/ 16 September 2014

New dashboard expands SA’s export horizons

The 2006 forensic report prepared for Zuma's trial that never saw the light of day ... now made available in the public interest.
The outcome of the ANC’s long-awaited KwaZulu-Natal conference was a win for the Thuma Mina crowd. (Delwyn Verasamy/M&G)

Rising competition and sluggish growth at home are forcing more and more South African businesses to consider exporting or, if already active at an international level, to diversify into new products and/or markets. In this context, developing an export strategy involves getting answers to questions such as:

• Which regions/countries are worth pursuing and spending money on?

• How should the available product range be tailored so as to take advantage of the opportunities present in the market(s)?

• Which export opportunities should we focus our attention on, given the constraints of time, money, manpower and/or expertise?

Achieving international success is rarely a simple process. International trade policymakers and practitioners alike are faced with a great deal of uncertainty, which makes strategic planning challenging. Both are preoccupied with how to allocate their resources wisely and how to design export marketing initiatives that stand the greatest chance of delivering long-term value. Ideally, such decisions should be based on fact-rich intelligence derived from academically rigorous and scientific research methods, but they should also reflect real-world pragmatism.

Why is it difficult to choose viable export markets??The complexity and ever-changing nature of the international trade environment have given rise to untold research reports, analyses and commentaries, and it is easy to feel over- whelmed in the face of such information overload. How is it possible, many people ask, to assess all the data and information on offer in order to compare markets in terms of:

• country risk,

?• logistics costs,

?• trade barriers, and

?• size and growth potential?

Few businesses have the time or resources to devote to all-encompassing market studies. Not surprisingly, market selection is often a hit-or-miss affair, with the resulting export returns potentially being disappointing. The methodology has application for active and aspiring exporters, as well as trade promotion officials operating at national and provincial level.

How does the TRADE DSM Navigator work?

?In a nutshell, the TRADE DSM Navigator evaluates and screens all worldwide country and product combinations, using four intelligent filters. Drawing on a number of qualifying criteria, each filter sequentially eliminates less realistic or promising product-country combinations (or export opportunities) in the particular market being assessed, and then categorises and prioritises the shortlisted realistic export opportunities (REOs) in different positions on a grid, known as the REO Map.

What are the benefits of making use of the TRADE DSM Navigator??

The approach is extremely rigorous and thorough based on more than 10 years of academic research and it informs export growth strategies in existing and/or new markets. It is the only market selection methodology that includes all possible product- country combinations in the world at an HS-6 product level. It is much more time-efficient than traditionalapproaches to market and product selection and therefore encourages the efficient allocation of resources, thereby helping organisations to advance their export initiatives in a timeous and cost-effective manner. An easy-to-use interface is available, making providing access to the information portable and convenient.

How food markets work

TRADE, a specialist research entity at the North-West University in South Africa, is helping organisations to streamline their market selection decisions and focus their export efforts.

Using a scientifically sound methodology that systematically scans and screens international trade and market data, TRADE has developed the TRADE DSM Navigator, a tool designed to identify pre-qualified, realistic export opportunities:

• per HS-6 product level (or other classification system, for example Standard International Trade Classification)

• per individual product sector per industry sector (for example agro industry)

• per potential export market (for example the Netherlands)

• per potential export region (for example Africa or SADC)

What do HS codes mean?

The Harmonised System (HS) is a numerical classification system of products used as a basis for international trade statistics by almost all countries.

The system is harmonised (meaning comparable between countries) up to six digits (HS-6). This means you can compare HS data between countries down to a 6-digit level of detail.

A practical example:

• HS-2 digit: the chapter of the good (sector) for example 08 = Edible fruit and nuts; peel of citrus fruit or melons

• HS-4 digit: groupings within the chapter (sub-sector) for example 0809 = Apricots, cherries, peaches (including nectarines), plums and sloes, fresh.

• HS-6 digit : product(s) within the grouping for example 080910 = Apricots, fresh

Professor Wilma Viviers is chair of?the World Trade Organisation’s Chair Programme, and research professor and leader for the trade and development research niche area at the North-West University (Potchefstroom Campus) www.nwu.ac.za/trade

This article is part of a larger supplement. This has been paid for by the M&G‘s advertisers and the contents signed off by the organisers of the Innovation Summit