Access to Markets: The Elephant in the African Entrepreneurial Room

Access to markets is one of the biggest challenges for SMEs, and a critical piece of meeting the goals of SDG8 for sustainable economic growth.

(From our article titled “Access to Markets: the elephant in the entrepreneurial room“, as published by the Skoll Foundation)

The abbreviation for “Access to Markets” (ATM) makes for a great parallel to the actual challenge for most small and medium sized enterprises (SMEs)—without clients there’s no cash to run the business. Clients—somewhat rudely put—are the ATMs of SMEs. To keep the cash flowing, you need to capture the client’s attention.

Access to markets is one of the biggest challenges for SMEs, and a critical piece of meeting the goals of SDG8 for sustainable economic growth. They often don’t have the resources or access to networks to gain commercial traction. Good sales staff are expensive and take time to deliver on their targets, and big agencies manipulate social media strategies to favor those with the most capital.

As challenging as this is for SMEs, consider those responsible for developing an SME support ecosystem with the needs of incubation and acceleration, funding and financing, collaboration initiatives and development programs, intrapreneurship and coaching. Each are crucial elements for an entrepreneur, but they all serve for naught if at the end of the ecosystem tunnel there aren’t enough clients.

The best tools for an SME support ecosystem to address the access to markets challenge are trade fairs and networking events where entrepreneurs can showcase their solutions to a hopefully-interested passerby. But these one-off events need to attract enough client awareness to generate cash flow for an entire business year. Furthermore, not every potential client is even aware of these events, and for others they remain out of reach.

These are the problems we aim to fix. We looked at the SME support ecosystem—access to markets specifically—around the world and came to a relatively simple realization. There’s always someone out there interested in an SME’s solutions, services, and products, but finding them is a challenge. We’ve seen this again and again.

The main issue with the access to market challenge for SMEs is an access to network challenge. Established businesses have network access while the new and geographically marginalized SMEs struggle with access. Established enterprises can afford offices in economically active clusters, and often are able to access closed networks clustered around trust circles—think golf clubs, C-suite events, and CEO forums.

Digital tools promise online visibility, but too often result in a static digital presence, often not reflecting current projects and activities. Our work is to connect local ecosystems, and to democratize access to markets in the digital age. To do our work properly we rely on the amazing work of thousands of local organizations that are building local SME support ecosystems, and we’ve seen an incredible array of SME support ecosystems. The summary of our observations? The questions are easy to identify, but the right answers are fiendishly complex.

There’s no such a thing as the perfect ecosystem, and many are hopelessly out of date. Most ecosystems are designed to mold a specific type of entrepreneur to fit a specific mandate often set by large corporates to get the SME to the point where they are ready to supply them. The perfect ecosystem is simply too open, flexible, and too prone to abuse.

The perfect ecosystem is really a platform to democratize the field of opportunities and resources. That platform should be both local to support local entrepreneurs but also interconnected so that entrepreneurs in disparate communities can access distributed opportunities and projects.

We support SMEs across some 83 countries and have seen numerous approaches, some effective and some less so. Our realization about what works wasn’t that localized SME support platforms and ecosystems are bad, but that they are limited if they remain exclusively localized.

An effective SME support ecosystem must be wired to connect to other SME support ecosystems. That connectivity is crucial in creating a democratic approach to access to markets. The network effect is particularly important to reduce the dependency that localized support structures often create in SMEs.

Those initiatives we mentioned at the beginning—from funding to coaching—are crucial, but without addressing access to markets, we won’t back those businesses that address the greatest need in the market.

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