Observations on formal BDS markets in Asia, by Dorothy Riddle, 2000

Description
The consultant studied the business services sectors in Indonesia, Malaysia, and Viet Nam to highlight the common characteristics of formal business services markets. A macro analysis was conducted using available employment, services trade, GDP, and production statistics. Services providers and users were surveyed individually while focus group discussions and key informant interviews helped both to identify market dynamics and the most important business services and to ensure the usefulness of the questionnaires.

Methods for info gathering
Secondary source research, Focus group discussions, SE survey, Provider survey, Key informant interviews

Summary of results
· Most BDS providers are themselves small firms that need a full range of business services.

· BDS suppliers already exist in developing countries and donor-funded programs (market research, training, business consulting) may create competition that undermines their ability to survive and thrive.

· In addition to competition from NGOs and government, BDS suppliers also face competition from in-house service provision. Potential clients are often unaware of economic costs of "money saving" activities such as diverting skilled resources from revenue generation to self-production of support services.

· While acquisition of specialty service inputs is critical to competitiveness, it is difficult for many BDS providers to develop the demand needed to support specialization. Many solve this by exporting their services.

· Although training services sureveyed SMEs rated training service from private sector firms highest, many used other providers

· Service quality is more important than cost, the issue being value for money spent. Foreign suppliers do not necessarily mean good quality.

· Local BDS firms often have weak capability to properly assess client needs and adapt services to meet them.



Associated Activities and Documents
Market Assessment
»	ILO Indonesia 2000
Synthesis Documents
»	Hanoi DC Conference, 2000