Bangladesh Small & Cottage Industries Corporation (BSCIC) Bangladesh Small and Cottage Industries Corporation (BSCIC) is the

prime mover organization entrusted with the responsibility of development of small and cottage industries (SCI) in Bangladesh. It is an autonomous corporation under the Ministry of Industries and was established by an Act of the parliament in 1957. It is the successor organization of EPSCIC. BSCIC Provides Pre-investment counselling Post-investment extension services Technical information Design and prototype of handicrafts Industrial profiles and fact sheets Marketing information Infrastructural facilities Skill development training Entrepreunership developement training In-plant advisory services Credit facilities etc. Vision VISION - 2025 Introduction Bangladesh Small & Cottage Industries Corporation (BSCIC) was established in 1957 by an Act of Parliament. The establishment of BSCIC was in recognition of the need for a specialised agency to promote the development of Small, Medium & Cottage Industries (SMCIs) in the manufacturing sector through the provision of advisory services, fiscal and financial assistance, infrastructural facilities, market access and other support programme. BSCIC strives to create resilient and efficient SMCIs, able to compete in a liberalised market environment. SMCIs have to be efficient and knowledge-driven, including using ICT to be globally connected and accessible. The Corporation will promote SMCIs to be an integral part of the countrys industrial development capable of producing high value-added manufacturing product & services. BSCIC will serve as the national focal point for the over all development of SMCIs in the country. The principal goal of the Bangladesh Govt. economic policy is to reduce poverty which is coherent with the MDGs. For achieving the above goal economic growth policy is adopted by the Govt. in the macro-economic policy. In view of the above the BSCIC Vision, Mission, Goal, Strategy, Initiative, Challenges, Needs, Objectives, Services, Function and Programmes are fixed. Vision To be the leading Organisation in Developing Small, Medium & Cottage Industries that contribute to the economic growth and to create vibrant and resilient SMCIs that enhance Bangladesh is competitiveness in the world market. To transform SMCIs into an economic powerhouse of the country by 2025. Mission To materialize the vision following mission may be followed :

i) Providing latest technical and managerial assistance to enterprises and communities for the improvement of productivity, quality and environment. ii) Promoting strategic alliance with clients as well as national and international professional bodies in pursuit of economic development. iii) Molding a work place that en courages creativity, innovation, professional growth and positive value. iv) To instill and eventually ingrain deeply the concept of learning organisation into SMCIs and encourage them to be export-oriented. v) Sharing the rewards of own endeavors with our communities, customers, employees, suppliers, management and our stakeholders. Goal a. To assist private entrepreneurs for establishing new Small, Medium & Cottage Industries (SMCIs) unit. i) Total : 0.409 million unit ii) Small Industry : 0.086 million unit iii) Medium : 0.008 million unit iv) Cottage Industry : 0.315 million unit b. To create labour force employment facilities through new Small, Medium & Cottage Industries (SMCIs). i) Total : 3.06 million ii) Small Industry Sector : 1.54 million iii) Medium : 0.52 million iv) Cottage Industry Sector : 1 million v) Percentage of new labour force employment : 3.80% (Total L/F 2005-2025, will raise 59-80 million) vi) Percentage of total labour force employment : 8.28% (6.63 million) c. Contribution to GDP : 30% (Tk.1050 billion ) (To raise GDP in Small, Medium & Cottage Industries sector from 5% to 30%) d. To raise daily income of employed poor labour force people in SMCIs sector from 1 US$ to 3 US$ through poverty alleviation programme/projects undertaken by BSCIC and through private sector investment. Cumulative Small, Medium & Cottage Industry unit and employment will reach by 2025 (figure in million). Category of Industry Unit Employment Small 0.171 2.915 Medium 0.013 0.863 Cottage 0.904 2.852 Total 1.088 6.630 Objectives

The BSCIC functionaries are deliberated up on the organizational objectives having rellevance to the BSCIC charter (Act xvii of 1957) and subsequent jobs assigned to the BSCIC. The objectives and key results areas have been identified and described below: Objectives Key result areas 1. TO ENSURE a. Promoting the establishment of industrial units, with ACCELERATED priority for agro-support, agro-processing, import GROWTH OF substitution and export oriented enterpriese utilizing THE SMALL, indigenous raw materials. MEDIUM AND COTTAGE INDUSTRIES IN BANGLADESH (CREATION OF NEW CAPACITY) b. Promoting establishment of small, medium industry through ancillary units and sub-contracting arrangements. c. Promoting area/regional development through establishment of small scale industries on the basis of locally available raw material, skills and growth potential as per district development plans. d. Providing information to target people on industrial investment opportunities through mass media (including Radio, Television and News Papers) and publications. 2. TO INCREASE a. Assisting existing enterpriese to operate at optimum PRODUCTIVITY capacity. OF THE EXISTING SMALL, MEDIUM AND COTTAGE INDUSTRIAL UNITS IN BANGLADESH (RESOURCE MAXIMIZATION OF EXISTING CAPACITY) b. Providing counselling and extension service including in-plant-advisory services, group services and training programmes on technical quality control, marketing and financial management exports. c. Supplying statistical information and operational data

3. TO ENSURE OPTIMUM UTILIZATION OF FINANCIAL RESOURCE

for inter-firm comparison on productivity. a. Providing advisory services to the enterpreneurs for proper utilization of financial resources of their industrial units.

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b. Proper financial analysis and pre-investment feasibility for proper utilization of loan and equity financing resources. c. Ensuring timely loan recovery for further investment. TO PROVIDE a. Setting up the infrastructure such as Industrial Estates INFRASTRUCand Common Facility Centres, Design Centre etc.and TURAL ensure their optimum utilisation required by the FACILITIES industrial units. b. Maintaining efficiently the facilities such as electricity, gas, water, roads etc. for uninterrupted production of the units set up in the Industrial Estates. TO CREATE a. Assisting in the creation of market (local and foreign) AND DEVELOP through appropriate sales promotion measures. MARKETING FACILITIES INCLUDING MARKET INFOR-MATION FOR PRODUCTS OF SMALL, MEDIUM AND COTTAGE INDUSTRIES b. Providing assistance and advisory services to small enterprises for maintaining quality product by fixing appropriate standard. TO INNOVATE a. Collecting and disseminating information on new and PRODUCT appropriate technology for the sector as a whole. PROCESS AND TECHNOLOGY b. Promoting research work for the development of product, process and technology. c. Making and supplying designs and prototypes for the cottage industry sub-sector. d. Designing and supplying prototype of product, machinery, equipment and tool for small industries. TO ENSURE a. Developing knowledge and skills of artisan/ crafts, DEVELOPMENT technicians and managers through training. OF SKILLS

b. Designing, developing and conducting entreprenuership development programme for small and cottage industries. 8. TO HELP a. Promotion of pilot projects in association with private SOCIOentreprenuers in areas or fields of national interest ECONOMIC where private investment is shy and hand them over at DEVELOPMENT an appropriate private time. b. Creating linkage with Youth Welfare, Women affairs, Social Welfare and other organisation engaged in the promotion of income generating activities, with the aim of achieving integrated rural development. c. Assisting and advising in the promotion of industrial homes adjacent to industrial areas for the Welfare of family members of industrial workers. d. Generating income among disadvantaged target people and in geographically under-developed areas by setting up cottage industries. In the light of globalization, BSCIC refix its objectives in the following manner : i) To create a healthy business environment that promotes and supports the establishment and growth of SMCIs. ii) To nurture high growth, resilient, innovative SMCIs that adopt best business practices. iii) To enhance the technological, managerial, marketing, financial and entrepreneurial capabilities of SMCIs to become globally competitive. iv) To encourage enterprises and entrepreneurs to harness technology and knowledge in developing high value-added products and services and moving up the value chain. v) To facilitate and assist SMCIs to gain access to market by forming linkages and business opportunities network, both locally and internationally. vi) To foster the formation of a competitive and vibrant supply base to attract FDIs into the country.

Strategy Strategy 1: Upgrade technological and management capabilities of SMCIs. Develop an enterprise diagnosis system as a tool for the promotion of SMCIs. Enhance consultancy system for business improvement and problem solving. Support the adoption of modem facilities and management systems such as ISO 9000 and TQM. Support the efforts of companies to improve their product quality. Improve the efficiency of R&D institutes and facilitate their networking with private companies. Strategy 2: Develop SMCIs. entrepreneurs and human resources Foster new entrepreneurs and incubate existing entrepreneurs. Enhance the efficiency and flexibility of training services. Improve the efficiency and coverage of industrial skill standards and certification systems.

Improve educational curriculum and teaching methods to meet industry needs. Strategy 3: Enhance SMCIs access to markets Improve SMCIs access to government procurement systems. Promote subcontracting and linkages with large enterprises. both domestically and internationally. Strengthen the export promotion activities of SMCIs Promote cross-border trade and linkages with trading companies. Strategy 4: Strengthen financial support system for SMCIs Expand and develop credit guarantee system for' SMCIs Establish venture capital funds for the development to SMCIs Establish SMCIs Promotion Fund. Strengthen financial advisory services for' SMCIs Strategy 5: Foster an environment conducive for business development Establish and strengthen local information center for SMCIs Develop mechanism to review and revise laws, regulations and administration procedures to redress problems facing SMCIs Strengthen support to equip SMCIs to prepare for the IT revolution. Improve the efficiency of various distribution channels. Strengthen the planning capabilities and services of regional and local authorities and organizations. Promote the establishment of SMCIs parks. Strategy 6: Develop micro-enterprises and community enterprises Incubate "strategic" micro-enterprises and community enterprises. Promote commercialization of indigenous know-how. Upgrade the managerial capabilities of micro-enterprises and community enterprises. Encourage the formation of business associations among these enterprises. Strategy 7: Develop networking among SMCIs and clusters Conduct studies of various industrial clusters to promote their efficiency collectively. Support pilot projects to develop industrial cluster(s) in each region. Encourage the formation of business associations to serve as platforms of fostering cooperation among members. Provide infrastructural support and financial incentives to promote the development SMCIs Key Issues and challenges The following are key issues and challenges faced by SMCIs. Liberalization and Global competition Multilateral and regional trade and investment liberalization policies have made markets more accessible and competition more intense among local producers. It is becoming increasingly imperative to be internationally competitive in order to function effectively even in domestic markets. In a dynamic environment market by fast technological changes, achieving and retaining competitive edge is a necessity and a challenge. Many SMCIs could be efficient exporters if they were properly motivated and assisted in acquiring the necessary skills supported by a strong infrastructure and given the right advice and assistance.

New Emerging Technologies. Most SMCIs donot see the importance of ICT applications in their daily operations. They do not realize that emerging technologies and advances in ICT have contributed to productivity growth and economic competitiveness. The increasing use of ICT in business is making it possible for large companies to secure multiple suppliers. These suppliers have to meet the requisite product quality, cost and speedy delivery with in a compressed time frame with competitiveness being increasingly determined by leading edge technologies, it is crucial that SMCIs rapidly develop their capacity to adopt and adapt technologies that are appropriate to their industries. Skill Development. Most SMCIs are labour intensive. Skills upgrading and knowledge acquisition, which are all critical to long term competitiveness. SMCIs have a negative attitude towards investment in training. They fear losing well trained staff to other companies and their investment. There is a need to change this perception and mindset and to inculcate a training culture among SMCIs. The in sufficient supply of skilled and knowledgeable workforce impedes output expansion. Therefore, the ultimate objective is to produce skilled and knowledgeable workers for SMCIs to be competitive in quality price and delivery. Finance. The most cited problem confronting SMCIs is the inadequacy of finance. A key reason is SMCIs are seen as high-risk by the average banker, SMCIs traditionally finance their operations through own savings, loan from families and friends, as well as supplier credits. New start-ups face difficulties in securing credit, as they have little collateral and no track record. In addition, their is the problem of long processing time for loan application, while their shoud be a balance between meeting the needs of SMCIs and prudent banking practices. The solution still lies in improving access to institutional credit for SMCIs. This is a critical factor because a loan delayed is vartually a loan denied. Information. The ability to seek and apply information in business operations will help SMCIs to be efficient in the new business environment. As knowledge is pivotal in modern manufacturing, SMCIs need to acquire critical knowledge and skill to mermain competitive. Technology and knowledge investments have provided significant competitive edge to companies especially in design, product research, process, innovation and management information system, SMCIS thus, need a referal centre to which they can turn for information and advice on the various areas concerning their operations. SMCIs need the following policy support * Ensure flows of public expenditure (research, extension, training and market promotion) * Stimulate private investment through proper guidance and pre-investment counseling. * Rationalize tax structure (by raising ceiling of exemption limits as regards taxation and by lowering the VAT rates ) * Provide marketing assistance * Stimulate sub-contracting activities (support for ancillary activities and producers of spares and machinery need to be ensured in light of GOBs sub-contracting policy, including through procurement and purchase policy of the government). * Design a credit guarantee scheme for agro-based small-scale entrepreneurs who do not

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have the necessary collateral. Create a database for the small and medium scale industries Channel funds to the small entrepreneurs without collateral through innovative banking. Increase of the limit of collateral free loan and keep interest rate low 10%. Formation of cluster village Establish a training and design centre. Ensure more collaboration/partnership among the organization/agencies.

BSCIC TO PROVIDE SERVICES TO ACHIEVE GOAL The BSCIC provides the following services to the private sector entrepreneurs of the three clientele groups (educated solvent, semi literate and skilled people). Pre investment counselling Industrial information dissemination Scouting for entrepreneurs Extension services Entrepreneurship development Project appraisal (technical, financial, economic and management) Feasibility study Credit arrangement Sanction of enterprises Supervision of project implementation Infrastructure development Management and skill development Product development Design and prototype development and distribution Raw material arrangement Diagnostic studies Sub-contracting arrangement Innovative production process and technology Quality control Market survey of products Marketing (including export) arrangement Literature on products and process from home and abroad Research and development Inter-organization co-ordination. PROGRAMME (INDICATIVE INVESTMENT OUTLAY) i) Impart Entrepreneurship Development Programme : 1.00 million (EDP), Total nos. a) EDP(Management) : 0.91 million nos. b) Skill development(trade-base) : 0.09 million

ii) Total investment outlay iii) Private sector investment on SMCIs (through entrepreneurs equity, NCB, Private Foreign Commercial Banks, Financial Institution and Leasing Company) Public sector & private investment (SMCIs sector projects through ADP, fund from GOB & Donors participation)

nos. : Tk. 247.5 billion : Tk. 200 billion

: Tk. 47.5 billion

Indicative sector for public & private investment (joint venture GOB and private participation, NCBs,PCBs and Foreign Commercial Banks) Booster sector for private investment Electronics and electrical, software, software development. light engineering, agro-processing and related business, leather and leather goods, knitwear and readymade garments, plastic and other synthetics, health care and diagnostics, educational services, pharmaceuticals/cosmetics/ toiletries, fasion rich personal effects, weare and consumption goods. Public sector programme Garments Shilpa Park Active Pharmaceutical Industrial Park Automobile Estate Plastic Estate Leather Industrial Estate Advanced Technological Support Programme for SMCIs Universal Salt Iodization Project Industrial Estate Extension Poverty Alleviation Programme(through micro-credit in SMCIs). Special Economic Zone Engineering & Workshop Estate Electronic complex (vertical type estate) Printing and publishing estate Dry fish processing project. Human Resources Development Programme at grass root level (skilled and managerial) Minimize pollution through establishment of treatment plant in the existing and proposed industrial estate/park Industrial estate/park for women (vertical or horigental) Organizational network BSCICs existing organizational network and structure should be strengthened and recruit more

talent new manpower to carry out BSCICs mandate and vision. Infact promotional and development activities of BSCIC at present are widely spread out all over the country. Its organizational network linked with 64 district offices each named Industries Service Centre(ISC), 4 Regional Offices located at main 4 administrative divisions and one headquarter office located in the Capital City, Dhaka. Altogather consisting of 1400 Govt. approved manpower strength of which different level Senior Officers 648, Staffs 752 persons constitute BSCIC structure/organogram who are performing BSCICs functions. Board of Directors is the supreme authority for taking organizational decision. Chairman is the Chief Executive of the organization and 6 Directors under him are responsible to making policy and to operate, monitor and controll all of the BSCIC activities and to administer their respective department. To face globalization challenges and Govt. reform policy presently BSCIC needs rational and effective manpower structure with smart logistic support containing ICTs and E-governance facilities. By introducing reform measures BSCIC could take more initiatives for generating its earnings, where cost minimizing techniques and more income scopes may be introduced. This new era of BSCIC will be reducing GOB revenue burden and ultimately BSCIC will able to sustain on their long path. Indicative avenues for earning sources are mentioned in the following : Commercialization of BSCIC property. Approxmately 5 percent development charge from plot recepients of industrial estate. Fees collection from sub-contracting arrangement. Sales proceeds from market information like market study etc., Promotional services, tender documents, forms and other services etc. Earning from SCITI training services like training fees, consulting services. Earning from Design Centre by selling Design, Prototype and Expertriate knowledge etc. To explore more avenues for earnings. SCITI & Design Centre might have two separate accounts which will earn and meetup their recurring expenditure. Definitions: Small manufacturing industry : Fixed investment less than Tk. 15 million, exclusion of land and factory building Small non-manufacturing industry : less than 25 full time employees. Medium manufacturing enterprise : Fixed investment greater than Tk. 15 million but less than Tk. 100 million. Medium non-manufacturing enterprise : Less than 100 fulltime employees. [[ Cottage Industry : Covers household based units operated mainly with family labour. Definition may be change time to time as declared by the government industrial policy. Important assumptions : Skill Human Resources, Optimum supply of power, Fuel, Gas,Desired infrastructure facilities, source and application of fund remain available. Conclusion :

Success of SMCIs development in Bangladesh needs several inputs. Such as effective policy modus operandi upto date knowledge and information related to business and industry, efficient personnel, capital fund, dependable infrastructures, appropriate and competitive technology and inter-ministerial ties with close co-ordial relationship is very much needed for achievement of goal and vision of BSCIC. Every input must be utilized in the proper time in appropriate way so we can expect the efficient output.