How Can We Achieve Greater Scale and Impact Supporting Small Businesses?


(Jane Nelson) #21

Next question: while there is in theory a strong business case, we know that the execution is complex and can be costly depending on the locations of the retailers and the depth of support they require.

How can technology be employed to increase scale and impact at a reduced cost per participant?

Love to hear examples from our audience as well!


(Miguel Aldaz) #22

Very good point. Unless the real motivations (sales driven, risk mitigation, etc.) are perfectly understood by all the participant partners, the collaboration won't be successful.

Justin Bakule said:

I also think within these comments its important to tease out two elements of this from the business perspective - is it a risk-oriented situation or an opportunity for new growth? Oftentimes on the supply input side, businesses are trying to address supply chain oriented risks and so the case is made around the seriousness of those risks and how it impacts their ability to do business. On the retailer side, I think it's often about a new growth opportunity - how can partnering with and influencing the excellence of retailers help drive additional growth opportunities. Both the upstream and downstream side may have brand benefits as well especially among the direct partners of the investing company.


(Jim Thompson) #23

Social media platforms like the one that we are using today greatly reduce costs in reaching target audiences. At the U.S. Department of State we started experimenting with these platforms long before they were mainstream.


(Justin Bakule) #24

When looking at the upstream supply chain investments, it's important to understand both the proximity to business strategy and the seriousness of the perceived risk by comparing the scale and scope of investments being made against the scale or scope of the problem at hand. This is a pretty easy mechanism for interpreting commitments and being able to tease out serious, transformative commitments to what can be PR-related statements of intent.


(Jim Thompson) #25

One early use of social media at State was the launch of the Democracy Video Challenge. In this partnership that launched 7 years ago the Department partnered with YouTube to use their platform to get people talking about what democracy meant to them. People were invited to submit three minute videos of their thoughts on Democracy. The platform enabled a worldwide response and we even got the dialogue going in non-democratic countries. The cost was significantly lower by using this technology and the target audience was more easily reached.


(Justin Bakule) #26

The short unsatisfying answer to the technology question is ‘it depends’ but I think the key element here is that technology should be fit for purpose – where it makes sense to farmers or small retailers in the value chain, then it can be a helpful supporting mechanism to drive lessons, information and updates during the training or ongoing relationship management process. But, the deployment of technology and its effectiveness should be measured just like other elements of the program and I imagine roll-out would be effective later on in the program after an experienced implementer like Fundes had a robust sense of the program participants across different countries.


(Miguel Aldaz) #27

Latin America is a region that loves technology. Among its adults, the market penetration of mobile phones has reached a saturation point, and studies project the active social media user pool to expand to 254 million in 2015, or more than one-third of the region’s population. This increasingly widespread use of technology in LAC is significant for many reasons:

First, ICT are a key vehicle for developing nations to foster economic development. A 10% increase in broadband service penetration alone is associated with an average 3.2% rise in GDP and a 2.6% rise in productivity. More specifically, ICT infrastructure is widely regarded as vital to entrepreneurship and small business development, particularly in emerging economies where access to capital and market information is a persisting obstacle. Addressing these obstacles through technology has the potential to unleash a flurry of growth.

Second, technology is a vehicle to increased opportunities for individuals. In studying the correlation between access to technology and improved livelihoods, the UNDP found that among women globally, 55 percent earned additional income due to owning a mobile phone, while 41 percent increased their income and professional opportunities for the same reason. Technology is a big enabler that allows, per example, small stores owners not to leave the business place to educate themselves, realize public transactions (tax payments, application forms, etc.), restock inventory or access to banking services, among many others. What is more importantly, because of the high market penetration, most of tenderos feel comfortable and at ease around technologies such as cell phones. But let's not forget that technology is not "the silver bullet", it must be a component of a comprehensive solution.



Jane Nelson said:

Next question: while there is in theory a strong business case, we know that the execution is complex and can be costly depending on the locations of the retailers and the depth of support they require.

How can technology be employed to increase scale and impact at a reduced cost per participant?

Love to hear examples from our audience as well!


(Maria Cecilia Benedetti) #28

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(BERNARDO SAIZ) #29

E-learning in conjuction with some sort of on-site implementation solution can work, as tenderos from the base of the pyramid are not technology savy and may have fear of change. I think that once they overcom this barrier (fear of change), tenderos are much more open to implement new ways to sell more and better themselves.


(Jane Nelson) #30

Yes - Justin and Bernardo have highlighted two key issues. Ensuring that technology meets a need, rather than the other way around, and the need to build comfort and familiarity with technology for it to work.


(Catalina Garcia) #31

From Andres Peñate SABMiller: Hi guys, apologies but the gods of technology are not smiling to me today so I am joining via Cata's account. I agree with Justin. In the case of SABMiller our business success is intrinsically linked to the success of a plethora of small business. Upstream for instance, 70% of our supplier in Latam are small business. Downstream, 60% of our sales are via small mom and pop shops.


(Jane Nelson) #32

I think that technology has enormous potential in this regard. But constraints on the user side – in the case of 4e, the small-scale retailer’s side – need to be overcome. Mobile phones are ubiquitous now, even in the poorest communities, but if other devices like computers or tablets are needed to access a course or service, users must have access to any financing necessary to purchase them – and ideally prospects for increased income to pay the lender back. People might need training to learn how to use and get comfortable using technology. They need affordable service options in case something malfunctions. But if the nut can be cracked, the benefits could go beyond any given program. I remember Beth Jenkins, who did the research for our case study on 4e, telling me the story of one 4e participant who obtained a computer. He uses it to keep his accounts, and his kids are getting familiar with technology that is increasingly essential in the workplace.


(Jim Thompson) #33

It’s hard to imagine but when the millennium development goals were first prepared, we did not have the ubiquitousness of social media and social media platforms. Technology can be a driver in the development space and the new MDGs eed to account for these incredible tools.


(BARBARA PALACIOS) #34

Technology could be the best ally to achieve increase impact and reduce cost, for example, in 4Ecase, google hangouts or radio could be used to train retailers massively.


(Jane Nelson) #35

I have also heard of several new models for using technology to collect results data. Results measurement is another key component of the 4e program. Estrella, perhaps you can comment on that.


(Estrella Peinado-Vara) #36

In the 4e program, technology can be used to provide training on-line only or a face-to-face combination, depending on the shopkeepers’ access to technology. This will bring the cost of the training down but in order to succeed, we still think that a close follow up by advisors that personally know each case is still very important. This relationship between the shopkeeper and the advisor is key for building trust in the program and engaging the shopkeepers fully. One of the things that we would like to learn is how effective technology is for training as well as for the small shops productivity.



Jane Nelson said:

Next question: while there is in theory a strong business case, we know that the execution is complex and can be costly depending on the locations of the retailers and the depth of support they require.

How can technology be employed to increase scale and impact at a reduced cost per participant?

Love to hear examples from our audience as well!


(Jane Nelson) #37

I would encourage members of the audience to log in and introduce themselves. Looking forward to answering your questions, too!


(Juan Carlos Rojas Perafan) #38

What is important for large companies is to sustain small businesses providing tools for these businesses endure over time. Tools technologies where these businesses can be grouped and remain profitable as well as chains or association of several entrepreneurs to achieve greater buying power and can generate higher profits


(Catalina Garcia) #39

We see technology as a tool to reduce not only digital gap but opportunity gap, It is a tool for education, as a source of income, as a business tool, and a tool to connect tenderos amongthemselves


(Jane Nelson) #40

An unexpected question! Jim and Miguel, what is the role of governments and DFIs in models like 4e to support small businesses?