Successful entrepreneurs in developing countries have much in common with Olympic athletes.
Olympic athletes embody the attributes of determination, resilience and a quest for excellence. They dedicate long-hours to refining and perfecting their technique; they overcome obstacles and stiff competition in order to realize their goals; and they often inspire others through their passion and perseverance.
Anyone who has worked with a passionate entrepreneur in a developing country, an entrepreneur thriving to make an impact locally, can attest that their reality is in many ways similar to that of an Olympian. Entrepreneurs invest blood, sweat, and tears in refining their products and business models to meet the demands of the competitive marketplace. In developing countries in particular, they face stiff obstacles — weak business-enabling environments, low operating margins, poor infrastructure, and a lack of financing — which they must overcome in order to succeed. And in spite of these challenges, entrepreneurs overcome these obstacles through their own willpower, ingenuity and passion.
However, any Olympic athlete will tell you that they didn’t achieve their dreams on their own.
They will thank their parents and coaches for their mentorship and support. And they will have often benefited from the sporting “infrastructure” that many countries have built up to support their athletes. This infrastructure often includes training programs and preparatory leagues that cultivate athletes from an early age, training facilities, financial support and research that enables athletes to better understand and implement the most effective techniques to swim faster, jump higher and throw farther.
Like top athletes, entrepreneurs in developing countries also need this network of supporting individuals, institutions and resources — what many are now calling an entrepreneurial “ecosystem” — in order to achieve success. This ecosystem is composed of policies that impact the ability of businesses to start and grow; institutions such as incubators, accelerators, and business service providers that help budding entrepreneurs convert their ideas into robust business models; the local pool of human capital with the work in a fast-growing enterprise; and a range of financing options for enterprises to access the capital they need to grow.
Organizations that support entrepreneurship in developing countries, including the U.S. Agency for International Development, are coming to the realization that in order to achieve our goal of spurring entrepreneurship as a means to drive economic growth and broad-based development impact, we too need to look not only at the individual entrepreneur or the social enterprise, but at the entire ecosystem that surrounds the enterprise.
It is in this spirit that USAID is launching a new initiative, Partnering to Accelerate Entrepreneurship. PACE is focused on building partnerships with other organizations — impact investors and donors, incubators and accelerators, angel investors and venture capitalists — that are committed to supporting entrepreneurs in developing countries to grow and generate economic and societal impact. Through PACE, USAID is seeking to address a few key challenges that we’ve seen across multiple geographies and sectors:
Our “bench” is not deep enough. In the past decade, we have seen the emergence of a class of impact enterprises that deliver development impact via financially sustainable business models. However, only small number of these enterprises — call them the Michael Phelps or David Rudisha of entrepreneurship — have reached scale and attracted significant private capital. To realize the full potential of entrepreneurs to contribute to growth and poverty alleviation, we need to address this “pioneer gap” and see thousands — not just dozens — of enterprises across the developing world reach the next level of revenue generation and profitable growth at scale.
We need to make our system for identifying and investing in early-stage talent more robust. We have a long line of impact investors and donors lining up to support “gold medal” caliber enterprises with technical help, awards, and investment. However, there is insufficient attention being paid to the less glamorous work of building the pipeline of early-stage talent. Building this pipeline is hard work, and can be time-consuming and expensive. But as in the Olympic analogy, countries that invest in their sporting infrastructure, their youth sports networks and minor leagues, tend to see the payoff down the road. Organizations that wish to spur entrepreneurship in the developing world need to be taking a longer term view to building up entire “sports,” and not just cherry picking a few good athletes. That translates to focusing not only on building up individual enterprises, but on developing entire sectors, entire value chains and entire markets.
We must improve on coordination and collaboration between organizations seeking to support entrepreneurs. Olympic athletes often benefit both from government programs as well as corporate sponsors and other private actors. Research from Monitor Deloitte and the Omidyar Network suggests that cultivating entrepreneurs and enabling them to reach scale will also require a mix of support from across the public and private sectors — that is, from philanthropic donors as well as impact investors and commercial investors. Smart and targeted use of philanthropic capital to support early stage investment in both individual enterprises and entire market sectors can help “prime the pump,” in Omidyar’s parlance, to crowd in and catalyze the private investment that can take successful entrepreneurs to scale.
In launching PACE, USAID is issuing a call for ideas, in the form of alliance proposals, on how to collaborate to address these challenges — to test models for incubating early stage enterprises cost-effectively to enable them to tap private investment; how to deploy blended financing in ways which meet the unique needs of entrepreneurs that are still testing and refining their business models; and how to promote collaboration between actors to address gaps in entrepreneurial ecosystems.
We invite you to partner with us to help inspiring entrepreneurs in the developing world grow faster, aim higher and emerge stronger from the ecosystems that support them.
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