1. Industry and Single-Client Solutions ............................................................................ 11 B2. Key Industries and Regions .......................................................................................... 11 B2a. Garment Industry ...................................................................................................... 12 B2b. Footwear Industry ..................................................................................................... 15 B2c. Tourism Industry ....................................................................................................... 18 B2d. Information and Communication Technology (ICT) Industry ................................. 21 B2e. Recycling Industry .................................................................................................... 25 B3. Selection of Municipalities................................................................................................ 26 C. ACTIVITIES ...................................................................................................................... 27 C1. Binding Problems Specific to Individual Businesses ................................................... 27 C2. From Firm-level to Industry-Level Solutions ............................................................... 27 D. RESULTS-BASED PLANNING AND MANAGEMENT ................................................ 40 D1. Planning, Monitoring and Evaluation ........................................................................... 40 D2. Administration and Finance .......................................................................................... 41 D2a. Personnel and Recruitment ....................................................................................... 41 D2a. Finance ...................................................................................................................... 42 E. CROSS-CUTTING ISSUES ............................................................................................... 42 E1. Partnerships and Coordination ...................................................................................... 42 E2. Small Grants Program ................................................................................................... 43 E3. Gender ........................................................................................................................... 45 E4. Environment .................................................................................................................. 45 ANNEXES ............................................................................................................................... 47 Annex I – Year 3 Implementation Schedule ....................................................................... 47 Annex II – Life-of-Project Work Plan ................................................................................. 57 Annex III – Performance-Based Monitoring Plan ............................................................... 63 2 RRITJE ALBANIA – YEAR 2 WORK PLAN ACRONYMS AND ABBREVIATIONS A2F Access to Finance AAQM Authentic Albania Quality Mark Program ACIT Albanian Center for International Trade AIDA Albanian Investment and Development Agency AIMS Assess, Innovate, Measure and Share AITA Albanian IT Association APS Annual Program Statement ASC Albania Software Cluster ATA Albanian Tourism Association B2B Business to Business BEO Bureau Environmental Officer BSP Business Service Provider CAPM Certified Associate in Project Management CDC Citizen’s Development Corps Development Solutions CED Competitive Enterprise Development CGP Client Growth Plan CHT Certified Hospitality Trainer CIFF Copenhagen International Fashion Fair CPR Contractor Performance Review DCA Development Credit Authority dTS Development & Training Services DQA Data Quality Assessment EBRD European Bank for Reconstruction and Development EDI Electronic Data Interchange EDEM Enterprise Development and Export Market Services project EU European Union GDP Gross Domestic Product GOA Government of Albania GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German International Assistance Agency), a new organization formed in 2011 from the unification of GTZ, DED and Inwent GSTC Global Sustainable Tourism Criteria Global Sustainable Tourism Council ICT Information and Communications Technology ICT-TRC ICT Training and Resource Center IFC International Finance Corporation INSTAT Institute of Statistics of Albania IT Information Technology KRA Key Results Area LGPA Local Governance Program of Albania MCC Millennium Challenge Corporation METE Ministry of Economy, Trade and Energy MICTI Ministry of ICT and Innovation MTCYS Ministry of Tourism, Culture, Youth and Sports NGO Nongovernmental Organization NTA National Tourism Agency PBMP Performance-Based Monitoring Plan PEP Productivity Enhancement Program 3 RRITJE ALBANIA – YEAR 2 WORK PLAN PFS USAID’s Partners for Financial Stability PIR Project Intermediate Results PMI Project Management Institute PMP Project Management Professionals PMU Project Management Unit PPP Public-Private Partnership RCI Regional Competitiveness Initiative (USAID-funded) RDA Regional Development Agencies SBCA Small Business Credit and Assistance Project SEE South Eastern Europe SNV Stichtig Nederlandse Vrijwilligers (Netherlands Development Organization) STIKK Kosovo ICT Association STTA Short-Term Technical Assistance TBD To be determined TOT Training of Trainers UNDP United Nations Development Program UNESCO United Nations Educational, Scientific and Cultural Organization USAID United States Agency for International Development 4 RRITJE ALBANIA – YEAR 3 WORK PLAN A. OVERVIEW A1. Introduction On March 18, 2009, USAID/Albania awarded Chemonics International the Albania Competitive Enterprise Development (CED) contract, a five-year activity with a value of $9,774,154. To better resonate with the local client enterprises and Albanian partners, the project team proposed the name Rritje Albania/ Competitive Enterprise Development and throughout the remainder of this report, the project will be referred to as Rritje Albania. In February 2011 a contract amendment realigned the project’s reporting and planning year with USAID’s fiscal year from October to September. Therefore, although this work plan describes activities over the 12-month period from April to March, the description of activities from October 2011 to March 2012 are provisional and may be revised in the next 12-month work plan that will span USAID’s fiscal year FY2012. At the time this document was being drafted, USAID/Albania was undertaking a review of its economic growth portfolio to guide the Mission’s strategic direction over the coming years. Once finalized, this review will provide valuable information to be considered by Rritje Albania in its next work planning session scheduled for August-September 2011. This work plan builds on the knowledge, experience and feedback obtained from extensive meetings with clients, industry experts, partners, short-term technical assistance consultants and others encountered over the course of the first year and 10 months of project implementation. It also takes into account and leverages past and on-going projects funded by USAID (SBCA, EDEM, ACIT, LGPA, DCA, RCI), EU, UNESCO, UNDP, EBRD, IFC, SNV and GIZ. As the project moves into its 3rd year, it’s geared to maintain the accelerated pace of delivery of its technical assistance within a well-founded strategic framework that will enable firms to overcome binding constraints to business expansion. As is true of any demand-led activity, Rritje Albania will continually review this work plan over the course of its execution and will update it to capitalize on opportunities identified or to overcome problems encountered. A2. Project Goals and Objectives The goal of Rritje Albania is to enable Albanian private enterprises to expand their businesses and improve competitiveness, thus contributing to the country’s continued, broad-based economic expansion. The project’s main objectives are to support the sustained growth of non-agricultural enterprises, increase household income and create gainful employment by developing and strengthening the competitiveness of existing enterprises and start-ups in targeted municipalities of Albania. The project is achieving these objectives through three component areas of intervention: (1) Strengthening trade and investment capacity; (2) Increasing enterprise productivity; (3) Improving workforce development. Rritje Albania works to identify constraints to competitiveness then brings a mix of technical assistance, training, targeted grants, and linkages to financing to help remove these constraints. The main focus is to effect positive changes in competitiveness at the enterprise level as measured through two key indicators: increased sales and jobs. The project’s work in the above areas is guided by the following principles:  Implement market-based and demand-driven interventions;  Foster local ownership and participation;  Leverage resources and prioritize interventions through partnerships;  Focus on results to guide the implementation process. 5 RRITJE ALBANIA – YEAR 3 WORK PLAN Over the life of the project, Rritje Albania looks to contribute to at least $98 million USD in increased sales at assisted businesses. However, as mentioned in the project’s progress reports through January 2011, the results of project activities will be measured not only through the firm-level improvements in sales and jobs, but also through the impact of an increasing number of industry-level initiatives. Besides its support to existing firms, Rritje Albania is sensitive to the needs of start-up firms, or downstream/upstream extension by existing enterprises, that will emerge to take advantage of opening markets and increase domestic incomes over the life of the project. We will actively search out start- ups and offer demand-driven assistance and grants to provide the support needed to generate sustainable new income and jobs for Albanians. Some of the ways this will be done include:  Encouraging high potential start-ups or nascent firms focused on new technology and innovation to apply for grants;  Actively collaborating with local financial institutions to encourage referrals of start-up companies to contact the project;  Sponsoring a start-your-own business plan competition with the winner eligible to apply for project technical assistance or a grant;  Working with other projects and organizations that have programs that sponsor and encourage new start-ups, such as the initiative by Microsoft Albania to assist IT start-ups. The analysis of constraints observed through project implementation has highlighted weaknesses at the meso and macro level of Rritje Albania’s target sectors that are hindering the development of more competitive enterprises. As a result, the project has expanded its mostly firm-level focus to consider market demands for technical support that helps to fill critical needs at the micro, meso and macro levels of the tourism, garment, footwear and ICT sectors. Requests for project support are measured against their contribution to the achievement of the following objectives for Rritje Albania’s target industries: 1. Promote Albania and its enterprises as sources of secure, dependable, quality-conscious and competitively-priced products and services; 2. Support and strengthen key meso-level actors, including associations, chambers of commerce, educational institutions and business services providers (BSPs); 3. Support and strengthen public-private-partnerships by working with the Government of Albania to provide a well-functioning enabling environment for the development and expansion of competitive enterprises; 4. Improve the firm-level competitiveness of Albanian enterprises through tailored solutions delivered at the firm level, including movement into higher value-added products and services. Although the establishment of positive images of Albanian products and services can promote first- time sales, repeat sales are only won by meeting or exceeding buyers’ demand for quality, value and timely delivery. Rritje Albania’s technical assistance will help firms to first increase sales and then assist them to adopt globally competitive practices that will support sustainable business growth over the long term. All industry-level initiatives listed in Sections B2a-B2e will complement the firm-level competitiveness by improving the environment and existing support for companies operating in Rritje Albania’s priority sectors. A3. Year Two Challenges and Lessons Learned As part of the Year 3 work planning exercise, an off-site retreat was held in Durres from January 25- 27, 2011 and attended by the full field office team plus two persons from Chemonics’ headquarters: the project management unit (PMU) director and a human resource employee with experience in leading work planning workshops. 6 RRITJE ALBANIA – YEAR 3 WORK PLAN Over the month leading up to the retreat, the field office team held several one-half day mini-retreats in the Tirana office to reflect on prior project implementation and capture the challenges, lessons- learned and possible ways forward. Having done this, the team was prepared to accomplish the primary goals of the work planning retreat--namely that participants will have:  Leveraged individual and team communication styles to improve effectiveness with one another, clients, and other stakeholders;  Achieved a common understanding of targets, results to date and goals for project Year 3;  Refined Year 3 assumptions and developed strategies and approaches to meeting project goals;  Developed the first draft of the Year 3 work plan, identifying activities, resources, timelines, milestones, and expected results. As part of the analysis of activities through January 2011, staff listed common assumptions that influenced the choice of technical activities undertaken and the allocation of project resources. This led to a better understanding of the project approach and enhanced the team-building component of the workshop. Furthermore, new employees are now better able to identify their role on the team and how they contribute towards meeting project goals. The technical activities undertaken by the project showed dramatic increases over the last three quarters in both number and variety. The addition of the ICT Advisor/Workforce Development Specialist and a Grants Manager in November and December 2010, respectively, further boosted the variety and pace of technical activities and helped the project to vastly exceed its indicator targets as detailed in the latest quarterly performance reports. In response to market demand, the project launched a number of new initiatives that are expected to be continued over the life of the project. Described in detail elsewhere in this work plan, these involved meso and macro level assistance such as the drafting of a new Tourism Law, support to industry associations, the creation of new public-private partnerships (PPP) and working groups, and exploring the establishment of a new ICT Training and Resource Center. In the area of the project’s Trade and Investment Component, the process to help Albanian garment firms to prepare, attend and follow-up on the Copenhagen International Fashion Fair (CIFF), provided key lessons that have shaped future project assistance. Among these were the importance that Albanian companies have print and web site marketing materials ready, attend the appropriate trade fair and employ staff with foreign language abilities to support their sales and marketing. In addition, firms must acquire the capacities to conduct internet research, utilize contact management techniques and software tools to communicate via email and web sites and maintain accurate records of communications with clients and prospects. Project assistance on these topics was provided to clients and will be expanded in the future. Several foreign short-term technical assistance (STTA) experts provided firm-level and multi-client assistance last year, notably: Jeanne Aktinson to support garment companies attending CIFF, Bill Nichols to assist footwear companies to improve their sales and marketing, and John Haycock, the productivity expert for manufacturing companies. In order to cost-effectively reach more clients, the project hired two professors from the Polytechnic University of Tirana to work closely with the productivity foreign expert and provide firm-level assistance on their own. This allowed the international expert to move onto more complex productivity issues in future assignments while providing backstopping support to the local consultants. Based on recommendations from the experts and feedback from the companies and technical team members, a similar plan using local sales and marketing consultants paired with an international expert is being designed for roll-out through activities included in this work plan. 7 RRITJE ALBANIA – YEAR 3 WORK PLAN Lastly, the project continues to seek and benefit from synergistic opportunities resulting from collaborations and coordination with other donors and stakeholders. Noteworthy partners with which we worked in the last three months alone included: USAID’s Regional Competitive Initiative (RCI), Albania Tourism Association (ATA), National Tourism Agency (NTA), Ministry of Tourism, Culture, Youth and Sports (MTCYS), Albanian Information Technology Association (AITA), German Technical Cooperation (GIZ), EBRD’s TAM-BAS, Dutch Cooperation (SNV), University of Tirana, associations of garment and footwear firms, and many others. Furthermore, in November- December 2010 the project initiated contact with commercial attachés at major EU embassies to share information on bilateral business cooperation opportunities, trade fairs, etc. Through these partnerships and feedback from clients, Rritje Albania has come to realize the importance of supporting activities at the meso and macro levels of its target sectors. Although the project’s contract performance indicators are not designed to capture much of this work, the technical support we provided at these levels broadly impacts all businesses operating in the sector thereby multiplying the number of firms that benefit from the assistance and contributing to the sustainable development of each industry. A4. Project Implementation Principles Market-based interventions Rritje Albania takes market demand as the starting point for program activity and works backward to solve the business constraints standing in the way of achieving business potential and market competitiveness. The pursuit and capture of new buyers and increased sales drives businesses to invest in human and capital assets to fill orders and earn profits. When firms actively and purposefully look for business and sales opportunities, they learn what is needed to be competitive and become economically incentivized to improve their product and service offer through enhanced productivity, adaption of new technologies and professional management practices. In this way, increasing sales is the economic incentive that drives firms to improve their competitiveness which in turn leads to more profitable businesses and lasting job growth. Local ownership and participation Rritje Albania fosters local ownership and participation by building close relationships with client firms and key value chain actors in its target sectors and regions. Trust and confidence are requisites to sharing critical information, asking for help, changing attitudes and altering business practices. For enterprises wishing to receive assistance and willing to divulge detailed information on their firms, the project’s Business Advisors meet them over a series of visits and complete a standardized Client baseline profile (both qualitative and quantitative) that is used to develop a Client Growth Plan (CGP). The CGPs are demand-driven documents that identify constraints to business expansion, describe solutions to be delivered by Rritje Albania, quantify the increase in sales and jobs expected and commit the businesses to provide detailed quarterly reports that are treated in confidence. The CGP is a dynamic document, updated periodically. While firms with signed CGPs comprise the majority of Rritje Albania’s clients, other organizations that benefit from project activities are also beneficiaries. For example, firms assisted to improve their competitiveness and increase sales and jobs through multi-client events, business to business meetings (B2B) and other technical assistance delivery mechanisms are also considered project beneficiaries as they receive project assistance. The revised Performance-Based Monitoring Plan attached in Annex III discusses implications and actions necessary to ensure that positive externalities and results at the industry-level and non-CGP client are captured and reported. As well, structures such as business associations, public sector agencies and key ministry departments also are candidates for partnering with the project. While their direct benefits are often more qualitative changes in institutional 8 RRITJE ALBANIA – YEAR 3 WORK PLAN strengthening and capacity development, their private sector members will achieve positive results that the project will record and report through these non-firm-level project beneficiaries. Local ownership and participation is a key principle to Rritje Albania’s strategy to ensure project activities have a sustainable and positive impact on Albania’s private sector. Leading firms and individuals that are “early adapters”, willing to innovate and invest in their businesses, will be sought, identified and supported by Rritje Albania. By serving as models and spokespersons for the sector, others will be encouraged to raise industry standards and create a framework for sustainable growth. Likewise, key industry associations with dynamic leadership will be supported to deliver multi-client solutions that improve the competitiveness of members. To achieve significant impact, Rritje Albania supports industries that constitute a large percentage of Albania’s GDP to build sector-wide capacity to sustain progress beyond the life of the project. Leveraged resources and prioritized interventions While Rritje Albania’s funding is considerable, its mandate is large, covering non-agriculture based industries with an initial concentration in footwear, garments, recycling and ICT in all major municipalities and tasked with providing a full-range of technical assistance to improve competitiveness at the firm and industry levels. In many cases, solutions to identified constraints may be beyond the financial means of individual clients or the project. For example, while manufacturers would benefit from the acquisition of CAD/CAM plotters, automated cutting equipment and other advanced machinery, many lack access to finance and are unable to cover operating losses until positive cash flow is achieved. Rritje Albania’s resources must be applied prudently, cost-shared by beneficiaries and leveraged wherever possible to maximize return. The opportunity presented by managing with limited resources is to capitalize on synergies available by coordinating activities with other donor-funded, private and public sector initiatives. Besides stretching resources, big problems can often be tackled by many that could not otherwise have been taken on alone. Attentive to results and implementation process Besides managing for results using its performance-based monitoring plan (PBMP) to gauge progress towards objectives, Rritje Albania is attentive to the process of project management. The project staff is cognizant of best-practice project implementation practices and the various metrics used to evaluate contractor performance. In the work planning session held to formulate this year three work plan, all staff was familiarized with USAID’s Data Quality Assessment (DQA) and Contractor Performance Review (CPR) evaluation as well as Chemonics’ own Assess, Innovate, Measure, Share (AIMS) tool for measuring project excellence and its desk audit review of field office administration and accounting practices. In addition to quarterly performance reviews, weekly consultations between the project and USAID/Albania ensure activities are aligned with goals, objectives and implementation targets. Rritje Albania believes that paying attention to not only what is achieved but how it is achieved will lead to superlative results and satisfied clients. A5. Results Framework During the development of the technical proposal for Rritje Albania, our team designed a framework that aligned the activities, outputs and outcomes with the Economic Growth Objective of USAID’s Foreign Assistance Framework. All work conducted in this framework supports sustained, broad- based economic growth and poverty reduction. Rritje Albania contributes to this result through its program objective of strengthening the growth and competitiveness of non-agricultural enterprises and the causal models underlying USAID’s current EG strategy has guided the development of the project’s work plans to-date. 9 RRITJE ALBANIA – YEAR 3 WORK PLAN Figure 1 – Rritje Albania’s Contribution to USAID’s Economic Growth Framework USAID’s Economic Growth Objective Foreign Assistance Framework Based on the experience in the first year and one-half of project implementation, Rritje Albania proposed a revision to its results framework to streamline the direct and indirect results with the program elements and sub-elements of USAID Albania’s Economic Growth Area. The requested changes were submitted with supporting rationales in a revised Performance-Based Monitoring Plan (PBMP). The revisions requiring a contract modification were approved in February 2011. Rritje Albania Year 3 Results Framework USAID Economic Growth Program Area:Support sustained, broad-based economic growth and poverty reduction in Albania Program Objective: Growth and competitiveness of non-agricultural enterprises strengthened Key Indicators 1. Number of assisted enterprises that have increased sales of products and services in domestic and export markets 2. Percentage change in total sales by assisted enterprises in targeted municipalities 3. Value of sales of Albanian products and services (in export and domestic markets) by assisted enterprises 4. Number of jobs created in assisted enterprises PIR 3Workforce PIR 1Trade and Investment Capacity Strengthened PIR 2 Enterprise Productivity Increased Development Improved KRAIn v1e.1s:tmTreandt e & KRwAit h1 .i2n:teCrnoamtipolniaanl ce KRA 1.3:Improve KRA 2.1: Knowledge of KRA 2.2:Knowledge of KRpAre 3-e.1m:pElfofeymctievnetn aensds of use of ICT for trade productivity-enhancing best management knowledge and standards and regulations technical/ vocational training and investment technology increased practices increased skills improved improved programs improved Cross-Cutting Results Constraints addressed through gender-specific solutions and gender integration opportunities Environmental compliance mainstreamed Public-private partnerships established and fostered Since any one technical assistance activity can often be scored under different components when recording the indicator targets achieved, the project developed this work plan by first analyzing the five target sectors and determining what was needed to achieve project goals and objectives. The specific inputs and outputs for each project component and KRA are laid out in Section C: Detailed Work Plan by Project Intermediate Result. Please note that the results framework also recognizes the importance of the cross-cutting themes of gender, the environment and public-private partnerships and steps will be taken to ensure that they are integrated into all our interventions. 10 RRITJE ALBANIA – YEAR 3 WORK PLAN