 A gentleman, if I could start with UK, when people voted just a minute ago, they didn't put management skills or technological skills too high there, both of which are part of entrepreneurship. And why is, what do you think of entrepreneurship being and why is it so important? Without any exception, the innovation is an engine of growth, key to successful development. And for innovation, entrepreneurship is absolutely needed. And for us, entrepreneurship refers to the capacity to put new ideas into practice, but also the capacity to manage enterprise operation effectively. And in observations, poor management is... We have a picture here, please. This is one of Tetsushi's pictures. Please could we have the picture of the two people at the lathe? There we go. Yes. This is a good example. The shop received a very big job. Everybody must be very busy, but only one person is walking. The one person is just watching, another person is hiding, the third person you can see on the right. So this is a really terrible situation. Another case may be shown by the next photo. The next picture of the stacks. There we go. Yeah. This must be... This is the factory, the government factory in Vietnam. Everything should be in the right place. This is... This is a big order for white t-shirts and how do you find them? Right? It takes a lot of time to find out the right thing. Okay. So, so entrepreneurship is important. But how does entrepreneurship... Tell me a little bit about how this fits into entrepreneurship. This is a management skill, right? Yeah. But management is very important to realize innovations. New product may be produced, but in order to produce new product, one has to develop new markets and one has to control the quality, one has to order the parts to the suppliers. Management is absolutely needed to realize... Holistic, so... Yeah. So not only technology, but management is very, very important. Are there any success stories you can use as an illustration? Yes. I have the favorite story of the government industry in Bangladesh. In 1979, there was no government factory in Bangladesh, but their company of South Korea decided to produce a government product in Bangladesh, in collaboration with Bangladesh Company. But there was no skilled worker, no experienced manager, so their company has decided to invite 130 young newly recruited workers for training from sewing to managing quality control, marketing, exporting, et cetera. And after eight months, 130 people returned to Bangladesh. But in a few years, all those 130 people decided to quit the job and establish new businesses. And then those workers working for these 130 companies also quit the jobs. And then they created a new one. In this way, huge industrial cluster is formed. And as a result, now, there are more than 5,000 companies, or more than 5,000 entrepreneurs. On the other day, they employed more than 700 workers, so all together, 4 million jobs were created. So that's a remarkable story of the importance of learning from abroad about management and technology. Can it be replicated? Of course. But we should not expect their company of South Korea to repeat the same mistake in other countries. Because it was a mistake for them, but very good for Bangladesh. That is why we need the support from the government, international organizations, or from bilateral donors. But the importance of learning from abroad is true also in Africa. That's a very good example. That is an example of the leather shoe industry in Ethiopia, which has been growing pretty well, because it has been running a lot from Italy. Okay. Well, Tetsushi, you've been spending a lot of time. And obviously, business management is a global endeavor, and everybody has their own ideas about it. But how are you using it in sub-Saharan Africa? Okay. So you know that you see that if the management training really works, because it must be very important, but there is a question whether or not we can teach or whether or not they want to learn. So we have been conducting a kind of experiment. So our training program consists of teaching about entrepreneurship spirit and very basic knowledge of marketing and business planning, and the importance of record keeping. Not advanced training about record keeping, but just importance of record keeping, and also a very basic knowledge of kaizen, like a very simple housekeeping in order to avoid this kind of messy storage. And then we conducted surveys of the participants and non-participants before and after the training and to compare. And then we randomized the invitation to the training program. So is that the story of Ghana? Yeah, in Ghana, please show the next slide. Next slide, please. There we go. Yeah. Thanks to John Page's financial support, he brought some money from the World Bank. So we could provide this training to the metalworking people in Kumasi, the second largest city in Ghana. I'm going to just interrupt you for a minute, because tell us how there came to be such a huge cluster of metalworkers in Kumasi. In Kumasi, there is a huge cluster of the automobile repairers. Because in the developed countries, the car owners are scattered, so the service providers are also scattered. But in Ghana, most cars are trucks, and then the Kumasi is along the very important road connecting the seaport to the inland. So there's a huge demand for truck repairing. So there are more than 10,000 masters of car repairers. Then that cluster is known to other countries, like Mali and the next, next country. So basically, your truck breaks down, you head for Kumasi, is that it? Yeah, and then I don't know, how can they bring those broken cars from the next, next country, but somehow some masters are so well known in the West Africa. So they are rich, although their clothes are very dirty, but they are rich people. So many people, young people want to be like them, so they come as apprentices. And then there is a huge demand for the raised machine turners and those skills. So then the metalworking clusters also emerged. And then we provided, but unfortunately, recently, those engine blocks are imported from Asia. So rather than repairing, they just replaced the engine itself. So the demand for the skilled people are declining. So please show the next slide. Next slide, please. The profitability, okay, this is a messy workshop, and the fish can be turned into the better one after the Kaizen training. So please show the next one. Okay, I've got to interrupt you one minute. Can you please explain the difference between Kaizen training and the traditional BDS training? Just for those of us, I mean, there may be somebody else besides me who wasn't aware of the difference. So very briefly. Okay, so Kaizen is more about housekeeping and then encouraging the workers, everybody, just managers, but workers to participate and think and then practice how to improve the productivity. So initially, they just clean up and then sort out important things and important things. But then they find, oh, the working environment is becoming better. So they are happy. So they think more to improve the workplace. So that's Kaizen. All right. So very human-friendly. And then please show the next slide. So in Ghana, that metalworking cluster, the profitability has been declining because of the cheap imports from Asia. And then we provide, because the red one, pink one is a non-participant and then blue or green is a participant. So we randomize invitation. So they are almost the same. But after the training, training was provided towards the end of 2007. Then one year later, we visited the same place and then interviewed and then collected data. Then the profitability increased for the participant, but for non-participant, unfortunately, profitability has been declining. And then one more very important finding from this case is that why the non-participants, non-participants stopped operation after one year in the 2008. But among the participants, none had closed down. So very good, very good success. They survived. So the survival rate increased. So at the month and the job page emphasized, those short-lived enterprises are problematic. But after training, so after good training, so small enterprises can be very good employment creators. So this is the business equivalent of CPR, moving things on. And now what about Kenya? Because you had a slightly different case in Kenya. Yeah, in Kenya, please show the next. This is a really informal cluster of metalworking people, very dirty place. And so this is a non-participant. Pink shows the sales revenue and orange shows the profit. And then in the similar... These are the non-participants. Non-participants. And then here the timing was very bad for our experiment, because it was just after the post-election violence. So it was very dangerous. So we couldn't provide training at night time, but we have to provide it during the daytime. Then the relatively successful businessmen were very busy. So they couldn't participate. So our participants in this case were all small ones. So we couldn't randomize the invitation. We just alerted everybody. And then the relatively small one came. So please show, okay. So for small ones, both the sales revenue and the profit were lower initially. But after the training which was provided in the early 2008, so the small one catch up or even performed better than the non-participants. This happened only six months after the training program. And that's a pretty short time to actually measure. And also an important finding from this case is that some of the participants moved from that informal cluster to the formal sector industrial zones. So the issues that we were raising about tax before, this is showing a definite right? Yeah, they were really harassed by those government officials almost daily. But after training, they gained kind of self-confidence. So they moved to the industrial zone. That became formalized. I guess finally it was Tanzania, wasn't it? Yeah. Please show the next slide. In Tanzania, the restaurant, we provided similar training to the government producers. They are producing not just the dress, but also the bathroom furnishings and the bags and those things. And then 80% of the cluster people are female entrepreneurs. And then many of them started the businesses after receiving training from the UNIDO, which was provided for the female potential entrepreneur exclusively. So males are excluded. So the female entrepreneurs performed very well. So the left-hand side about the annual profit before the training, the biggest one, male entrepreneur performed better, but except for the largest one, female and largest, male largest, then the average profit was about the same. The female was slightly better. And also we have kind of the indicator of the management skill, which we call management score. So before the training. So basically the men were kind of catching up, do you think? Right. Yes. Because they hadn't had the skills that the women had had. Yeah. Some researchers found that the females tend to under form. But you were actually providing affirmative action. Okay. So and then those very successful female entrepreneurs were very active in exporting the products to even the European markets and the North American markets. I just have one little anecdote I'd like to hear, because you told me when we were talking about formal and informal, that at one point I think it was in Ethiopia you were doing a project and somehow you were going to have the launch and the minister showed up. Yeah. Could you tell us a story? Yeah. Because it's what I'm using. The metalworking people in that country was neglected by the government because the metalworking sector repairing the machines are kind of the import substituting activities. So the Ethiopian government listened to the economists and so they believed that export-oriented industrial development must be important. So the import substituting sector was neglected. So those metalworking people have never received any support from the government. But when we tried to provide the training to them, then I invited the state minister of industry to the opening ceremony. Then those who said earlier said to come to the training program, just hide away because they didn't pay the tax and there was a rumor that once they participated in the training, the tax collector would come. So they were shy away. So maybe you have to give them an opportunity to actually move on up the scale. Yes, K. I was going to come to you for the final year. The former prime minister who unfortunately passed away, Mr. Meres, is an economist interested in development of East Asia. He knows how East Asian countries develop. The important thing is learning from abroad. So he has been supporting this Kaizen management movement in Ethiopia. Now he has set up the Kaizen Institute in which a lot of people trained about Kaizen by receiving instruction from the Japanese experts. And that is a very good development. When I tried to explain the training program to him in a kind of roundabout way because I just assumed that he wouldn't know the word Kaizen. So I tried to explain. Then he said, oh, that's Kaizen. And they teach Kaizen to our people, he said. Okay. Well, what has foreign aid done so far? What's the record being in terms of supporting industrialization? Yeah. There are a lot of things. Development aid. Yeah. Development agencies did a lot of good things, including the provision of BDS, business development services. That was very good. But it neglected the fact that business owners and managers do not recognize that management is very important. They do not know. So demand is latent. So in order to make them recognize the importance of management, we need extra effort to convince them that management is a key. And then secondly, I think this concept of Kaizen, which was initiated more or less by Toyota, famous Toyota management system. Kaizen management is widespread throughout Asia. China, Thailand, Indonesia and everywhere. So that should be also transmitted to Africa. And another thing is the importance of industrial clusters. Almost all the manufacturing industries. Oh, I mean industrial clusters where lots of businesses come together like they did in Ghana. Yeah. The Manchester and the Glasgow in historically. But China's development has been cluster based. There is no question. Japanese development has been cluster based. And in Africa, there are actually many clusters. And there are a lot of good things within the cluster, you know, because of the proximity transaction cost is low and information is exchanged among producers and so forth. But that importance of cluster has been ignored in the 48. That's another shortcoming. Okay. Very, very quickly moving forward. Any last sort of advice, policy advice on what should be done given the audience we have here? We have offered very rudimentary training programs. We should certainly offer advanced courses so that their management will become much more efficient. And also we should use the management training as a screening device to identify promising entrepreneurs. As John Payne said, if we have to distribute credit to everybody, we waste a lot of money because many of the small ones will die in a few years. So we provide the training program. After training, it becomes very clear that who really learned new thing and who didn't learn. And by identifying the promising ones, we should provide credit. We should provide the infrastructure. We should provide other services. Also, we should think about moving them to SEZ, SEZ, the special economy zone. Okay, yeah. In which FDIs come. Because FDI is a major source of new information. So those things must be integrated. Everything has to be holistic. But it also, I mean, just again to be slightly argumentative because I have to be. But it seems to me that in Kenya, at least, you were dealing with people who were considerably further down the technological and technical skills level, but still had a very positive result. So maybe integrating all of it. Okay, folks, it's time to do a little bit of Q&A. I think we've got time for a couple. So do we have any questions for either Kay or Tetsushi on how management and skills training. I mean, Kaizen can actually help more small firms to succeed, to identify entrepreneurs. Why it's important to identify entrepreneurs. Sorry. Got a little frog in my throat. And maybe a little bit about how this can be integrated into policy. All right. Sam Jones, then Lotte Dalman, and then Peter Samuelson, and then Soren Shu. And then I will see how we're doing for time. So, Sam, you start. Thanks. Yeah, just a very quick question. We haven't really talked today, but you kind of hinted at it, the role of international migration. So, is that something that Development Aid could be financing is people to go to developed countries to learn and get experience and then come back. A bit like the Bangladesh story you told. Yeah, that's a good idea. But it's very costly. It's cheaper to send experts in Japan to Africa rather than inviting 130 Africans to Japan for training. Cost effective. Here we go. Okay. I think Lotte Dalman was our next. Yes. I'm wondering if there's a need to distinguish between innovation and entrepreneurship. You talked about Bangladesh. It seems to me that the replication of the garment industry idea, replicating it to several thousands, is more entrepreneurship than innovation. I tend to see innovation as a way of building new ideas and developing new ideas and new businesses rather than replicating. One question. The other quick question I would like to ask. It's true that Bangladesh is a great example of how it's generating jobs and good salaries. People even, you know, they jump, they shift, they change factories to get a better wage. But don't you think there will be a saturation point and then wages, they will start competing with one another? How do you see that? You've already covered that, actually. Which one of you wants to? As far as the garment industry in Bangladesh is concerned, we predict we are very sure that it will continue to grow. The major reason is that China is losing competitive advantage in producing labor-intensive products. Actually, we have observed a lot of Chinese people coming to Bangladesh to make audits. And the Bangladesh people are very, very confident that they can continue to grow. Okay. Peter Samuelson. Can you hear me? Yep. Speaking from the Danish forum for microfinance, we are obviously pleased to hear that so much interest has been on the microfinance as a part of the solution. And also the BDS discussion is interesting. How about the new wave of the making markets work for the poor and the donor committee for enterprise development, which is so much emphasizing on the value chain analysis and identifying market-based solution to enterprise development? I haven't heard much about that. Yeah, of course, value chain is very important and how to manage value chain, the important component of management. Marketing is actually the key. In the case of Ethiopian enterprises, out of 100 top largest enterprises, 50% of the managers used to be traders. Why? Because trader knows how to market the products. And that has been the case not only in Ethiopia, but in China, Japan, Vietnam, and everywhere. So thinking about the value chain properly is the key component of the innovation. Okay. Soren Shu. To the extent that management capabilities is an important constraint to many of these companies, what does that imply? Because, I mean, you can train people or you can try to get people that know this stuff already. So what does this imply for trying to attract multinational companies to developing countries to get these management capabilities? Okay, I think my understanding of this is why train locally when you can hire locally? And I guess one of the answers here is because we're trying to figure out how to hire locally. But it's a question of why create the skills if somebody has the skills, but if people don't have the skills you want to bring them in. I'm sorry, Soren, that I'm answering your question. I am very familiar with this paper. But is there... In Africa, there are many good instructors. And also, the smaller business owners, managers, had the very limited access to the knowledge, important knowledge. But now it's a kind of error of the information. Then how can they be... their access to knowledge is limited? I think one reason is that they didn't know the value of knowledge. So they have limited access to advanced knowledge because they don't know the basic knowledge. So they're providing the knowledge. And then the more people can participate. And then from them, there may be a very good one. I think maybe this is the story of development. Morton, and then Johnny. Okay, Johnny first. Okay, on the Bangladesh issue. I lived there when this took off. So I'll have to say just a few comments on this success. I'm sure it was a very big management achievement. But there were also a couple of other facts which made this happen, which are actually more contrary to normal policy advice. First of all, this happened because Korean and Taiwanese and other manufacturers were running into trade barriers in Europe and the US. So they could no longer import or export to those countries. So they moved their production to a country which had least development country status and were thereby granted free access into these extremely important markets. First, secondly, this would never have happened if they didn't engineer a special system for Bangladesh because Bangladesh lived with a very, very high protection of its own textile industry. So textile industry spinning and weaving was heavily protected in Bangladesh. They do that because of India, of course. So there's no value chain at all. The produce was brought in from outside, was not in the local weaveries. The threat was not even made in Bangladesh. So they did it via duty drawback systems and in special export processing zone because they could not produce cheap enough in Bangladesh. And then culturally... You lost me on the last one, sorry. Normally if you make a jacket, you would like to weave the material in a local... Ah, you're saying they brought all the raw material in. So it was brought in, cut and sewed, and then exported again with duty drawback system and in export processing zone which isolated it completely from the rest of the Bangladesh economy. But it still created a huge industry in Bangladesh, didn't it? Yes, because of regulatory things that sort of isolated from the rest of the Bangladesh economy. And then a very special cultural thing in Bangladesh, an enormous pool of female labor that had not before that been sort of authorized to work outside the home. There was nothing like a minimum salary. They would work for anything. Yeah, I'm not disagreeing with that. Kay. No, I agree with you. Mostly, not 100% but 90%. But the reason why we refer to the case of Bangladesh is that pattern of development of Bangladesh is exactly the same as pattern of development of each state and countries. So the same pattern of the development can take place in South Asia. That's the important lesson we should learn. Okay.