Consulting Firms Network to Boost Regional Trade and Expertise in Southeast Europe
Southeast Europe Meeting of the World Economic Forum
In its short 18 month life, the TRADE Network is already yielding clear benefits of increased cooperation among consulting firms in domestic as well as in the Southeast Europe Regional market. Through the development of partnerships and increased exposure and training in internationally accepted best practices, member firms and their clients are competing for more sophisticated clients than they were able before. The 26 consulting firms that make up the TRADE Network have already experienced $1.8 million in new revenues and cost savings from a U.S. Government investment of $2.5 million.
Here is an example of the benefits that the Network has provided to businesses in SE Europe through increased trade linkages and cross border cooperation:
CM Expert, a project management firm in Croatia, was interested in bidding to become the local project manager for the construction of the new U.S. Embassy in Sofia, Bulgaria. Although the firm had won a similar contract for the construction of the new U.S. Embassy in Zagreb, CM Expert did not have a presence or experience in the Bulgarian market. CM Expert was able to establish a joint venture with a Bulgarian member of the Network, V-Communications, and successfully win the contract to manage the construction of the new Embassy in Sofia . Both firms will earn fees in excess of $100,000 for the completion of the project.
What is the TRADE Network? The TRADE Network is a regional cluster (network) of 26 for-profit business consultants in Bulgaria, Croatia , Hungary and Romania that provide expert business advice or training to small and medium enterprises (SMEs) in Southeast Europe . Each of the 26 firms have consulting specialties within the areas of market research, law, project management, information technology (IT), human resources and training, and public relations and advertising. These firms and their clients have already developed close working relationships and are working on a number of joint venture both domestically and in SE Europe. USAID, through the Citizen Development Corps (CDC) and the International Executive Service Corps (IESC), is also assisting these firms upgrade the quality of their services to meet international standards, develop new products to better serve their clients, improve operations, and facilitate increased domestic and cross-border cooperation.
In the first eighteen months of the program, there have been impressive results from USAID's $2.5 million investment in the program. Through TRADE, member firms have realized approximately $1.8 million in revenues and cost savings attributable to the assistance of volunteer expert advisors from CDC and IESC, as well as through the development of closer ties with other members of the Network. In addition, the members and their clients have benefited from $470,000 of donated expert advice from the expert advisors.
As impressive as these financial results are, the most significant benefits are have a broader impact. First, CDC and IESC are working with local businesses to help the local economy. The consultants that are members of TRADE were in business before USAID assistance and will continue to be in business when our assistance ends. This means that are assistance is focused on making the members of the Network and their clients more competitive and profitable, not dependent on donor assistance.
Secondly, the program contributes to regional stability by building cross border ties between businesses in Southeast Europe. TRADE builds business relationships that would most likely not developed without USG assistance. The relationships are reinforced when the businesses are able to be profitable through cooperation and joint ventures. Since they are reinforced through mutually beneficial business ties, this activity has the potential to cross many boundaries that have the source of ethnic and religious conflict in the region.
It is with this last point in mind that we are looking to expand to other countries in the region over the next six months. Possible candidates are Serbia and Montenegro, Macedonia, Slovenia and others.
Some additional success stories:
ROMANIAN AND BULGARIAN FIRMS EXCHANGE EMPLOYEES
Two market research firms – Daedelus in Romania and Market Test in Bulgaria – will exchange a few employees in May introduce them to each others’ business. In addition to learning new market research approaches, the exchanged employees will help the clients of the host firm look at opportunities in the other market. For example, the employees of Daedelus will work with the clients of Market Test to look at potential markets in Romania. Not only does this exchange of staff strengthen the capacities of both consulting firms, but it also helps cement their future joint efforts. As a result, they are able to double the pool of potential business that was available to either firm before.
NEW SERVICES AVAILABLE TO SERBIAN FIRMS:
ConsulTeam, a Bulgarian TRADE partner working in the area of human resources, established an office in Serbia in August 2002. It’s presence in Serbia made it the first local HR company of its kind on the market. Since its opening, the staff grew from three to seven, and with a relatively small investment of $30,000, the office is already breaking even. The operation is making $10,000 worth of sales a month and it is expected that sales will rise to $20,000 a month by autumn 2003. In addition to serving small and medium enterprises (SMEs), the new branch has been successful in securing large multinational clients as Coca Cola and 3M.
NEW SOPHISTICATED PRODUCTS OFFERED TO SMEs:
The program is helping to bring international level of services that is affordable to SMEs. For example, thanks to the program, a TRADE Network Partner in Bulgaria , Market Test is now offering a new sophisticated market research tool previously not available on the Bulgarian market, the Target Group Index. It is syndicated market research that is collected regularly and on a large scale, but is sold off in pieces that are tailored to the needs of each buyer individually. In the first few months over 10 local companies have bought this new product for over $250,000.
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