How to Promote Youth Agripreneurs in Rural Africa
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How to Promote Youth Agripreneurs in Rural Africa
- 2. • Supporting entrepreneurship for development since 1999 in the sectors of waste management, water, sustainable agriculture and food production, and sustainable energy • More focus since 2013 supporting 190 entrepreneurs with 110 currently operating. Presentation is based on 70 startups who have been operating for more than two years • The startups collectively had 1.2 Billion EGP of revenues in 2017 - about 0.03% of Egypt GDP. They recycled 1% of Egypt Waste - 90% of Egypt Renewable Energy. • They are connected in clusters with 70 inter-business transactions and 12 joint investments • They have forward linkages with 7 countries (Malta, Spain, Netherlands, Kuwait, Morocco, Jourdan, and Kuwait) and backward linkages with 5 key Countries (Germany, Greece, Portugal, Hungary, and China) Relevant experience
- 3. • “In the public mind, entrepreneurs have been reduced to young people who want to create world-changing businesses that can quickly reach $1 billion or more in market value — the fabled unicorns” – silicon valley investors dream • In the present context a more useful definition “someone who sees an opportunity to create value and is willing to take a risk to capitalize on that opportunity” without relying on high capital - a startup is a young company (not a small one) that does the above • Entrepreneurship is not a magical solution to developing economies, yet it can be an important tool in sustainable development of markets among other tools Ground principles Quotes from “We Need to Expand Our Definition of Entrepreneurship” John Hagel III – Harvard Business Reviews – 26/9/2016
- 4. • We must recall that in development the entrepreneurs are only the means to an end and the startup is a tool among many to achieve developmental goals such as ✓ Sustainable job creation ✓ Delivery of products and services which raises quality of life of citizens ✓ Valorization of resources ✓ Preservation of environment • Entrepreneurship for development hence care about the macroeconomic impact of startups as much as returns for investors • It cares about indirect impact on markets and communities Entrepreneurship for Development; What is different about it
- 5. • Large firms can deploy products but they can rarely develop new business solutions that are tuned to local needs. It is simply too costly sometimes to tune solutions • Large firms are risk averse and needs to plan business in a clear stable market conditions • On the other hand, startups can ✓ Spearhead new markets due to their flexibility and closeness to client ✓ Catalyze existing markets by their capacity to deploy innovation fast ✓ Correct market failures and fill gaps in the value chain by their capacity to tune business solutions to local context ✓ Absorb higher risks in more turbulent markets and rapidly changing markets due to their agility Entrepreneurship for Development; Why it can be such a good tool
- 7. • Most entrepreneurial support programs are searching for this unicorn, the superstar which leads to programs being ran as contests and a survival of the fittest environment; a natural selection • In development we have to apply more thought and design • We have to ensure both the firm success and developmental impact are achieved • We have to selectively target where startups should be supported and gauge which market development objective can they achieve How to leverage entrepreneurship for effective development
- 8. • Half of the Story is in planning ! Choosing where to trigger innovation ✓ Be market oriented (in new markets) ! Careful mapping of market opportunities ✓ Be Value chain centered ! Understanding of value chains and how to fill their gaps and develop them through supporting services/products and bi-products ✓ Maintain a cluster on mind ! Treating startups as future clusters of interacting firms • The second half is in the implementation technique (out of the scope of the present talk) • The result is a cost effective and high success rate of 40% business support Elements of Success
- 9. • When spearing new markets, one answers questions related to ✓ which opportunities there is a market gap ✓ which opportunities can offer higher success to entrepreneurs ✓ which opportunities will achieve social impact and financial success ✓ ensure no barriers exist Business Opportunity Mapping for Spearheading Markets
- 10. Value Chain Centered – Filling the Gaps • PV Farming – Small farmer gaps in finance value chains – Fintech solutions and mobile payments (M-KOPA – Kenya) • Gap in fabrication of mounting structures – Startup triggered transforming the industry to 67% local manufacturing and cutting cost of product • Solar drying equipment raised quality of dried herbs and fruits THE POTENTIAL FOR EGYPTIAN START- UPS TO UNLOCK SOLAR TECHNOLOGY MARKETS IN AGRICULTURE – IFC – May 2018
- 12. Value Chain Centered – Branched Value Chains Traders Sugarcane Factories refineries retailers Net value added to the chain Sugarcane Value chain • Supporting value chains is well established approach to development • Yet, it is the maximization of return on resources that is the ultimate goal • In a value chain, capital, energy, water, and material moves linearly from the natural resource to the end market increasing value added • Increasing the efficiency and effectiveness of a value chain are both needed and can be done by startups which create branches to the value chain
- 13. Palm dates farming traders packing Paste production manufacturers retailers Exporters fronds to boxes Second grade to feed Left overs to drying Date pits to feed Date pits to bakeries Trimming services and bio pesticides Sustainable packaging Renewable energy Main chain Inward branch Outward branch Value Chain Centered – Branched Value Chains
- 16. • A plan on mind for interconnection of businesses ! increase their sustainability • 9 firms which delivered 90% of Egypt PV Systems • 9 firms have 27 forms of partnerships • Has single handedly developed Egypt PV industry till policy reform allowed large investments to come to the sector Cluster Orientation with Value Added THE POTENTIAL FOR EGYPTIAN START-UPS TO UNLOCK SOLAR TECHNOLOGY MARKETS IN AGRICULTURE – IFC – May 2018
- 18. Reflection as Early as Ideation • In Tunisia there is a sector specific implementation • Opportunities were mapped • Ideation program was centered around the value chain and how they can be branched and have the gaps within filled and identified • There is emphasis on integration and building partnerships (laying seeds of clusters) • We already see evidence of indirectly impactful ideas, branching of value chains, filling gaps in value chains
- 19. How to Track • We need time to monitor and understand impact • Revenues and jobs created are important but also the following ✓ Quality of jobs created ✓ Impact of forward and backward linkages are crucial too ✓ Markets spearheaded ✓ Indirect firms triggered ✓ Customers served/impacted
- 20. Takeaways • Entrepreneurship for development can be an effective tool in sustainable development of markets with impact beyond the firm and investors • Startups can spearhead and catalyze markets, fill value chain gaps, branch value chains to capture more value on resources • To achieve this; sector specific planned interventions are needed and designed intervention must be based on tools such as • Business Opportunity Mapping • Value chain analysis to identify gaps and branches • Having a view of startup clusters which can develop industries and markets • Despite the above usually delaying interventions and adding extra steps before on ground work, it increases success dramatically on all fronts