Sustaining Competitive and Responsible Enterprises in Indonesia

1. Being more vulnerable to external shocks, Small and Medium Enterprises (SMEs) in developing countries have been finding it difficult to sustain operations due to the global financial crisis and the quality of their jobs is being compromised in the process. The large majority of employment for both women and men is found in SMEs and the key to sustainable economic development that leads to effective poverty reduction lies in competitive and growing SMEs. Current research is showing that innovations in work organization, continuous workplace learning, good labour-management relations, and respect for workers’ rights are important ways of raising productivity while also promoting decent work. The broad problem that this project will address is how to minimize the impact of the financial crisis by fostering responsible and thus sustainable workplace practices – economic, social and environmental – in SMEs in order to improve their productivity and competitiveness in a manner that contributes to sustainable economic development. 2. The development objective of SCORE is that SMEs are more sustainable through being cleaner, more productive and competitive and provide more sustainable and decent employment. To achieve this, the project is expected to have achieved the following concrete outcomes by the end of the two year project: a) Industry associations can market and coordinate enterprise upgrading services to their local members. b) Service providers can effectively deliver training and advisory services for workplace upgrading on a commercially sustainable basis. c) Labour inspectorate services work with mass media to disseminate progressive workplace practices. 3. SCORE will be implemented in six countries, Colombia, Ghana, South Africa, Indonesia, India and China. The approach of the project is to, on the micro level through service providers provide training, counselling to upgrade enterprise competitiveness through good workplace practices; on the meso-level build the capacity among service providers and associations to deliver commercially viable upgrading services, on the macro level demonstrate that the approach is replicable on a national scale to other sectors and locations and on the meta level, finally, through mass media influence the behaviour of enterprise level practices. The project will work in sectors with high potential for employment creation. Focus will be on capacity building at the meso level rather than direct subsidies of enterprise training. A global component will coordinate the project and be responsible for knowledge sharing, global advocacy and introduction of the programme in new countries. 4. Each country will implement the programme in minimum one sub sector and at least two clusters targeting 10-15 enterprises in each cluster. Some countries such as India and China are expected to go substantially beyond this outreach level as a result of prior pilot projects. Based on the historic performance of SCORE’s predecessor the Factory Improvement Programme, FIP, the following overall impact is expected in participating enterprises: ¿ Business growth as a result of improved competitiveness and better access to markets ¿ Overall improvement in the culture of worker-management collaboration leading to continuous improvement as well as reduced labour absenteeism and turnover ¿ Improved quality in terms of reduced defects and improved on time delivery ¿ Improved productivity through better environmental management (reduced waste and energy consumption) and better workplace management (reduced labour accidents and sick leave) 5. The project supports the local DWCP in each country. It will work with UNIDO to revise and implement the capacity building interventions on productivity and environmental management. ITCILO will be the main partner for manual development and training of policy makers on the promotion of sustainable enterprises and the labour dimension of CSR both in the project countries and in Tu

Project symbol

INS/09/50/SWI

Admin unit

CO-Jakarta

Start date

01/05/2009

End date

31/03/2013

Total allocation

509441

Total expenditure

Status

Closed

509441

Development Partners

Switzerland, State Secretariat for Economic Affairs

Country/Countries

Indonesia

Outcomes

Employment Promotion