Creating an enabling environment for social and environmental entrepreneurship in Malawi
As one of the poorest countries in the world, Malawi is characterised by a largely rural population; 84 per cent of Malawi’s population lives outside cities and depends on agriculture as their primary source of income. A considerable lack of dynamics in the economy is reflected in the 2014 Global Competitiveness Index of the World Economic Forum, in which Malawi ranks 132nd out of 144 countries. Social and environmental entrepreneurship – as promoted by SEED – is only recently gaining traction in Malawi, where recognition of the value of entrepreneurial activity still remains limited, and the negative repercussions of business as usual, such as environmental degradation and pollution that especially affect the livelihoods of poorer parts of the population, were mostly not seen as an important matter to be dealt with.
Small, micro and medium enterprises (SMMEs) – in Malawi particularly microenterprises – make up a large proportion of economic activity and employment throughout the world. Their combined size, knowledge of local environmental conditions, and ties with the communities in which they operate represent a huge potential for sustainable development. In Malawi, SEED aims to enhance this potential in two ways: Firstly, it fosters the development of individual eco-enterprises by offering financial and business development support to the Winners of the SEED Awards. Secondly, SEED is promoting an enabling environment for social and environmental entrepreneurship in Malawi through the greening of Business Development Services (BDS).
The leverage effect of greening Business Development Services
At SEED, we see the set-up of a favourable ecosystem for social and environmental entrepreneurship in developing countries as a key pillar of our work and at the centre of this endeavour stands the greening of Business Development Services (BDS). Both conventional and social and environmental start-ups often require external support to turn their ideas into successful business cases. BDS range from e.g. advice on the appropriate legal form for incorporation to insights on managing supplier relations and to guidance on financial planning. The specific needs of each enterprise depend on the educational background and the distinguished experience and knowledge of its founders and its staff members: A start-up run by an engineer will be ahead of the game concerning technological solutions and be built around the most innovative business idea, but might need additional expertise on marketing and improved business model development.
Service providers, from government agencies to centres at universities and private consultancies, have emerged to serve the particular requirements of start-ups. Yet, in Malawi, affordable BDS and entrepreneurial skills training are lagging behind demand. Moreover, the integration of social, environmental and economic dimensions demands for special business models, new approaches for evaluating success, and creative ways of engaging with local communities and other stakeholders. Most often service providers are not acquainted with the concept of social and environmental entrepreneurship and the associated opportunities and challenges.
Experience from the Training of Trainers (ToT) session in Malawi: “Case studies make learning easy”
SEED aims to improve the quality of what service providers can offer to social and environmental enterprises, in Malawi and beyond. For this reason, we have planned for a series of Training of Trainers sessions: interactive workshops that equip service providers with the tools to expand their services to social and environmental enterprises and to consider social and environmental dimensions in their services for conventional start-ups. The first Training of Trainers on "Social and Environmental Enterprise Development" was held from 29-31 July 2014 in Lilongwe, Malawi in cooperation with the African Institute of Corporate Citizenship (AICC). Eighteen representatives of business service providers and institutions concerned with entrepreneurial solutions for social and environmental challenges came together, among others the Small and Medium Enterprise Institute (SMEDI), Oxfam, UMODZI Consulting, and the Malawian Ministry of Trade, Industry and Private Sector Development.
After a session that provided an overview of types of business models for social and environmental enterprises and positioned it in the ecosystem in Malawi, the participants learned about didactics and experienced the interactive methodology of SEED. On the basis of the SEED Enterprise Blueprint, the participants worked in groups on four case studies of social and environmental enterprises that are active in the agriculture, energy, waste and natural resource conservation sectors. Among other tasks, each group developed a value proposition for the businesses, pitched the idea behind the enterprise, and engaged in detailed financial analysis and financial planning.
Based on the SEED approach, all activities had a Triple Bottom Line-twist to them, e.g. the value propositions focused not only on economic, but also environmental and social benefits created by the enterprise. Other sessions then related directly to the key elements of social and environmental enterprises, such as the assessment of environmental, social and economic impacts, or the interaction with local communities. By making use of duly designed case studies that are as close to real business cases as possible the participants got a very good impression of how they can provide tailored support to social and environmental enterprises in Malawi. All participants stated that these “case studies made learning easy” and were eager to put the learning into practice in their daily work.
The way ahead: ToTs in Namibia, Mozambique and South Africa
Malawi proved a special case for SEED, as not only has it been SEED’s first Training of Trainers workshop in the country, but 2014 also sees the first Malawian enterprises as SEED Award Winners. All four Malawian Winners of the SEED Africa Awards 2014 will benefit from the relationships SEED has established with local service providers, as during the SEED Catalyser, selected external in-country advisors will support the Winners in improving their business plans.
However, not just the four Malawian SEED Africa Winners will benefit from this Training of Trainers; also other social and environmental start-ups in Malawi will benefit from the increased capacities of local institutions and service providers to cater to their specific needs. As only 8 per cent of Malawi’s population is connected to the grid, especially the energy sector yields many opportunities for social and environmental enterprises.
Building on the success in Malawi, from 29 September to 2 October 2014 the SEED Initiative will hold a second Training of Trainers in Windhoek, Namibia. This training will be implemented in cooperation with our local partners, the Southern Africa Innovation Support (SAIS) programme and the Namibia Business Innovation Institute (NBII). Additional training will follow in Mozambique and in South Africa.