The key challenge that limits collaboration across companies is an undue emphasis on reputation as the key driver behind these programs. A company compete with all pother for reputation and therefore prefer programs where it is the lone force. This limits the reach and eventually the duration and traction of the program.
Another example is the Accenture Corporate Citizenship, Accenture Development Partnerships and University of Notre Dame Partnership in Uganda and South Africa. We have employed a hub and spoke model where we invest in renewable infrastructure for small farming cooperatives or schools. The power generated by the solar micro-grid is split 3 ways : 70% uptake by the co-op or school for their needs, 20% goes to small holder businesses in the area – mobile phone repair men, refrigeration firms, tuck-shops etc. the final 10% is used to power a ICT centre where we deliver classroom and mentor-based locally-relevant and specific curriculums, focussed on entrepreneurship essentials and also basic ICT skills. We also offer a recruitment programme for graduates of the programme. The success of this intervention (over 800 graduates and over 30 micro-enterprises) is all about setting the community up for success, stimulating micro-enterprise and developing sustainable opportunities for the community. Our plan includes a clear exit-plan in 5 years. We are doing this in partnership with TechnoServe, our agricultural technical partner and Mentec our training and mentorship partners as well as a rural development agency (ADA) and renewable company (Pele Energy). Our success stems from a deep relationship with the community in understanding their needs, a clear definition of why we are investing in this together, clarity on what each partner brings and what their value add or incentive is to the micro-enterprises and community, a programmatic approach to delivery with a specified exit plan, and robust KPI’s measured regularly that relate back to the ambition, the micro-business and community needs and our progress to self-sufficiency.
Richard Gilbert said:
Thanks for the great discussion. Let's move on to our final question:
Q3. What are the key challenges that limit collaboration across companies, governments, civil society organisations and donors? What are examples of effective collaboration and what has made them successful?
I couldn't agree more, Jane, of the need for donors, foundations and others to play a catalytic role here, both through directly funding the development process of such collaborations and through supporting the 'infrastructure' for collaboration along the lines of backbone organisations and platforms for partnership. Right now it is quite challenging to get that catalysing / facilitating / brokering role funded, despite its importance in ensuring the development of effective partnerships.
Great points Gerry! Large companies and small business are actually interconnected and interdependent like organisms in an ecosystems. It is very easy for a large company to fail to appreciate these inter-dependency relations and its impact on them. Governments and society ofetn also fail to appreciate the full picture of small businesses, including their potential for innovation.
Gerry Boyle said:
Two key issues I would say get in the way of collaboration:
1. Businesses don;t think sufficiently strategically about micro-enterprises - indeed they are very often ignorant of which micro-enterprises are in their value chains. But this is slowly changing both because of risk management (UN Guiding Principles, for instance) AND companies starting to see the advantage they can build by managing their relationships with, and investment in, micro-enterprises
2. Governments and donors do not see informal micro-enterprises as a path to future economic development - they too easily jump to the other end of the value chain of ODI and export markets. However, as increasing numbers of companies will acknowledge, having an effective micro-enterprise supplier base or distribution network is really important to business success. Governments and donors therefore need to think a lot harder and more positively about improving the environment for micro-enterprises.
Richard Gilbert said:Thanks for the great discussion. Let's move on to our final question:
Q3. What are the key challenges that limit collaboration across companies, governments, civil society organisations and donors? What are examples of effective collaboration and what has made them successful?
It is my hope that current efforts to improve supply chain knowledge and transparency will help businesses better understand where and how micro-enterprises fit and better enable all actors to improve efficiency and livelihoods.
Gerry Boyle said:
Two key issues I would say get in the way of collaboration:
1. Businesses don;t think sufficiently strategically about micro-enterprises - indeed they are very often ignorant of which micro-enterprises are in their value chains. But this is slowly changing both because of risk management (UN Guiding Principles, for instance) AND companies starting to see the advantage they can build by managing their relationships with, and investment in, micro-enterprises
2. Governments and donors do not see informal micro-enterprises as a path to future economic development - they too easily jump to the other end of the value chain of ODI and export markets. However, as increasing numbers of companies will acknowledge, having an effective micro-enterprise supplier base or distribution network is really important to business success. Governments and donors therefore need to think a lot harder and more positively about improving the environment for micro-enterprises.
Richard Gilbert said:Thanks for the great discussion. Let's move on to our final question:
Q3. What are the key challenges that limit collaboration across companies, governments, civil society organisations and donors? What are examples of effective collaboration and what has made them successful?
Great points Gerry! Large companies and small business are actually interconnected and interdependent like organisms in an ecosystems. It is very easy for a large company to fail to appreciate these inter-dependency relations and its impact on them. Governments and society ofetn also fail to appreciate the full picture of small businesses, including their potential for innovation.
Gerry Boyle said:
Two key issues I would say get in the way of collaboration:
1. Businesses don;t think sufficiently strategically about micro-enterprises - indeed they are very often ignorant of which micro-enterprises are in their value chains. But this is slowly changing both because of risk management (UN Guiding Principles, for instance) AND companies starting to see the advantage they can build by managing their relationships with, and investment in, micro-enterprises
2. Governments and donors do not see informal micro-enterprises as a path to future economic development - they too easily jump to the other end of the value chain of ODI and export markets. However, as increasing numbers of companies will acknowledge, having an effective micro-enterprise supplier base or distribution network is really important to business success. Governments and donors therefore need to think a lot harder and more positively about improving the environment for micro-enterprises.
Richard Gilbert said:Thanks for the great discussion. Let's move on to our final question:
Q3. What are the key challenges that limit collaboration across companies, governments, civil society organisations and donors? What are examples of effective collaboration and what has made them successful?
Agree with your comment about extensive investment burden - one thing we have seen is that when the government catalytic funding is fully utilised and dries up, often the micro-enterprises fail shortly afterward. For me this speaks to the sustainability mind-set in designing the micro-enterprise funding programmes - they need to support, grow and then fledge the businesses with mentorship support to better ensure success.
Elaine McCrimmon said:
I also think some of the key challenges that limit extensive collaboration are identifying who to partner with, effectively managing and aligning the potentially differing incentives and agendas of all parties, and ensuring a common goal.
Jane Nelson said:Lack of incentives and high transactions costs are major challenges. Taking a systemic and collaborative approach has obvious upfront costs in terms of time, money and other resources, for the companies taking a lead – even when there is a promise of long-term benefits. This is where catalytic funding from governments, donors or foundations can play a key role and where the on-the-ground capability, local market knowledge and outreach of market-oriented NGOs and consultants can be invaluable. Having a coordinator or backbone organization often makes a difference in bringing disparate actors together – country-level initiatives of the Better Than Cash Alliance, Global Alliance for Improved Nutrition, and New Vision for Agriculture illustrate the value of this role.
Richard Gilbert said:Thanks for the great discussion. Let's move on to our final question:
Q3. What are the key challenges that limit collaboration across companies, governments, civil society organisations and donors? What are examples of effective collaboration and what has made them successful?
The challenge of limit collaboration is that actors of society work in silos, there is a lack of collaboration because their interests are not connected or they may not want of connect them. They need to identify common interests, find a win-win way of working and find a leader to manage this collaboration effectively and measure results. An example of business-social impact and collaboration is the case of Cemex with program "Patrimonio hoy" for their distributors of cement. They train them in business and social skills, provides them credit directly and through banks and serve the community income and housing needs. Another example is the microcredit program of Bavaria-Colombia for small retailers together with Bancolombia and Banco Agrarario providing finance training and microcredits, access to finance for the retailers for their first time, with and excellent payment behaviour. A win-win relation between companies (SABMiller-Bavaria), the banks, the retailers and the government.
Gerry Boyle said:
Two key issues I would say get in the way of collaboration:
1. Businesses don;t think sufficiently strategically about micro-enterprises - indeed they are very often ignorant of which micro-enterprises are in their value chains. But this is slowly changing both because of risk management (UN Guiding Principles, for instance) AND companies starting to see the advantage they can build by managing their relationships with, and investment in, micro-enterprises
2. Governments and donors do not see informal micro-enterprises as a path to future economic development - they too easily jump to the other end of the value chain of ODI and export markets. However, as increasing numbers of companies will acknowledge, having an effective micro-enterprise supplier base or distribution network is really important to business success. Governments and donors therefore need to think a lot harder and more positively about improving the environment for micro-enterprises.
Richard Gilbert said:Thanks for the great discussion. Let's move on to our final question:
Q3. What are the key challenges that limit collaboration across companies, governments, civil society organisations and donors? What are examples of effective collaboration and what has made them successful?
Yes Richard - trust is not something that we as an external, temporary agent can 'deliver' but what we can do is provide facilitation services that will create the conditions for trust to emerge. Within a specific situation there may be many reasons why trust has been undermined or not emerged. Those working in out-growing schemes know this very well and have spent time looking at why smallholders often engage in side-selling for instance.
Our priority has been to create the spaces and opportunities for the actors themselves to explore why trust is not there and to work out whether they want to do anything about it. So in ground nuts in Bangladesh for instance they found there was misunderstanding about payment terms that was negatively affecting how they viewed each other and their aspirations for a future commercial relationship
Although we're a big fan of systems processes where actors collectively identify and solve problems, to build trust bi-lateral conversations can be necessary. There does seem to be some benefit if those actors are working on this aspect within their understanding of the direction of the broader system i.e. a shared understanding of where they want to get to (high volumes of ground nut sales, better quality, more of certain grades etc)
Richard Gilbert said:
Alison - could you describe some of the ways you build trust between system actors?
Alison Griffith said:
The allure of market systems approaches to development practitioners like Practical Action is the potential to achieve scale - most agencies can see small islands of 'success' in a straight delivery model. A systemic approach opens things up to potentially impact on many more MSEs who rely on those systems. But success (commercial and social) depends on many factors that are outside of our direct control. So that means we have to focus much more on the processes that will build the capacity of system actors to deliver the changes that need to happen. This is not (always) so much of a challenge for bigger players, but if MSEs are to benefit we need to specifically support their engagement.Investing in trust building has been mentioned elsewhere in this discussion and certainly that's something we've found to be crucial in a range of different contexts. And agree with others about the importance of understanding incentives
Richard Gilbert said:Thanks for all the great points! Let's move onto the next question:
Q2. What are some of the limitations of current approaches to supporting micro-enterprises in value chains? How can taking a more “market systems” approach deliver greater commercial and social value?
Supporting micro-enterprises and collaborating with others for greater social impact has a strong business case, when they thrive – so do we.
Andres Peñate said:
Great points Gerry! Large companies and small business are actually interconnected and interdependent like organisms in an ecosystems. It is very easy for a large company to fail to appreciate these inter-dependency relations and its impact on them. Governments and society ofetn also fail to appreciate the full picture of small businesses, including their potential for innovation.
Gerry Boyle said:Two key issues I would say get in the way of collaboration:
1. Businesses don;t think sufficiently strategically about micro-enterprises - indeed they are very often ignorant of which micro-enterprises are in their value chains. But this is slowly changing both because of risk management (UN Guiding Principles, for instance) AND companies starting to see the advantage they can build by managing their relationships with, and investment in, micro-enterprises
2. Governments and donors do not see informal micro-enterprises as a path to future economic development - they too easily jump to the other end of the value chain of ODI and export markets. However, as increasing numbers of companies will acknowledge, having an effective micro-enterprise supplier base or distribution network is really important to business success. Governments and donors therefore need to think a lot harder and more positively about improving the environment for micro-enterprises.
Richard Gilbert said:Thanks for the great discussion. Let’s move on to our final question:
Q3. What are the key challenges that limit collaboration across companies, governments, civil society organisations and donors? What are examples of effective collaboration and what has made them successful?
Hi Andres,
While I understand your point, I see companies more and more seeing this as part of their sustainability and future business, and less about reputation. Are they therefore more willing to collaborate with competitors? It really does depend on the individuals involved and whether they are able to make the case for pre-competitive collaboration that benefits everyone.
Andres Peñate said:
The key challenge that limits collaboration across companies is an undue emphasis on reputation as the key driver behind these programs. A company compete with all pother for reputation and therefore prefer programs where it is the lone force. This limits the reach and eventually the duration and traction of the program.
It’s time to close this live segment of the discussion – but it will stay open so please continue to post comments.
Many thanks to our panellists for sharing their experiences and insights and we hope that you find the Guide to strengthening micro-enterprise market systems through collaboration useful in your work.
Good afternoon from South Africa. I am Marius Joubert, CEO of Nxt Lvl Southern Africa. I want to join the conversation and possibly have one on one conversations with some of you. I believe we have a solution to the challenges we face.
For those interested in learning more on market systems from a donor perspective, check out microlinks.org. And be sure to check out some of the research from the "Leveraging Economic Opportunities" project, which can be found on that site.
Thanks, Richard. Thanks, all.
Richard Gilbert said:
It’s time to close this live segment of the discussion – but it will stay open so please continue to post comments.
Many thanks to our panellists for sharing their experiences and insights and we hope that you find the Guide to strengthening micro-enterprise market systems through collaboration useful in your work.
Richard, panelists and other contributors - many thanks from CARE and hopefully you will find the Growing Together report useful in your work with micro-enterprises!
Gerry
Thanks for the guide and putting this discussion in place Richard!
Richard Gilbert said:
It’s time to close this live segment of the discussion – but it will stay open so please continue to post comments.
Many thanks to our panellists for sharing their experiences and insights and we hope that you find the Guide to strengthening micro-enterprise market systems through collaboration useful in your work.
Rich discussion. Thanks all.
Thanks for the great discussion
Thanks everyone - look forward to continuing our collaboration through action-based research, sharing examples and insights, and especially learning from the amazing practitioners who are working to build more effective and sustained linkages between large companies and micro-enterprises.