Latin America needs high quality exports to compete on a global scale

After a two-year recession period, growth in Latin America rebounded in 2017, albeit at a modest 2-percent rate on average. But in light of the global volatility and shifting international trade dynamics, the question that remains among the region’s economists and governments is how to maintain this recovery trend in the medium and long term.

There is global consensus – especially in the region – that growth cannot be sustained indefinitely merely by exploiting raw materials, and that thriving productive sectors and a solid entrepreneurial structure are crucial to ensure sustainable economic development, encompassing the vast majority of the population.

Latin America’s efforts to increase productivity and compete with guarantees at a global scale include the Exporting Excellence Enterprises (3E) program, which links public and private sectors, academia and entities promoting industrial development and foreign trade in order to create innovative business models to boost the competitiveness of local companies in international markets.

The 3E program was initially implemented in Colombia, and promotes interest of anchoring companies and startups in products that are not yet domestically marketed, so that they can contribute to the process of integrating industries into global value chains. The goal is to create virtuous cycles in competitive sectors with high growth potential, ensuring that finished products cover a significant percentage of domestic production.

“The challenge for exporters of non-traditional products and services is to innovate and streamline their business models, in order to compete with excellence at a global scale, while generating quality jobs”, said Juan Carlos Elorza, Director of Productive and Financial Development of CAF.

We need to develop a unified language and body of knowledge, not only about exported products – a product-centered approach to exports–, but also about the components of the export business model of the organization – strategic approach to the export business model –, explained Elorza.

Experts claim there are several reasons why companies should streamline their business models:

• To restructure how profits are generated
• To organize their business models with best corporate practices
• To analyze global trends that can transform their business
• To become a game changer in their industry or market
• To build a new business based on an existing model

 3E Program Results

The program has already benefited 61 companies in Colombia and 10 in Ecuador, within the agribusiness, manufacturing, and services sectors. These companies received strategic support to improve or restructure their export business model, adopt a shared visual language, accelerate their growth and international trade position, attract investment and financing, promote insertion into global productive chains, or to adopt the use of innovation tools.

In Colombia, the program has been implemented by the national government, through Bancoldex, and was recently handed over to ProColombia, as part of its productive transformation and innovation policy, after reaching successful results in the first two phases. In Ecuador, the first phase was supported by Fedexpor and ProEcuador.

About the 3E Program

The 3E program implements and develops methodological know-how to provide customized strategic support to exporting companies, helping them generate and develop their own capacity to build, improve, innovate, or revamp their International Business Models. The program gives companies the tools to help them compete with excellence, through a profitable, responsible and sustained approach.

The 3E methodology is projected to be developed over a six-month period, in the following phases: