Q&A: Boosting options for entrepreneurship in Southeast Asia

A new partnership announced in April will see the Aspen Network of Development Entrepreneurs, Department of Foreign Affairs and Trade and Rockefeller Foundation join forces to boost entrepreneurship in Southeast Asia.

Small and growing businesses in developing communities, which have between five and 250 employees and are ready to scale, are the focus of the program that will connect businesses to regional and global markets. The program aims to build communities that are stronger, socially and economically, and thus help them gain better access to essential services, such as education and housing, and more reliable and affordable energy sources.

Close to $500,000 has been committed as part of the new partnership, with $345,000 coming from Australia over three years. Australia’s contribution includes membership in ANDE, and provides for the expansion of its Southeast Asia operations based in Bangkok to include additional activities and full-time staff.

For DFAT, this is another important step in their primary focus of supporting growth of the private sector in the Indo-Pacific region. Their ongoing strategy is to incorporate a broad range of new and existing partners to respond to the complex development challenges within the region. The partnership with ANDE provides a platform to identify and work with like-minded investors that have an interest in supporting small and medium enterprises to achieve development outcomes in the region. Both of these will help DFAT to achieve its private sector and development engagement objectives.

For the Rockefeller Foundation, it is an opportunity to expand and support existing entrepreneur programs in the region.

Following the launch of the expanded program, Devex spoke with Jenny Everett, managing director of ANDE, about the impact and directions of the program. The conversation has been edited for length and clarity.

What does the new investment from DFAT and the Rockefeller Foundation help ANDE to achieve?

This allows us to get “boots on the ground” in East and Southeast Asia, and really work to bring people and organizations interested in entrepreneurship together around more concrete events, projects and objectives to support local small and growing businesses.

With a dedicated, local staff person physically based in Thailand, we will be able to more quickly scale programming, research and industry collaboration that will help entrepreneurs and small businesses achieve their full potential, to boost economic prosperity and reduce economic inequality in the region.

As part of getting “boots on the ground” in East and Southeast Asia, are there new programs that will be established specifically for this region’s needs?

In addition to core programming that facilitates knowledge sharing and collaboration, we’re looking to conduct ecosystem snapshots of several countries in the region, to expand our research on accelerators, and to host one of our Investment Manager Training programs in the region.

Ecosystem snapshots are designed to help actors gain a sense of who is actively supporting entrepreneurs in a particular country, region or city, and how they’re doing so. Rather than going in blind, these snapshots provide a greater understanding of where the gaps and opportunities are when it comes to effectively supporting entrepreneurs, and can help actors make more informed decisions about where to provide financing or other types of support.

Our accelerator research — the Global Accelerator Learning Initiative — is diving into whether enterprise accelerators actually work, and if so, how. The investment in ANDE’s East and Southeast Asia chapter means that this chapter will be able to support the research by recruiting new local partners, and sharing the findings of the research for comparison and learning opportunities.

With DFAT and the Rockefeller Foundation coming on board and investing in ANDE, have they specified any development priorities to focus on?

ANDE, DFAT, and The Rockefeller Foundation are aligned in bringing this region’s focus to sustainable agriculture and agribusiness. Other potential areas of focus would include health — such as addressing an ageing population and an excluded, or marginalized, population. Focus areas also include housing, off-grid energy and inclusive economies.

How do you get businesses involved in the scheme?

ANDE members are usually organizations that provide direct support to small and growing businesses. This includes investors, NGOs, corporations, foundations, capacity development providers and development finance institutions. So the businesses that get involved do so indirectly through the ANDE member.

New ANDE members often find us through referrals from current members, through events that we host or through events that we participate in. If organizations are interested, they can fill out a membership survey, and then speak with ANDE’s membership team to learn more and decide whether to pursue membership or not.

How do you monitor impact and communicate this back to countries of operations, donors and members?

We track the impact of this sector in several ways. One way is through member surveys that help inform our understanding of our own impact, and that help inform our annual State of the Sector report.

We’ve been tracking data on the small and growing business sector since 2009, to assess its growth and impact on emerging market economies. Since we started tracking the data, we’ve seen an increase in deals under $2,000,000, reaching 25 percent of the total emerging market deal volume in 2015 — a promising sign for the availability of capital for small and growing businesses.

Impact investing is also gaining momentum, which could create more opportunities for these businesses to grow. However, it needs to happen in a way that works in tandem with strengthening the entrepreneurial ecosystem in order for individual deals and transactions to have the impact they aim to achieve.

While it’s too early to tell if this is having a direct effect on poverty reduction, these are all promising signs.

What have you seen to be the benefits of entrepreneurship programs in developing countries?

Entrepreneurs with the ambition to scale their business create impact that goes beyond themselves and their immediate family members. They create jobs for the local economy, make connections to regional and global markets, and increase access for underserved communities to goods and services, such as housing, health care and other basic human rights. These small and growing businesses can even the playing field to create more equitable, inclusive economies.

We’ve seen this through countless ANDE members, who, by investing in and training entrepreneurs, and improving the environment that entrepreneurs operate in, have helped scale businesses to create hundreds of jobs. These lead to more stable sources of income that allow men and women to send their children to better schools, to buy or grow more nutritious food for their families and so much more.

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