by Alison Griffith, Senior Policy and Practice Advisor, Practical Action and an ACRE Supervisory Board member
A new guide for companies to strengthen micro-enterprise market systems ‘Growing Together’ has just been launched. Created by SABMiller, CARE International UK, Business Fights Poverty and the Harvard Kennedy School Corporate Responsibility Initiative, this report is an important milestone in terms of a shared understanding of a collaborative market systems approach. I was able to contribute to the discussions from both a Practical Action and ACRE perspective – as part of an online Business fights Poverty panel – and am sharing a short summary to celebrate the launch.
The research points to five categories of interconnected needs for micro-enterprises:
- Business and technical skills
- Access to fair and well-functioning markets
- Access to affordable, appropriate financial services
- Infrastructure and services
- Enabling policy and regulatory environment
BFP’s Richard Gilbert helps further set the scene;
“Our starting point in the report is to emphasise that micro-enterprises are a critical source of employment and livelihoods in communities. Indeed, many companies rely on the effective operation and growth of micro-enterprises in their value chains, as suppliers, distributors, retailers and customers.”
This timely work is based on the growing recognition that interventions that ‘cherry pick’ micro-enterprise needs, are unlikely to achieve the sustained impact they set out to support. However, if set within a joined up ecosystem (one that is able to give micro enterprises access to valuable networks, technologies, experiences and assets), interventions are much more likely to support the creation of a route beyond poverty. Growing Together explores the connectedness of market systems as being at the heart of micro-enterprise development and shows companies why it is particularly relevant to them and what they can do about it.
The report is brought to life with case study examples, one being Africorps, a Sudanese company who are working with ACRE and Practical Action to improve opportunities in the hibsicus market system. Thousands of micro-enterprises and producers, rely on hibiscus as an important crop. It’s an example of a company and other stakeholders taking a more holistic form of collaboration with the aim of strengthening the broader “market system”.
ACRE has understood that this as an important approach from the outset and has therefore identified this as a key area for learning: i.e. how impact investment can contribute to the better functioning of the system and conversely how a stronger system can improve the environment for impact investment success.
To support companies in achieving a more holistic form of collaboration, the research identified five critical success factors which are essential for designing and implementing market systems approaches:
- Understand micro-enterprise needs to gather insights on what constrains and motivates them
- Identify market system roles, capabilities and incentives to determine who should be part of a collaborative approach
- Establish the value proposition to outline how addressing micro-enterprise needs can achieve greater commercial value and social impact
- Coordinate effectively to ensure all stakeholders are committed and aligned to create value for all
- Measure results to demonstrate the impact achieved
These five points help us uncover a multi-layered learning journey together. Indeed, these ‘layers’ need to be part of an ecosystem that inter-connected stakeholders can understand and contribute to. Those of us working who are external to the system but are working to support and strength also need to collaborate so impact is maximized – not just in terms of socio-economic growth and benefit, but also in terms of defining the shared learning that is able to make individual enterprise journeys scalable.
ACRE believes that Growing Together will prove to be an invaluable resource within an enterprise toolkit aimed at companies themselves but also at those working to support enterprises of all sizes.