How can we strengthen collaboration in support of micro-enterprises in value chains?

Micro-enterprises are the lifeblood of many communities and a critical source of employment and livelihoods. Larger companies rely on the effective operation and growth of micro-enterprises in their value chains, often as suppliers, distributors, retailers and customers.  However, many micro-enterprises today are struggling just to survive.  Research points to five areas of need (business and technical skills, access to fair and well-functioning markets, access to affordable, appropriate financial services, infrastructure and services and enabling policy and regulatory environment) that limit the ability of micro-enterprises to thrive, of companies to realise the commercial value of their relationship with micro-enterprises, and of the full potential of micro-enterprises’ social impact in communities. 

 

These needs are also highly interconnected and cannot be tackled in siloes, which is why there is growing appreciation amongst stakeholders that interventions that do not address the full range of micro-enterprise needs can reduce the potential for achieving greater sustained impact – both for micro-enterprises and the companies supporting them.   In recognition of this, a new report by SABMiller, CARE International UK, Business Fights Poverty and the Harvard Kennedy School Corporate Responsibility Initiative highlights the need to move towards a more holistic form of collaboration with the aim of strengthening the broader “market system” in which their value chain and micro-enterprises operate. The report also identifies five critical success factors which are essential for designing and implementing market systems approaches.

 

To mark the launch of the new report, Business Fights Poverty is hosting an online discussion to explore the following questions:

 

  • The report highlights five key interconnected needs of micro-enterprises that would enable them to thrive – how do these needs exist for the micro-enterprises you engage with and support? Are some more important to address than others?

 

  • 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?

 

  • 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?
Editor's Note:

Welcome to this online written discussion. To post comments you will need to sign in / sign up to Business Fights Poverty. A list of recent comments is shown in the right-hand side bar and will refresh every 5 minutes. To refresh more often, please click on the refresh icon in your browser or on the link below.

Views: 2885

Reply to This

Replies to This Discussion

This is a great point Andres, we found low levels of confidence when we conducted the needs assessment in Europe. This insight helps frame the response and how to interact, engage, motivate and learn together.

Andres Peñate said:

I would say the most important is probably not in the list. The most important need in my opinion is not economic, financial or technical, although all of them are critical. In my opinion the most important need is psychological. Small businesses owners need first of all more self esteem to be able to cope with the challenges they confront.   

Hi Elaine - That's interesting.  Once you have identified the needs - how do you prioritise which ones to address?



Elaine McCrimmon said:

Exploring the real needs of micro-enterprises upfront is hugely insightful and can be a much more impactful and resource efficient way to develop effective interventions in support of micro-enterprises.

In SABMiller Europe, we undertook research in 4 of our key markets (Italy, Poland, Romania and Czech Republic) to understand the challenges faced by small retailers in our distribution chain. While the terminology used to describe the challenges differs slightly from what is used in the report, our findings reflected many of the five needs identified.

For example, retailers said they lacked understanding of store and stock management, lacked funding to invest in their business and, had concerns about bureacracy and red tape.

So I think the five needs identified in the report offer a useful structure that can act as a starting point for an organisation to then drill deeper into understanding how these needs manifest themselves for specific micro-enterprises.

br/>

Jolene Dawson said:



Richard Gilbert said:

Thanks everyone - Let’s kick off with the first question:

Q1. Our new report highlights five key interconnected needs of micro-enterprises that would enable them to thrive – how do these needs exist for the micro-enterprises you engage with and support?  Are some more important to address than others?

    1. Understanding Micro-Enterprise Needs :

  • Many of the micro-enterprises we have worked with feel misunderstood. There seem to be largely due to misunderstandings of deep cultural norms (e.g. some farmers feel spoken at, and cultural norms prevent them from interrupting or correcting the person speaking).

  •  In this context, both the corporates or donor organisations as well as the beneficiaries or micro-enterprises make faux-pas – and things get lost in translation.

  • By focussing on human-centred design, Accenture Development Partnership have made huge in-roads into setting up healthy partnerships between corporates, donors and micro-enterprises in health, agriculture and finance. This concept ensures that the very human beneficiary is front and centre to the design of all elements of the programme or products in question.

Hi everyone. I'm Jane Nelson, director of the Corporate Responsibility Initiative at HKS. I very much agree with previous points on starting with a more human-centered or micro-enterprise centered design and really understanding the context and personal needs of the micro-entrepreneur herself or himself, in order to achieve more effective linkages and sustained growth for both the micro-enterprises and the companies they are working with. At the same time, if we are to have any hope of scaling high potential models and initiatives, to my mind one of the most important needs on the list would be at the other end of spectrum - it would be an enabling policy and regulatory environment, as this can help to create incentives and structure for addressing all the other needs.   

In Latam we did exactly the same process than Elaine is describing, but in a different context, the context of the small informal retailers at the base of the pyramid. To do that we hired the services of anthropologists and sociologists first so that we had the right lenses to understand these retailers, which are different than others, as human beings and not just economic agnetnts in our value chain. We complemented these studies using neuro science methods used in marketing to understand the reaction to words and emotions. 


Excellent point. Women often face more constraints or have different priorities due to family obligations or other social dynamics. I heard of one story where the women reacted unexpected to a new water pump was installed in their village because they missed the social time they had while fetching water.


Catalina Garcia said:

In our part of Latin America (Colombia, Peru, Ecuador, Honduras and El Salvador) since the majority of mom and pop shops are owned by women, the most important need for them to also address their family needs.  For them business and family are one thing.  So they need to manage both correctly and  lead their families properly and impact positively their communities.

Prioritising is key but it is not easy. What we found is that while there are similar needs 'what works' is context specific and the priority should be local. Aligning closely elements of support for micro enterprises with either a regulatory change or business activity helped to gather momentum and pace.


Richard Gilbert said:

Hi Elaine - That's interesting.  Once you have identified the needs - how do you prioritise which ones to address?



Elaine McCrimmon said:

Exploring the real needs of micro-enterprises upfront is hugely insightful and can be a much more impactful and resource efficient way to develop effective interventions in support of micro-enterprises.

In SABMiller Europe, we undertook research in 4 of our key markets (Italy, Poland, Romania and Czech Republic) to understand the challenges faced by small retailers in our distribution chain. While the terminology used to describe the challenges differs slightly from what is used in the report, our findings reflected many of the five needs identified.

For example, retailers said they lacked understanding of store and stock management, lacked funding to invest in their business and, had concerns about bureacracy and red tape.

So I think the five needs identified in the report offer a useful structure that can act as a starting point for an organisation to then drill deeper into understanding how these needs manifest themselves for specific micro-enterprises.

br/>

Jolene Dawson said:



Richard Gilbert said:

Thanks everyone - Let’s kick off with the first question:

Q1. Our new report highlights five key interconnected needs of micro-enterprises that would enable them to thrive – how do these needs exist for the micro-enterprises you engage with and support?  Are some more important to address than others?

    1. Understanding Micro-Enterprise Needs :

  • Many of the micro-enterprises we have worked with feel misunderstood. There seem to be largely due to misunderstandings of deep cultural norms (e.g. some farmers feel spoken at, and cultural norms prevent them from interrupting or correcting the person speaking).

  •  In this context, both the corporates or donor organisations as well as the beneficiaries or micro-enterprises make faux-pas – and things get lost in translation.

  • By focussing on human-centred design, Accenture Development Partnership have made huge in-roads into setting up healthy partnerships between corporates, donors and micro-enterprises in health, agriculture and finance. This concept ensures that the very human beneficiary is front and centre to the design of all elements of the programme or products in question.

Catalina - CARE's focus is on women and undoubtedly the overlap between "business" life and family life is a huge issue for women.  We therefore work much more widely across communities and especially with men and boys to develop changes in gender attitudes and norms so that women's economic contribution is better recognised and the care burden is shared.  The report spends a bit of time highlighting the importance of looking at the value chain with a gender lens to better understand these issues



Catalina Garcia said:

In our part of Latin America (Colombia, Peru, Ecuador, Honduras and El Salvador) since the majority of mom and pop shops are owned by women, the most important need for them to also address their family needs.  For them business and family are one thing.  So they need to manage both correctly and  lead their families properly and impact positively their communities.

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?

n SABMiller Latam, we developed a research in 6 countries  (Colombia, Peru, Ecuador, Honduras and El Salvador) to understand not only their needs but their fears and dreams.  So we can approach them in more complete way.  We change our relationship with the retailers, from asking them to buy our products to support them face their life challenges and family needs   

For example, in one market, nee regulation came into force for small retailers and there was a need to train retailers on the new requirements. This was an opportunity to help retailers improve their business skills.

Elaine McCrimmon said:
Prioritising is key but it is not easy. What we found is that while there are similar needs 'what works' is context specific and the priority should be local. Aligning closely elements of support for micro enterprises with either a regulatory change or business activity helped to gather momentum and pace.


Richard Gilbert said:

Hi Elaine - That's interesting.  Once you have identified the needs - how do you prioritise which ones to address?



Elaine McCrimmon said:

Exploring the real needs of micro-enterprises upfront is hugely insightful and can be a much more impactful and resource efficient way to develop effective interventions in support of micro-enterprises.

In SABMiller Europe, we undertook research in 4 of our key markets (Italy, Poland, Romania and Czech Republic) to understand the challenges faced by small retailers in our distribution chain. While the terminology used to describe the challenges differs slightly from what is used in the report, our findings reflected many of the five needs identified.

For example, retailers said they lacked understanding of store and stock management, lacked funding to invest in their business and, had concerns about bureacracy and red tape.

So I think the five needs identified in the report offer a useful structure that can act as a starting point for an organisation to then drill deeper into understanding how these needs manifest themselves for specific micro-enterprises.

br/>

Jolene Dawson said:



Richard Gilbert said:

Thanks everyone - Let’s kick off with the first question:

Q1. Our new report highlights five key interconnected needs of micro-enterprises that would enable them to thrive – how do these needs exist for the micro-enterprises you engage with and support?  Are some more important to address than others?

    1. Understanding Micro-Enterprise Needs :

  • Many of the micro-enterprises we have worked with feel misunderstood. There seem to be largely due to misunderstandings of deep cultural norms (e.g. some farmers feel spoken at, and cultural norms prevent them from interrupting or correcting the person speaking).

  •  In this context, both the corporates or donor organisations as well as the beneficiaries or micro-enterprises make faux-pas – and things get lost in translation.

  • By focussing on human-centred design, Accenture Development Partnership have made huge in-roads into setting up healthy partnerships between corporates, donors and micro-enterprises in health, agriculture and finance. This concept ensures that the very human beneficiary is front and centre to the design of all elements of the programme or products in question.

  • Accenture Development Partnerships has delivered over 325+ partnership related projects where corporates, donors, governements and communities come together to achieve a joint outcome. Over this time we have been advocating the move from philanthropic, to opportunittics to strateic and finally transformational partnerhips. What this report highlights is the latter – transformation at a market-system level.



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?

CARE are deeply engaged in attempting to improve the opportunities and operating environment for women-led micro-enterprises.  While many of the women micro-enterprises we work with provide goods and services only to their local communities, we also recognise the opportunities that participating in global value chains can give women – provided they are properly recognised and supported.  But we know that even where women play a key role in the value chain, their involvement can be invisible.  Therefore, companies must identify where women work, must develop a clear gender strategy and must articulate the business case for supporting women.

However, mere exhortation is not going to change much, so that’s why we have tried to be much more practical, and have been delighted at the opportunity to work with our co-sponsors to develop this practical guide to both WHY companies should collaborate better to support micro-enterprises across their value chains, and also HOW they can do so.  We also highlight in the report the additional challenges faced by women micro-enterprises – including legal obstacles, but also the many issues that confront women due to social and cultural attitudes to gender.  We know that these issues can only be properly and sustainably addressed by a network of stakeholders working to effect systemic change – many problems are interrelated and solutions are interdependent.  Within this, companies can play a key role in bringing focus to the issues, and in building up alliances of stakeholders.

Reply to Discussion

RSS

Latest Activity

anatole francisco-martin is now a member of Business Fights Poverty
16 hours ago
Robyn Deamer is now a member of Business Fights Poverty
Sep 13
Profile IconAriana Barat, Ronald Hemerik, Stacey cram and 2 more joined Business Fights Poverty
Sep 12
Profile IconOmar COULIBALY, Ifeoma Okonji, Maximin ANDE and 2 more joined Business Fights Poverty
Sep 7

© 2017   Inspiris. Business Fights Poverty was created and is managed by Inspiris, a Certified B Corp.   Powered by

Badges  |  Report an Issue  |  Terms of Service

Google+