Back from Laos now, where I was participating in the 9th SMEs in a Global Economy Conference, which went well, I think. There were some quite good papers, networking and so forth. The organizers and helpers were all very friendly and helpful. Next year’s conference is schueduled to be in Vietnam, although details are not yet confirmed. I should mention this year’s conerence was sponsored by the Asian Development Bank.
Vientiane itself was looking very modern and spruce, at least along the main drag and the international hotel area. This is a view of the presidential palace, down by the Mekong, together with a sign for the ASEM which had just finished and helps explain all the neatness.
Vientiane itself was completely destroyed and abandoned in the nineteenth century so the city that we see today was rebuilt extensively by the French (for the purpose of being a provincial administrative centre for the empire) according to Haussmannesque guidelines – see for example the broad, tree-lined avenues (below) which look pleasant but also have the effect of extending the state’s power into every aspect of the city – you cannot hide from the authorities on streets like this.
A little further along, overlooking the River Mekong and gesturing in a possibly friendly way to neighbours, is the founding hero Fa Ngum.
At the foot of this statue is a small market where it is possible to buy pictures and memorabilia of the heroes of the revolution: Marx, Lenin, Ho Chi Minh and Kaysone Phomvihane, among others.
I have successfully completed the presentation of the paper ”Business Strategies Used by Micro-SMEs in a Bangkok Street Location: Tawanrung Market” at the 9th SMEs in a Global Context Conference being held here in Vientiane (http://www.laosmeconference2012.com/index.html). We have a gala dinner tonight and the second day of the conference tomorrow. Here is the abstract:
Although a reasonable number of studies of street market vendors have taken place, in both developed and developing markets around the world, these have mostly been conducted from a sociological perspective. They have aimed to explicate issues such as the relationship between vendors and the state, the use of space in an urban setting, the resistance demonstrated by vendors against oppression and the value of street-vending in the struggle against poverty. However, there have been fewer attempts at describing street vendor systems from a business perspective and from, in particular, collaborative and cooperative means of increasing business within a particular geographical area. This study uses an ethnographic and qualitative research method to describe and analyse a specific street vending area located in and around the Ladprao 62 region of Bangkok. This area consists of several different discrete street vending regions that are distinct in terms of time of operation, type of goods sold and relationship with other vending operations. The demographic details of the street vendors also varies, to a certain extent, on these variables. Operations are managed with respect to business objectives and personal and familial circumstances: for example, seasonality of agricultural production in the home towns of migrants means there are periods when production is temporarily although predictably halted. Other halts are less predictable. In order to increase business success, street vendors will generally maintain cooperative relationships with each other and share information so as to increase aggregate sales, rather than seeking to gain short-term competitive advantage over neighbours or competitors. Since the pool of customers is comparatively limited over a fixed period of time, there is little benefit to individual vendors seeking to drive out competitors since network externalities exist, particularly in the case of takeaway meal choices. This paper describes a variety of business strategies enacted within the Tawanrung Market area and indicates how these have been changing over time and with respect to new entrants and potential substitute products. In a system of creative destruction typical of capitalism, it is found that there are both winners and losers.
Keywords: street vending, micro-SMEs, economic geography, business strategy
Area of Submission: SME Networking and dissemination of information
Southiseng, Nittana and John Walsh, “Competition and Management Issues of SME Entrepreneurs in Laos: Evidence from Empirical Studies in Vientiane Municipality, Savannakhet and Luang Prabang,” Asian Journal of Business Management, Vol.2, No.3 (September, 2010), pp.57-72, available at: http://maxwellsci.com/print/ajbm/v2-57-72.pdf.
Abs tract: This study analyses competition and management issues of Small and Medium Enterprise (SME)
entrepreneurs in three provinces of Laos: Vientiane Municipality (the capital city), Savannakhet (an important
economic development zone) and Luang Prabang province (a famous historical site and tourist destination).
Competition and management have changed dramatically after the introduction of the New Economic
Mechanism in 1986, which moved the economy from central planning to market-based economic management.
Qualitative research was used, with 52 in-depth personal interviews conducted and combined with behavioural
observation and content analysis of secondary sources of data. Results indicate the importance of SMEs in the
Lao economy, with some 74% of total enterprises being family-owned SMEs. These concentrate on food
processing, garment production, construction materials, wooden furniture, tourism, education, trading,
transportation, internet services and others. Increases in the SME sector have contributed to job growth and
overall GDP growth. Findings also showed increased competition in the sector as substitute products are
introduced, with significant bargaining power for buyers and a high rate of new entrants into a limited range
of product/service markets, without much competition in terms of price and quality of goods and services.
Entrepreneurs find it difficult to access modern technology and finance, have limited resources in terms of
capital and skill and must also negotiate unfair treatment by officials. Management styles usually focused on
short-term day-to-day objectives and few were able to consider longer-term considerations or business
sustainability. Skills management and capacity building in these SMEs were narrowly conceived and required
to be profit-based. Training and development of human resources was seen as a cost rather than an investment.
Recommendations are made for enhancement of SME productivity and capacity.
“On April 2, 1867, the expedition reached Vientiane. They quickly saw how thorough the Thai destruction had been. Vientiane’s ruler had been singularly unwise in choosing to rebel against King Rama III of Thailand. This Thai monarch matched austerity with a determination to ensure that his kingdom would never again be a prey to the attacks and invasions that had been such a feature of the eighteenth century. When his trusted and favoured vassal rebelled, Rama III did not offer half-measures in response. Vientiane was occupied in 1827 and the destruction began. Religious monuments were left standing, but the temporal buildings of the city were razed. Inhabitants who had not been killed in battle or chosen for slavery were driven into great bamboo structures and burned to death. When Chou-Anou, the defeated ruler of Vientiane, was captured a year later, he was sent to Bangkok, where he was immediately displayed in a cage to reap a bitter harvest of taunts and abuse. Within a few years – experts disagree on just how many – he was dead, though whether through disease or secret assassination is unknown.”*
I thought I had posted this yesterday – is the internet broken or am I losing what tenuous grasp on reality is left to me?
* Osborne, Milton, River Road to China: The Search for the Source of the Mekong, 1866-73 (Singapore: Archipelago Press, 1996), first published in 1975, p.97
It has been a while but it is now available:
Walsh, John and Nittana Southiseng, “Vientiane – A Failure to Exert Power?” City: Analysis of Urban Trends, Culture, Theory, Policy, Action, Vol.13, No.1 (March, 2009), pp.95-102.
This is the abstract:
Vientiane is a city that has always stood in opposition or contrast to its surroundings. When first established, it contrasted an urban centre with surrounding rural areas from which surplus was extracted to support the activities of the urban elite. Through its existence, it has provided a centre of power to counter or be opposed to Ayutthaya, Luang Prabang and Chiang Mai. This could be aligned along ethnic lines or, internally among the Lao people, between the religious and political division between Vientiane and Luang Prabang. In the Communist world, the city contrasted its religious and ceremonial role with the temporal state and its monuments to legitimacy, which remain half-built and lifeless in the cityscape. The city also acted as a symbol of the competing Communist ideologies prevalent in the region. In the emerging post-Communist world, Vientiane represents once again a central organizing function and a surrounding environment which is supposed to be the subject of direction but which more commonly wishes to establish space in which to pursue income gathering opportunities and entrepreneurial activities. It also exists as one of the 10 capital cities of ASEAN and has acted as a location in which cross-border state level agreements are made which the Lao state has little technical capacity to enact without considerable external support. In each manifestation of opposition, remnants of the opposition have lingered, notwithstanding regular episodes in which the city has been almost completely destroyed. Many of those remnants are also symbolic of the external power which has been called upon to substantiate and legitimize the claim to power that the city controller has made and tried to enforce. Hence, the city’s markets, monuments, temples (wats), fields and roads are evidence of the divisions in the past.