Upgrading programmes in Morocco

With respect to the solar energy sector in Morocco, interviews with profes-sionals in the private sector and government agencies for industrial support mentioned the following challenges to industrial upgrading: the weakness of middle management and organisational structures; access to finance; the challenge for local SMEs to adjust their production processes to highly de-manding international quality standards for complex technologies and to ensure the quality of their own sourcing processes; as well as the general necessity to modernise production processes.

Following our interviews and insights into the operations of our interview partners, we furthermore observed that, so far, only a few Moroccan com-panies are active as project developers in the RE sector and none in the solar sector. Design and engineering capabilities are also limited, since most companies are active in the distribution, installation and maintenance of solar technologies. It is becoming clear that more companies would have to be active in the areas of design, engineering and project development for the local solar sector to evolve in the higher value-added parts of the value chain. Measures to address these challenges have to be adapted, on the one hand, to the overall business environment and, on the other hand, to the indi-vidual enterprise (UNIDO 2003).

Morocco has already established institutions and programmes aimed at SMEs upgrading. The Agence Nationale pour la Promotion de la Petite et Moyenne Entreprise (ANPME), in particular, plays the most important role by offering not only financial but also individual consulting services through their programmes Moussanada and Imtiaz.

Moussanada offers functional support programmes in order to enhance the efforts of SMEs to modernise and improve their competitiveness. ANPME provides funding for services up to 60 per cent, limited to 600,000 MAD per enterprise. The programme is available through three offerings: Moussana-da IT, aiming to accelerate the use of IT in SMEs; MoussanaMoussana-da Transverse,

German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 87 optimising support functions such as strategy, marketing and organisation;

and Moussanada Sector, fostering the business skills of SMEs, such as pro-duction processes, procurement, design and R&D (Fraunhofer ISE 2012, 163). According to ANPME, around 3,000 companies have profited from Moussanada so far.

Imtiaz is designed as a national investment competition for high-potential enterprises with a development project, offering tangible and intangible investment grants that correspond to 20 per cent of the total investment (Fraunhofer ISE 2012, 162). The overall objective is to increase the turno-ver, export activities, job creation or creation of value added as well as to introduce new technologies or structural changes within the specific sector (ANPME 2013).

ANPME offers individual consulting and support in developing an enterprise-specific “Plan de progress” through its programmes, which allows upgrading strategies to be customised to individual company needs. If interested in advancing its activities, it could thus look at the example of the Small and Medium Industry Development Organization (KOSGEB) in Turkey, which is known to offer comprehensive support for SMEs through its tailor-made support schemes and its broad and decentralised network of support institutions (see Box 12). KOSGEB also offers a decentralised support structure, which is a service that could be relevant to ANPME as well for making its support schemes more accessible to companies across Morocco. ANPME could further benefit from the example of KOSGEB’s programmes and develop cooperation with Moroccan institutions responsible for establishing business partnerships or clusters in order to develop and implement a more integrated strategy for increasing SMEs’ competitiveness.

Box 12: Small and Medium Industry Development Organization in Turkey

KOSGEB was established in 1990 as a non-profit, semi-autonomous organisation under the Ministry of Industry and Trade, with assistance from the United National Industrial Development Organisation (UNI-DO). The agency’s task is to improve the efficiency of SMEs and to in-crease their competitiveness. For that purpose, KOSGEB offers tailored technical assistance programmes, including skills upgrading and accel-erated training; promotes closer linkages between larger manufacturing

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firms and small enterprises as subcontractors or ancillaries; disseminates relevant information to SMEs; supports innovations; encourages entre-preneurship; and directs and orients investments.

KOSGEB is mainly composed of two bodies: policy-maker units and service providers. The policy-maker units provide data analyses and reports on enterprises, conduct studies and market surveys, search and implement new financial models, and analyse and meet the training and consultancy requirements of SMEs. The service providers – Enterprise Development Centers, Technology Development Centres and Synergy Focuses – work directly with SMEs ; strengthen basic relations between industry and government; provide support for KOSGEB; implement pro-jects; provide several test and analysis services for SMEs; and facilitate the establishment of laboratories for SMEs in industrial zones. The 35 countrywide Enterprise Development Centers implement projects and have face-to-face communication with SMEs. KOSGEB’s 20 Technology Development Centres function as “Business Incubation Centres” aiming to support technology-oriented development. Their main goal is to de-crease the initial costs of start-ups and the failure risks of a developing enterprise.

Support mechanisms offered by KOSGEB service providers can be clas-sified into two groups: support provided under a) KOSGEB Support Regulation and b) SME Credit Support Mechanisms, such as credit pro-grammes for export promotion, IT infrastructure or new employment.

Assistance is tailored to specific enterprise needs through the develop-ment of an individual Strategic Road Map for each firm that is granted access to KOSGEB services. KOSGEB offers a great variety of different support schemes and strategies that target not only the enhancement of individual firms but also support the creation of business linkages, busi-ness clusters and incubators. It is thus able to offer more comprehensive support for SMEs in the process of industrial upgrading.

Source: KOSGEB (2012), YOIKK (2013)

ANPME’s activities show that Morocco has taken important steps to create an institutional support system for the industrial upgrading of SMEs. People in the public and private sectors alike who were already familiar with these institutions and programmes confirmed their importance during interviews,

German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) 89 but they also mentioned that the support schemes could become simpler and more visible for companies active in the solar energy sector.³⁷ “Government support is existing and is sometimes effective, but could be simplified” said an economist at a Moroccan research institute with respect to ANPME and CMI.³⁸ So far, however, no company in the solar energy sector has benefited from these programmes, although some enterprises enrolled in Moussanada could – according to ANPME – enter the solar value chain in the future.

The reasons why companies in this sector have not used some of ANPME’s programmes are not evident. However, interviews with professionals in the private sector suggest that some of these services are not visible enough and that financial support for training, for example, requires a lengthy period for processing. This suggests that existing programmes could benefit from further improvements.

The absence of solar companies in these programmes also suggests that, so far, they are not benefiting from measures to bring their projects up to in-ternational quality standards and to have their products certified (Cammett 2007, 1890). To become internationally competitive, however, companies have to offer solar products that adhere to high-quality standards and, thus, should be instructed in a systematic manner on how to adapt to standardisa-tion and quality-management schemes specific to solar technologies, such as the Solar Keymark Certification³⁹ (GIZ 2013).

There is, however, a recent project by the German Physikalisch-Technische Bundesanstalt (PTB) in cooperation with ADEREE (as well as stakehold-ers from Tunisia, Algeria and Mauretania) aiming at developing a nation-al qunation-ality infrastructure for solar energy. In the beginning, the project will concentrate on SWHs and will support: the development of the necessary competences related to solar energy among the national institutions, the en-hancement of the evaluation and testing of SWHs, and awareness-raising

37 A financing mechanism that would help SMEs to hire consulting companies to improve their management processes was proposed by a big international electricity infrastructure company active in Morocco.

38 Interview with a research institute in Rabat on 25 March 2013.

39 Solar Keymark is a certification scheme created to certify solar thermal products of high quality. It aims at reducing trade barriers and promoting the use of high-quality products.

It is a voluntary third-party certification mark that demonstrates to end-users the con-formity of a solar thermal product to the relevant European standards as well as additional requirements. This certification scheme is being used in Europe but is increasingly recog-nised worldwide (ESTIF 2013).

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about the importance of quality infrastructure among public and private actors (PTB 2012). Such programmes offer an opportunity for Moroccan companies to benefit from an established quality infrastructure through test-ing and certification institutions, which are ultimately conducive to indus-trial upgrading.

Furthermore, reference was made to the need for a clear road map for in-dustrial upgrading, similar to the one applied in other sectors in Morocco such as automotive and aeronautics. Thus, it would be advisable to develop a road map for upgrading the solar sector, as existing programmes and strategies target companies in general and might not be equipped to help companies overcome specific challenges with respect to solar technologies.

In order to enhance design and engineering capabilities, a series of explicit training measures adapted to the company’s context have to be conducted.

This is a matter of purposeful investment by the enterprise (Bell 2007, vi) and could be facilitated by public institutions through targeted financing support for companies conducting such training activities.

Whereas training measures that stimulate learning opportunities can be con-ducted by the individual company, design and engineering capabilities can be enhanced further through business linkages with leading firms in the sec-tor, since they can also incorporate training and learning activities centred on these capabilities (Bell 2007).

Large local companies could direct their activities in the solar sector to-wards project development, since they have the capabilities to move into design and engineering. Interviewees from the public sector suggested that this would be an important step for developing an industry, as there is still a place for Moroccan companies in project development, whereas in other parts of the value chain it is difficult to compete with leading international companies.

Finally, for getting SMEs interested in joining upgrading programmes, a market has to be created for solar technologies, and the upgrading measures have to be targeted towards the requirements of that market (e.g. public tenders).

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5.2.3 Policy recommendations

• Enhance the visibility of existing and well-functioning SME upgrad-ing programmes such as the programmes of ANPME.

• Target companies from the solar sector with specific and coordinated upgrading measures that address the sector-specific challenges.

• Support companies in adopting sector-specific quality standards.

• Create a domestic market for solar energy so SMEs can adjust their upgrading process to a specific demand.

• Support enterprise-centred measures (both financially and through consulting) for building design and engineering capabilities.