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Arthur BayhanChief Executive Officer

Competitiveness Support Fund (CSF)

INITIATIVE TO UPGRADE

COMPETITIVENESS OF PAKISTANSECONOMY

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Competitiveness Support Fund Pakistan2

World Economic Forum - Global CompetitivenessReport (GCR)Improving Pakistans Competitiveness

Globalization is a reality that

countries can no longer escape

Competitiveness is the only way to

benefit from globalization and not

become a victim

Sustained

EconomicGrowth

Poverty

Reduction

Improved

Competitiveness

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Competitiveness Support Fund Pakistan3

World Economic Forum - Global Competitiveness Report (GCR)

Improving Pakistans Competitiveness

The World Economic Forums Global

Competitiveness Report Is the Most Influential

Ranking of Country Competitiveness and EffectsPakistans Image in the World Among Business,

Government and Financial Leaders

Understanding and Monitoring the Rankings is

Important

Improved Competitiveness Leads to Sustained

Economic Growth Which Has Proven to Be Effective

in Poverty Reduction

Sustained

EconomicGrowth

Poverty

Reduction

Improved

Competitiveness

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Competitiveness Support Fund Pakistan4

FINLAND - 2

PAKISTAN - 91

China - 54

TURKEY - 59

S. KOREA 24THAILAND - 35

S. Africa - 45S. Africa - 45JORDAN - 52JORDAN - 52India - 43 KAZAKHSTAN - 56KAZAKHSTAN - 56

USA - 6

World Competitiveness Ranking 2006(Total 125 Countries)

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Competitiveness Support Fund Pakistan5

Institutions= 79

Infrastructure = 67

Macro economy = 86

Market efficiency = 54 Technological readiness = 89

Innovation = 60

Business sophistication = 66

Education = 104

Global Competitiveness IndexComponents for 2006: Pakistan

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Global Competitiveness IndexComponents for 2006: Pakistan, India, Thailand

Institutions= 79 34 40 Infrastructure = 67 62 38

Macro economy = 86 31 88

Market efficiency = 54 21 31

Technological readiness = 89 55 48

Innovation = 60 26 33 Business sophistication = 66 25 40

Education = 104 49 42

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Competitiveness Support Fund Pakistan7

Global Competitiveness Index (GCI)

Global Competitiveness Report Has Two Indices

Pakistan ranked 67th on the Business Competitiveness Index of Michael PorterPakistan ranked 91st on the Global Competitiveness Index up from 94th place in 2005Lower rankings on the GCI reflect inclusion of low health and education indicators

Rank

2006

2005

Business Competitiveness Index (BCI)

Rank

Source: World Economic Forum, Global Competitiveness Report, 2006-2007

0

20

40

60

80

100

120

India China Sri Lanka Pakistan Bangladesh

3127

6457

6572

67 67

0

20

40

60

80

100

120

India China Sri Lanka Pakistan Bangladesh

108

100

4345

5448

79 80

91 9499 98

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Competitiveness Support Fund Pakistan8

CSF Action Plan to Improve Pakistan Ranking on Global Competitiveness Index

Pakistan Can Improve by 6-8 Rankings Per Year

Rankings Can Improve to 60-65 by 2010

2006 2007 2008 2009 2010

YEARS

RANKING

91

84

77

70

63

27%

33%

38%

44%

50%

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Competitiveness Support Fund Pakistan9

CSF Action Plan to Improve Global Competitiveness Index Rankings

Improving Pakistans Competitiveness

CSF Action Plan: Next Steps

1. Promote Broad Understanding and Support for GovernmentsEconomic Reform Agenda Provincial Government Leadership Workshops Presentations on Competitiveness to Business Leaders

Orientations for Local and International Press

2. Communicate Priorities to Relevant Ministries and Institutionsand Ensure Timely Provision of Data to International Sources

3. Ensure Accurate Implementation of Executive Opinion Surveyfor Next Global Competitiveness Report March 2007

4. Focus CSF Activities on High Impact Areas

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Competitiveness Support Fund Pakistan10

CompetitivenessSupport

Fund

Technical

Assistance:

Sectoral and

Regulatory

Matching

Grants:

ClusterDevelopment

Business Incubators/

Venture Capital

Operational Windows of the CSF

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Competitiveness Support Fund Pakistan11

1. Prepare and publish First Annual State of Pakistans Competitiveness

Report

2. Carry out Competitiveness Analyses to Recommend Specific Actions withHigh Potential Impact Beginning with:

Motorcycle industry

Food processing sector

Fishery

Automotive industry

Gender contribution to economic growth

3. Increase Public Awareness of Innovation and Competitiveness by Better

Preparing Journalists in Cooperation with Stanford University InnovationJournalism Fellowship Program

Technical Assistance Window

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HEC: Commercialize Research forKnowledge-based EnterpriseDevelopment

PARC: Agribusiness

Government of Sindh: Cluster Development

World Economic Forum

CSF Has Signed MOUs for Cooperation With:

CSF PARTNER ORGANISATIONSCSF PARTNER ORGANISATIONS

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Competitiveness Support Fund Pakistan13

Main Criteria:

High potential to generate jobs, income, exportsand investments

High potential to improve quality of products andservices

Benefits a cluster of firms in an economic sector

Amounts: US$20,000-US$125,000 (catalyticinvestments triggering large potential impacts)

Co-Financing Requirement: 50%

Participants: Private Sector, Government andAcademia: Triple Helix

Matching Grant Window

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CSF Uses the "Triple Helix Approach

CSF Uses the Triple Helix Approach

Matching Grant Window

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Commercialize applied research and link private sectorwith university research 20% private industry, 30% HEC and 50% CSF

Promote knowledge-based enterprise sector by facilitating

international patent registrations from Pakistanis andPakistani institutions

Organize for first time trade fairs highlighting science andtechnology-based projects developed at universities toattract private-sector investors looking for innovativeproducts and systems to commercialize

CSF-HEC Joint Initiatives

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Incubator Set-upGOP (Min. of Ind.)Funds for Business

Incubation

IBA/University/ Pub-Pvt. Consortia

Bilateral Agreementwith TOR

50%contribution50% contribution

ApprovalApplication

BusinessIncubator

Bilateral AgreementDetails of investment and contribution by applicant institutionsIndustry Specialization based on local competitive advantageAnnual Targets/outputCommitment for outcomeetc

GOP (Min. of Fin)Funds for Business

Incubation

LUMS/ IBA/ UniPub-Pvt. Consortia

Bilateral Agreementwith TOR

contributionApproval

Application

BusinessIncubator

Bilateral AgreementDetails of investment andcontribution by applicant institutionsIndustry Specialization based on local competitive advantageAnnual Targets/outputCommitment for outcomeetc

Business Incubator Window Concept

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Board ofDirectors

MANAGERS

Business IncubatorPotenti

IncubateDetailed Joint 2 yr.

Proposal withFunding & ValueAddn.Requirements

2 YearIncubation

Period

Approval

Create Commercial EntityWith 85% B.I.Board Ownership

Graduate after 2 yrs.Reclaim companyownership aftershare buyback

Business Incubator ServicesLinks to industry, universities,research institutesBusiness support services toenhance and develop businessDaily hands-on managerialmentoring (generalmanagement, finance,accounting, marketing,production, R&D)Financial resources for R&Dand initial marketing expensesAccess to potential privateinvestors and strategic partnersTraining and coaching ondealing with the potentialforeign investors and strategicpartners.

Funding$ 15,000150,000

Board ofDirectorsMANAGERS

Business IncubatorPotentialIncubate

Detailed Joint 2 yr.

Proposal withFunding & ValueAddn.Requirements

2 YearIncubation

Period

Approval

Create Commercial EntityWith 85% B.I.Board Ownership

Graduate after 2 yrs.Reclaim companyownership aftershare buyback

Business Incubator ServicesLinks to industry, universities,research institutesBusiness support services toenhance and develop businessDaily hands-on managerialmentoring (generalmanagement, finance,accounting, marketing,production, R&D)Financial resources for R&Dand initial marketing expensesAccess to potential privateinvestors and strategic partnersTraining and coaching ondealing with the potentialforeign investors and strategicpartners.

Funding$ 15,000

Business Incubator Window: Operations