Supplier development programmes in Costa Rica and El Salvador

Costa Rica and El Salvador are small open economies in the heart of Central America, which have each adopted different types of export specialization. Costa Rica has transformed its export basket from agricultural products to medium- and high-technology manufactures and services by attracting foreign direct investment (FDI) to these sectors. El Salvador, for its part, has specialized in low- and some medium-technology manufactures and some services. In both countries, large (export) companies have few backward linkages with small and medium-sized enterprises (SMEs). Each country has adopted small supplier development programmes to promote such linkages, albeit with a different focus. Costa Rica promotes backward linkages mainly with foreign companies in the export sector, whereas El Salvador focuses on enhancing the competitiveness of existing business linkages between small and large indigenous firms in its local market. Despite the achievements of each programme in terms of its proven methodological approaches, intellectual capital, know-how and information technology (IT) resources, both face challenges to increase their impact.

Sustainable Development Goals:

Industry, Innovation and Infrastructure