Supporting small businesses and social entrepreneurs to grow and develop in emerging markets is a mission shared by development professionals around the world. Jon Shepard explains how EY’s new Enterprise Growth Services is contributing.
A Ugandan farmer gazes out across fields of crops, ready to be harvested to take to market. The increasing prevalence of such an image is down to many factors — improving infrastructure, better skills and increased training all spring to mind. But this type of development in action is also one of many examples of how EY’s recently launched Enterprise Growth Services (EGS) is helping to accelerate progress across emerging markets.
EGS is a nonprofit EY program that makes our consulting services available to small businesses, social enterprises and NGOs in low- and middle-income countries at heavily subsidized rates. Entirely demand led, our objectives are to create broad social and economic development by supporting business change that can be sustained once our involvement finishes, and to give our people opportunities to use their skills in a different context as part of their EY career.
A continent on the move — but challenges remain
Africa’s recent story has increasingly been one of optimism for the future. Economic growth, diversifying economies, democratization and vast potential are increasingly coursing across all corners of the continent.
EY’s attractiveness survey: 2014 Africa, which combines an analysis of international investment into Africa since 2003 with a 2014 survey of over 500 global business leaders about their views on the potential of the African market, found that, in 2013, Africa’s share of global FDI projects reached 5.7%, its highest level in a decade. The number of new FDI projects in SSA increased by 4.7%, although the total number of new FDI projects declined by 3.1%, due to the political uncertainty in North Africa. However, the average size of FDI projects increased to US$70.1m in 2013, from US$60.1m in 2012.
But it’s not all good news. The long-standing image of Africa as conflict-ridden and poverty-stricken continues to endure in many quarters. Partly this is down to the continent’s sheer size and diversity — while success stories abound, there continue to be failures — and it is clear that more work needs to be done to address key constraints to doing business on the continent. In addition to focusing on priorities such as improving transport and logistics infrastructure, for example, another important task is to help small businesses to grow and prosper, particularly in the early stages of their existence. This is where EGS can help.
Small steps
Small businesses in Africa lead to new products, new markets and new forms of business organization, thereby making them particularly important, as they help promote growth and employment. EGS involves the deployment of individuals or teams from European or emerging market offices to work hands-on for up to six months, depending on the nature of the project. They offer practical, powerful support for promising entrepreneurial businesses.
Not only do we not make any profit from our work and absorb the program’s overhead costs, but our European staff takes substantial salary cuts. Charging fees sufficient only to cover their remaining salary costs, plus minimized travel and accommodation expenses, we work with impact investors, NGOs and multinational corporations that we believe share our philosophy and can help us find opportunities to create significant and sustained social value. This not-for-profit but not-for-loss model makes it an extension of our core business, rather than a traditional corporate responsibility initiative.
And, in addition, EGS offers our people a real opportunity to contribute to the community, as well as giving them a chance to understand how the entrepreneurial nature of most economies is rooted in the small business sector. We plan to grow this program to a point where we are putting hundreds of our people through it every year, which would, in turn, help hundreds of small businesses and social enterprises across the developing world. Such an ambition is rooted in our understanding that small businesses are the engine of any growing economy — and, through EGS, we are proud to play our part in helping them take their first steps forward into a more developed world.
This feature was first published in the June edition of EY's Dynamics magazine
