How To Improve Entrepreneurship & Innovation Outcomes In Africa

ScaleUp Africa's mission is simple: to promote social innovation, local African expertise, strategic commuication, entrepreneurship and decent economic opportunities for women and youth of African descent. In recent months, ScaleUp Africa has been invited to contribute towards local expert engagements by partners in the Banking, Finance and International Development sectors including Fidelity Bank, British International Investment, Prince's Trust International - each intent on developing new models designed to achieve better financial and social returns from the delivery of more effective, private sector driven small business support.

Central to these conversations has been the need for: talent development and upskilling, community enterprise development, a more market-driven approach, capacity building and partnerships with specialist entrepreneurship support organisations, the sustainability and circular economy opportunities. So, how do we improve the performance of our Entrepreneurship and Business Development ecosystem building efforts for more significant financial returns and Impact..

For local entrepreneurs and communities to truly benefit from the opportunities of a single African Market, I'd like to share some helpful frameworks, models and concepts our entrepreneurial ecosystem practitioners should keep in mind as we continue to improve and rebuild highly effective, impactful service offers for SMEs.

Investors, Banks, International Development Practitioners must study frameworks for effective Small Business service provision, formally engaging with private sector intermediaries that have the nimbleness to adapt and create innovative models for stronger impact and ecosystem outcomes.

According to a recent evidence based review published by the World Bank's Women Entrepreneurs Finance Initiative (We-Fi), entrepreneurship support efforts by donors, hubs, intermediaries, consultants and governments in emerging market entrepreneurial ecosystems must focus on interventions and innovative, new products the meet the needs of women. These include cash-flow based lending by financial institutions, tailored segmentation-based programmes and the integration of social services such as networking and inclusive, male advocacy to achieve superior outcomes for women in enterprise.

The Argidius Foundation's SCALE framework provides a guide for Business Development Service (BDS) providers and funders to keep in mind as they continue to develop and deliver services to boost entrepreneurial outcomes and is summarized below:

Select the right enterprise: Argidius found that good selection improves the performance of your program, enables you to better tailor your program(s) to specific enterprises needs, enables peer-to-peer learning within cohorts, and enables the identification of entrepreneurs who are motivated to grow and ready to make the changes necessary to succeed.

Charge for services: entrepreneurs with skin in the game tend to take programmes more seriously, even if they are asked to pay a nominal sum. This is a strategy worth pursuing in conjunction with education and communication to explain the value of your service.

Addressing Problems and helping entrepreneurs to solve them, fosters growth, trust and productivity while promoting peer-to-peer learning during interventions.

Learn by evaluating enterprise performance: Performance management allows Business Development Service providers and funders to identify where improvements can be made. Enterprises that better collect and use their own data, improve their businesses performance.?

Example: Last but not least, service providers that lead by example and continue to develop their own organizations, are better able to support enterprises.?Addressing internal challenges can increase impact, attract funding and improve prospects for financial sustainability of BDS providers themselves.

"The right kind of innovation not only builds companies—but also builds countries." The Prosperity Paradox

The Prosperity Paradox provides another rigorous, theory-based framework for the work we do at ScaleUp Africa. The Prosperity Paradox?identifies the limits of common economic development models, which tend to be top-down, export and efficiency seeking efforts. By focusing entrepreneurial pursuits on deep needs and market failures, we can improve the chances of supporting ventures that have the potential to create new markets altogether like Mo Ibrahim's Celtel did for the African mobile phone and Indomie has done for the African noodle sector, generating billions of dollars in taxes, local infrastructure, operational skills (distribution, training, retail etc) and long term jobs.

Funders and government agencies committed to entrepreneurship need to build the capacity of local business development service providers in order to unlock innovative delivery models that can scale and deliver superior impact outcomes, as well as financially sustainable returns.

Lastly, by now it should be clear that Diversity gets results, yet we are still dealing with an international ecosystem that talks the talk but fails to walk the walk. For example, how many Africa-facing organisations have Black African team members or decision makers in senior positions? How many times do we see international 'experts' flown in to deliver services and knowledge which local experts have the capacity to deliver? How many pledges have we read about that failed to materialize or fell short of any meaningful impact? As we approach another Black Philanthropy Month in August, let us advocate for more racial equity in funding and Development organisations that operate in developing economies.

As we enter the second half of 2022, let's focus our minds on some of the evidence and theory from emerging market ecosystems. With patient capital and blended finance models, there is an opportunity for strategic partnerships that open up space for new approaches, interventions and services (beyond training entrepreneurs and collateral based loans; beyond inflexible, pre-determined programmes), longer-term support for Business Development Services in the private sector and hands-on tailored support for small business owners. Dynamic, private-sector driven BDS is a public good that needs more resources and support to generate out of the box models for out of the park results. Together, we can deliver superior results with the right kind of partnerships and resources.

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