Methodology for the assessment of readiness by entrepreneurs, micro-, medium- and small-sized enterprises (MSMEs) to be included in export-oriented value chains in the sector of fruit and vegetable processing (VCRA – Value Chain Readiness Assessment)
Identification of the challenges encountered by MSMEs and entrepreneurs in the field of fruit and vegetable production and processing. Creation of a specially tailored system of improved technical support in the fields of accessing potential funding sources (domestic and international) for overcoming identified challenges. The general goal of the project is to increase competitiveness of Serbian fruit and vegetable producers and processors on the global market.
Competitiveness of MSMEs and entrepreneurs in the sector of fruit and vegetable production in the countries at the similar level of development as Serbia, is improved through interventions the aim of which is to decrease the costs of operation of this type of enterprises in the following areas: 1) strategic costs, 2) knowledge costs, and 3) transaction costs.
Depending on the obstacles faced with by MSMEs, suitable strategies of their overcoming are created. It has been established that the analysed MSMEs are exposed not only to the obstacles that lead to an increase in the costs of knowledge, but also those that lead to high transaction costs. Based on this conclusion, as a strategy to improve the competitiveness of MSMEs and entrepreneurs in the sector of fruit and vegetable production and processing in Serbia, it has been suggested to employ the strategy of their inclusion into export-oriented value chain.
The research resulted in the development of the following set of instruments: 1. Methodology for implementation of the process of assessment of MSMEs and entrepreneurs for inclusion into export-oriented market chains; 2. Checklist, and 3. The system of improving technical support services in the field of access to financing sources in overcoming the identified challenges in including MSMEs and entrepreneurs into the export-oriented value chains of fruit and vegetable processing.
The need of developing the aforementioned methodology occurred based on the analysis of primary and secondary resources, as well as in-depth interviews with representatives of the leading exporters in the sector of fruit and vegetable processing in Serbia. The goal of this methodology is to identify the potentials of MSMEs of being included in the fruit and vegetable export chains.
In order to identify potentials for the inclusion of MSMEs into export-oriented value chains, a checklist has been created which includes questions classified according to the fields of relevance for considering readiness for the inclusion into value chains, i.e. to assess the fulfilment of the criteria for MSMEs so as to be successfully integrated into value chains.
The project has identified the challenges that fruit and vegetable processing MSMEs are facing: low level of skills and management, low level of the workforce education, lack of high-quality standards, non-competitive prices, as well as insufficient access to buyers.
The suggested strategy of inclusion of MSMEs into export-oriented value chains generates positive effects, not only for the MSMEs, but also for leading exporters in the production and processing of fruit and vegetable in Serbia. By implementing this strategy, the leading exporters in the field of fruit and vegetable processing in Serbia could benefit from the advantages of the economy of scale, while the MSMEs for which it has been assessed that they are ready to be included into the value chains, would be able to benefit from the advantages of flexibility and proximity of contact with their clients.
For each enterprise analysed, it has been established not only its current readiness to be included into export-oriented value chains, but also the areas in which improvements are needed, as well as the intensity of efforts and resources necessary to make progress. Additionally, the established Methodology enables precise ranking of the analysed enterprises according to their potential of inclusion into export-oriented value chains. The readiness to be included into export-oriented value chains of fruit and vegetable processing has been defined based on assessments in the areas of management, innovation, finances, procurers’ management, process management and buyers’ management.