|Promoting Women's Entrepreneurship Development Based on Good Practice Programmes: Some Experiences from the North to the South - Working Paper N° 9 (ILO, 2001, 107 p.)|
|3. PROMOTION OF MICRO AND SMALL ENTERPRISE|
This section will review the various approaches an agency can choose from in designing enterprise promotion programmes. Because one agency can have multiple programmes, it also can have multiple approaches (Edgcomb, Klein et al. 1996). For example, one programme can have a subsector focus while another crosses sectors. Choice of promotional strategies will depend on the mission of the agency, the objectives of the programme and the needs of the clients (ILO 1999).
A current trend in enterprise promotion is the use of a business-like and market-based service delivery strategy (Dawson 1997; Edgcomb, Klein et al. 1996; Committee of Donor Agencies for Small Enterprise Development 1998; Hallberg 1999). This strategy bases service design on the needs and demands of clients for what services to provide, and also for where, when and how to deliver them (Dawson 1997; Committee of Donor Agencies for Small Enterprise Development 1998). It depends on private sector providers and works to develop markets for support services so that clients are willing to pay for services rendered (Dawson 1997; Hallberg 1999).
This trend can be both positive and negative for women in the MSE sector. The trend toward needs assessment is positive, particularly if it focuses beyond just what services to provide and is gender-sensitive. Because of women's gender-specific roles and responsibilities, women tend to have different needs regarding where, when and how services should be provided, needing more flexibility in timing of programmes, different content of programmes, and support at different stages of start up (European Commission 1998). With a demand-led approach these needs have a greater chance of being addressed. However, this will only occur if gender sensitivity is applied in needs assessment procedures. Without such gender-awareness, those who are already disadvantaged may benefit less in a demand-led approach because they are less willing or able to articulate their needs (European Commission 1998). Services may end up designed for those with the willingness and ability to speak, such as the better off and men. Some of the specific approaches agencies can choose from in designing promotion strategies are discussed below.
3.3.1 Single service or integrated programmes
Microenterprise support agencies can choose to provide a single service or a group of linked services. Provision of a single service has been labeled a minimalist strategy and is often viewed as a more efficient way to deliver services as the programme is focused on one thing, and can develop the specialized knowledge and skill required to provide it well (ILO 1999). However, most practitioners and theorists in this field recognize that it is hardly ever only one constraint that limits the success of new or experienced MSE owners. Providing credit or training alone often is not enough to meet the needs of male or female entrepreneurs. This may be more true for women, who face the standard constraints, plus gender-specific constraints.
Integrated strategies were developed to address the multiple constraints facing many entrepreneurs. They combine multiple services within one programme. Often these programmes start with entrepreneurship development, then provide services such as financing, technical assistance and business planning (OECD 1998b). These strategies require a broad base of knowledge about the various services provided and can be expensive. The minimalist strategy is perceived as better in terms of sustainability and cost efficiency. Integrated strategies can be more effective and may have greater impact. A review of the various types of services that programmes can offer is in Appendix 1. It defines each service, and lists general issues about their provision, as well as relevant gender issues.
3.3.2 Mixed strategies and partnerships
Mixed strategies and partnerships are two innovative methods of providing services. A mixed strategy is a type of integrated service delivery model. Instead of focusing on providing multiple services to one client group, it seeks to diversify the client base, offering different types or intensities of services to different groups (Edgcomb, Klein et al. 1996). This allows for the mixing of long-term intensive and short-term minimalist service delivery, facilitating outreach, impact and programme sustainability. Minimalist information services or short-term courses can be delivered to a more 'advanced' client group, often for a fee; while more intensive, costly services are delivered to those requiring more assistance, such as low-income groups at the start-up stage. This combination of high and low cost services and the increased number of clients served means that costs per business or per client served tend to decrease with the use of a mixed service model. This reduction can help agencies become more sustainable as the level of outside funds needed should decrease, particularly if the full cost of minimalist services are covered by client fees. A mixed strategy of service delivery may negatively affect impact, but it does not have to do so. The above combination of minimalist and high intensity services could positively influence impact, giving two different groups the level of services they need to improve their outcomes. Careful attention to the mix of services and clients is central to balancing outreach, sustainability and impact.
Partnerships allow agencies to specialize in a single type of service, and to meet their clients' range of needs through referrals to partner agencies specialized in other services (Committee of Donor Agencies for Small Enterprise Development 1998; ILO 1999). Integrated services are delivered, but by a range of providers. This allows each agency to remain cost efficient by specializing, and still meet client needs. Those interested in developing partnerships must recognize the high costs involved in making and maintaining linkages and ensuring quality service delivery from all providers
3.3.3 Sector-specific versus cross sector
Another design choice is whether to offer services to clients across sectors or to offer services to clients within a particular sector. Sector focused service delivery is most valid when constraints are thought to be sector-specific, and can be inappropriate when the population to be served is dispersed or the objectives of an agency include serving a particular group, i.e. women (Dawson 1997; CCIC Policy Team 1996). However, even when serving a particular group, a sector focus can be justified if that group is further segregated into certain categories, as women are. A sectoral focus allows the development of specialized knowledge of the constraints and opportunities influencing a sector, and the leveraging of effects across all the entrepreneurs within the sector (CCIC Policy Team 1996; Chen 1996). This can be accomplished through the application of subsector analysis.
A subsector is defined by a final product or a key raw material or commodity. It consists of all the enterprises linked to the product or raw material of interest, from supply to production to distribution (Haggblade and Gamser 1991; Chen 1996). Subsector analysis examines the different vertical supply channels related to the key good, focusing on both competition between the different channels and coordination within them3. It is both diagnostic and prescriptive in that it analyzes the situation within a subsector, diagnoses potential opportunities and constraints, and then goes on to prescribe interventions to either take advantage of opportunities or alleviate constraints (Chen 1989; Boomgard, Davies et al. 1991). A central assumption is that there are leverage points where interventions will bring benefits to large numbers of subsector participants, helping agencies utilizing the tool to achieve scale (Chen 1996; Boomgard, Davies et al. 1991; Haggblade and Gamser 1991).
3 A channel describes "how goods and services flow among participants (e.g. who buys from whom), what types of relationships operate between participants, and how the whole network or system interacts" (Chen 1996:129).
While a sectoral approach appears to be beneficial in terms of achieving scale and outreach, and may improve efficiency and effectiveness, many programmes still maintain a cross sectoral focus. This necessitates a broad range of expertise, and in cases where this expertise is lacking, the success of interventions will be limited (Loucks 1999).
3.3.4 Centralized or decentralized
Services can be administered at the national level, or decentralized to regional or local levels. There is quite a consensus that decentralized delivery levels as close to the MSE owners as possible are best, enabling programmes to meet MSE needs within the local context (Levitsky 1996; Sweeney 1997; Committee of Donor Agencies for Small Enterprise Development 1998). This allows for more effective delivery as local groups are better able to determine demand and service needs. However, there are also calls for centralized coordination of service provision strategies which would improve the cohesiveness of strategies and ensure common quality standards for service provision (ILO 1998; OECD 1998a).
3.3.5 Gender-neutral or women-specific
The argument for a women-specific strategy of entrepreneurship promotion was presented in the introduction. However, some caveats will be discussed here, in terms of how and why a gender-neutral approach may be appropriate. While a women-specific approach may be better theoretically in ensuring that women's needs are met, in reality women-targeted programmes may - like other programmes - lack the capacity to develop women's business and entrepreneurship skills (ILO 1999). While women-specific programmes tend to be better at improving women's personal development, this is not enough to assist women in becoming entrepreneurs. The programmes may be more focused on income generation, may lack market feasibility and be too reliant on subsidies
Women-centred programmes may isolate women instead of integrating them into the mainstream economy. They also may leave the norms, practices and institutions of small business development unchallenged from a gender perspective and unchanged (Kabeer 1995). For these reasons, gender mainstreamed programmes may be better in some circumstances, with these circumstances being an awareness of the differential constraints on women, and the treatment of women, not men, as the group around which programmes are designed (Eigen 1992). However, this is a very infrequent occurrence, and as long as general microenterprise promotion programmes do not recognize women's needs, women-targeted assistance may be best. In the end it is difficult to make a generalization favouring either women-specific or gender-mainstreamed programmes as context will play a major role in determining which approach will do the most for women (Kabeer 1995). It would be preferable for gender mainstreamed programmes to be supported or complemented by women-specific programmes and positive actions where necessary.
3.3.6 Income generation or entrepreneurship development
There are two different foci of microenterprise development strategies targeted at women, one being income generation and the other entrepreneurship promotion. They both have different rationales and often very different outcomes. Income generation strategies are influenced by a welfare, or poverty alleviation, rationale (Mayoux 1995). They seek to draw women into income earning work due to the positive benefits for families and the poverty reduction potential of women's economic activity. Their central focus is on women making money, either as individuals or groups (Kraus-Harper 1992). Often they lack a market focus, promoting the production of low quality products, using women's traditional skills, for which there is no or very low demand (Mayoux 1995). The programmes may succeed in the short-term in increasing women's income, but they do not often produce sustainable enterprises, or become sustainable themselves. They tend to be paternalistic, with the women involved making few decisions and gaining little independence or self-esteem from participation.
Entrepreneurship development has an economic rationale and seeks to develop women into entrepreneurs - independent actors in the economic sphere, ready to find business opportunities, marshal resources and manage a business (Kraus-Harper 1992; OECD 1998b). Efficiency is often the guiding principle, centring around a desire to use women's labour to the best economic advantage. However, if programmes are designed in a gender-aware manner, incorporating personal development, awareness raising and a keen sense of women's needs and constraints, their ends also could have empowerment potential. The focus of this paper is on promoting gender-aware entrepreneurship development which has the potential for developing sustainable MSEs through demand-led, marketd-based approaches.
3.3.7 Other design factors
Other issues that enter into programme design are whether to focus on: a) MSEs only or all enterprises regardless of size; b) start-ups, expansions or both, and c) providing services to individuals or groups. In terms of size-based criteria, from a gender perspective it is important to remember that gender constraints affect women regardless of the size of their enterprise. The magnitude of the effects may differ by women's class, race, education or income levels, but they still have a role. For this reason, it may be appropriate for some agencies to target all women-owned enterprises, particularly those agencies working to influence policy and increase the visibility of women's contribution to the economy. For those providing services to business owners, it may be better to maintain a focus on MSEs so as to limit the breadth of services requested. However, it may also be good to allow for a mix of clients within the MSE category in order to improve the chances of achieving scale and sustainability.
The services provided, the objectives of the agency and the method of service delivery will all influence programme choices regarding how to focus services. Those following a mixed strategy may be more inclined to serve both start-up and expanding enterprises, while agencies focused on helping women become independent of public assistance may focus on start-ups. Providing credit and training may best be done through group provision, while consultancies and mentoring call for an individual approach. Thus, context and mission will play a large role in many of the design decisions discussed above. From a gender perspective, providing some services in a group format may be beneficial in providing an opportunity to share experiences and build networks.
Key Learning Points from Chapter 3
· The rationale directing the actions of an MSE support agency will define what a successful MSE is, i.e. the outcomes of interest. An efficiency rationale will be oriented towards economic growth outcomes; a welfare rationale toward poverty reduction and an empowerment rationale toward equality and justice outcomes. The first two rationales tend to work with women entrepreneurs as instruments to other ends, while the latter seeks to empower women for their own benefit.
· There are five areas of performance important in evaluating MSE support programme success. They are: outreach/scale, effectiveness, cost efficiency, sustainability and impact. Often it will be impossible for an agency to achieve high performance in all five areas as modes of achieving some of them are contradictory.
· Outreach refers to the success of an agency in reaching its target population with its services. Scale means the agency is able to reach a wider target population, or more of its original population. Some only refer to numbers reached when evaluating scale, while others incorporate more substantive elements such as numbers actually using or benefiting from the services. Disaggregating data by gender is necessary in tracking a programme's success in reaching women.
· Effectiveness is the ability of an agency to meet its clients' needs and their own objectives. It is central to good practice. Gender-sensitive needs assessments are vital to understanding client needs.
· To be cost efficient, an agency must use its funds to achieve the greatest impact for the lowest cost. Cost efficiency will be influenced by the structure and approach used in providing services.
· Sustainability can be applied to MSEs - their survival rates - and MSE support agencies and their individual programmes. Service providers can be sustainable if they are able to sustain their services and impact after funding ends (financial self-sufficiency), or if they can maintain service levels with financial support from a range of sources. Sustainability levels are influenced by an agency's culture, structure and service delivery method.
· Programme impact is the size and duration of the effect of services on MSE performance and on the well-being of MSE owners and their families. Impacts are hard to monitor as it can be difficult to isolate the effects of services from other environmental factors. For this reason impacts are often proxied by numbers using services, thus missing how effectively services perform. Non-economic impacts tend to be ignored in monitoring performance. This can be especially misleading when evaluating the performance of programmes supporting women's entrepreneurship.
· In designing programmes, agencies have a wide range of choices to make. These include: offering a single service or integrated services; targeting clients at a range of entrepreneurial abilities and business sizes; entering into partnerships to provide services; offering sector-specific or cross-sectoral programmes; decentralizing service provision, and targeting only women or all entrepreneurs. These decisions will influence general performance, as well as how effectively programmes reach women.