Building the Capacity of Local Businesses

At a Glance
  • To address key gaps in facilitating connections between buyers and suppliers, businesses may develop basic training and skills development programs that are public, private, or joint public and private.
  • Basic training may include addressing questions such as: what is procurement and what does it do, who uses it and how often, what are the needs of extractive industry sites, what are tenders, what are technical specifications, and how are procurement decisions made?
  • Skills development may involve a company drawing on its own personnel to provide direct training for prospective suppliers or the community at large. This can be especially useful during the early development phases when the project impact and training budgets are smaller.
  • Supplier development includes specific businesses from which the extractive industry site procures goods or services.
  • Enterprise development, by contrast, typically applies to all businesses in the community.

Key Resources

See more resources

Anglo American Corporation's Zimele Enterprise Program

This report illustrates ways to extract value from extractives projects using corporate initiatives to promote SMEs. Looking specifically at ...

The Supplier Development in the Oil and Gas Sector of Kazakhstan

This case study focuses on means of developing backward linkages between oil companies and local firms in Kazakhstan, creating a business ...

Topic Briefing

Beyond facilitating the connection between buyers and suppliers, there often remains a need to build the capacity of suppliers. Procurement priorities for extractive industry companies include cost, quality, delivery time, and codes of conduct within the suppliers themselves. To address gaps that businesses may have to meet these priorities, programs that are public, private, or joint public and private may be developed. Basic training may include helping suppliers to understand the procurement process and needs of a company, addressing questions such as: what is procurement, what does procurement do, what does the extractive industry site need, how often and who uses it, what are tenders, what are technical specifications, and how are decisions made in procurement?

Read more

Beyond a detailed understanding of the procurement process and how to participate, training efforts can focus on building skills. Often a company can draw on its personnel to provide training for prospective suppliers or the community at large. This can be especially useful during the early development phases when the project impact and training budgets are smaller.

Supplier development and enterprise development are two different concepts. The first includes businesses specifically from which the extractive industry site procures goods or services, while enterprise development generally applies to all businesses in the community. To be noted that some companies include their suppliers when referring to “enterprise development”, while others only refer to businesses they support that are entirely independent of their supply chain (such as “alternative livelihoods” community investment programs as they are often called).

In subsequent subtopics, training, mentorship, and finance will be covered in more depth.