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:
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.
Thank for some great conversations and points raised . Micro-enterprises are key to building resilience and sustainability for large firms, but also for society at large. If you would like to learn more and continue the discussion, please feel free to reach out to me directly or to find out more on www.accenture.com/sustainability or https://www.accenture.com/us-en/accenture-development-partnerships
Thank you Gilbert for an excellent discussion session.
The key to build self esteem, in the case of the informal retailers of our 4e program in Latam, has been language. We use the tools of neuro science for this. We have identified the words and concepts that strengthen their self esteem and use them in our communication to them. Also, the program is full of symbolism designed to address this. In addition the program has an "upmarket" look and feel, it is not something for "poor" retailers, but something for important business partners and key leaders of their communities and families. If you want to know more please do send me an email to email@example.com
Graham Baxter said:
Fascinating Andres. How do you build self esteem or does it grow organically through successful enterprise?
Juan Carlos Thomas Soto said:
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.
Some effective examples of collaboration are when key actors can see a common prize or a shared threat. Often governments can be engaged to help a sector transform if there is a heavy dependence on imports - dairy in some countries in South Asia for instance. So the govt wants to help their own dairy sector to grow. The key is to help them engage with other actors, particularly commercial players, including MSEs, so a sector can respond to the opportunity. It's likely that key constraints, such as fodder supply, or AI availability, needs different public and private actors to engage to unblock that issue.
Other situations the main constraint may be where one group of actors are being hit hard by something and this has an impact on how effectively and efficiently they can engage. In Eastern Sudan pastorlaists were being affected by double taxation when they crossed state boundaries. A systemic approach helped actors see what effect this was having on the overall functioning of the system and so there was willingness to try to change it.
Juan, perhaps it will be useful to use a social impact measuring tool to account for the those non-financial benefits. As finance is the only language business seems to understand, I think the time is now to translate the social returns into the costs of not supporting micro-enterprised and the benefits of supporting microenterprises.
Juan Carlos Thomas Soto said:
There is a number of challenges but a recurrent one is around the promise of a business case, which is either neglected or overstated. We need to be upfront that incorporating micro enterprises in the value chain requires investments and that investment needs to pay off. If this is neglected, any corporate effort will be subject to volatile budgets and will find hard time to encourage the required long term support. Conversely, we need to realize as well that not all investments will traduce in tangible immediate profits but in a more sustainable environment to operate, which might be harder to measure but not less important because of that. Last, but not least, the public good that these interventions create should be highlighted to gain the support of public institutions as well but both the business case and the public good need to be measured to be compelling.
I am Pauline Smith and I run the Network of Women for Food Security in Jamaica. We work at helping poor landless women set up oyster mushroom farms for sale to the hotels. There is a lot of demand for the produce but we face many challenges. The biggest challenge with micro enterprises as the main out put of women's work in Jamaica is that it is not commercialized. We need a system that allows to to collect all the resulting production from the different women and communities and market it together.
Autumn Gorman said:
My name is Autumn Gorman. I work in the Office of Private Capital and Microenterprise in the Bureau of Economic Growth, Education and Environment at USAID.
Hi all - I am Mike Albu from the BEAM Exchange. We are a platform for knowledge exchange and learning focussed on market systems approaches in international development, supported by UK's DFID and the Swiss Agency for Development Cooperation (SDC).
I am late to this great conversation but want to really thank Gerry, Richard and Pamela for the excellent Growing Together report. It's the first time I have seen a convincing work that speaks to large corporates about 'market systems' in a language that business can understand.
Please explore the BEAM site - www.beamexchange.org - for loads more resources, case-studies and guidance about market systems development. I look forward to show-casing some of the examples shared in the discussion today.
Thank you for all concerned
Big corporations should actively support the developments of micro-enterprises. Though big corporations are advantageous in being resourceful, their focuses on bigger-sized markets often disallow them to respond to the needs of niche markets that have much potential for rapid growth. On the other hand, while micro-enterprises enjoy flexibility and limited competitions working in niche markets, they only have limited resources to develop their premature ideas into sophisticated products/services. Given micro-enterprises create minimal challenge to big corporations, by helping offering resources to help micro-enterprises to grow, big corporations in turns would have the opportunity to learn from the creativity of micro-enterprises and explore new customer needs, thereby supplementing the lack of innovativeness experienced by many mature corporations. Such collaboration definitely creates a win-win situation for both parties.