The World Business Council for Sustainable Development (WBCSD) has developed the National Market Participation Framework, a new tool to help open up dialogue between business and government on supplier competitiveness. Competitiveness is key to enabling local firms’ participation in the value chains of large inward investments and to local economic development.
Investing companies and host governments often have shared interests in enhancing local firms’ capabilities and competitiveness. The tool presents the case that these shared interests are best realized through working to improve the competitiveness of local firms rather than through mandatory requirements (‘local content rules’). While such mandatory requirements can boost local firm participation in the short term, substantial evidence suggests these measures can be counterproductive and often impose significant costs on consumers and investing firms, increase project risk, reduce competition and innovation, and discourage investment.
The tool can be used across a broad range of sectors, geographies and scales of investment. It will be particularly useful in circumstances where investing companies have opportunities to engage with governments, government agencies or other key stakeholders on the parameters to maximize the developmental benefits of large investments.
Click through the slide show to get a brief overview of this WBCSD tool, and download the full pdf version below.