Supporting business that creates wealth and growth should be our main priority

I see that in the USA there is a similar debate as here in South Africa about whether government should support small firms or growing firms.
Andrew Hargadon wrote a brilliant post on the debate that was brought to my attention by Tim Kastelle. Hargadon argues that hindsight is often mistaken for foresight. He explains that many small firms stay small for many years before they grow, and that it is hard to predict which will grow, which will just survive and which would fail. From my own business and consulting experience I support his view and have seen on many occasions that it sometimes takes a change of ownership or management to get a small enterprise onto a growth path. But sometimes we are so obsessed with the romantic idea of an entrepreneur fighting an honorable fight against market forces and the onerous framework conditions that we miss the bigger picture. Some people are good at starting enterprises, others are good at growing enterprises, other good at maintaining an enterprises. Some will just never be able to do it no matter how much support you provide (or waste). Most people will make better employees than entrepreneurs.

The myth that small enterprises drives growth and employment is an old one, one that is firmly in the rooted in minds of policy makers and development practitioners here in RSA and in our region. There seems to be a confusion between correlation and causation. Even if statistics shows that 60% of people in RSA are employed in small enterprises (thus a correlation seem to exist between small firms and employment) it does not tell us anything about causation (does small firms create employment, or does more employment lead to more small firms being created). Research by many reputable scholars have shown that small enterprises hardly drives growth, but that it often responds to growth; it is more likely that larger better resourced companies will drive growth and efficiency in the economy, with ecosystems of small firms emerging around them providing specialized and also some general services.

For instance, the reputable scholar Thorsten Beck argues that the dynamism of enterprises is more important than the size of small firms in the total economy. I first came across Becks work while doing my PhD research (he has since moved from the Worlbank to Tilburg University). Beck has done many cross-country micro economic studies and argues that:“Policy efforts targeted at SMEs have often been justified with arguments that

(1) SMEs are an engine of innovation and growth and

(2) they help reduce poverty because they are labor-intensive and thus stimulate job growth, but

(3) they are constrained by institutional and market failures.

Cross-country, country-level, and microeconomic studies, however, do not support these claims. One study shows that, although faster-growing economies have a higher share of SME employment in their manufacturing sectors, it is not the size of this segment that drives growth“.

The full report can be found here

Here in South Africa development practitioners have the challenge that we have to pursue objectives that are in conflict.
Everyone seems to agree that we should create more employment, as the waste of human capital in our country is just socially not sustainable nor justifiable. Yet, we are constrained in that we cannot always support those firms that are more likely to create employment because of the race of the owners, or for other demographic criteria or preconditions. Sadly, many entrepreneurs that can help us absorb the unemployed have left, or have shifted into industries where they don’t have to rely so much on low skilled workers. Many have simply taken up jobs in the corporate or service sectors (people like me and many others I know). The current legislative environment just does not make it easy or attractive enough for people to start new firms or expand existing ones. In fact, many people that have the capacity to start medium sized firms are investing their money elsewhere. Now don’t get me wrong, I am not against the principle of equity enshrined in our constitution, I strongly support this. I also believe that labor should be paid fairly in a just relationship. The current labour and BEE environment just does not make for an environment where people will start firms or spin-offs that will address our primary problem of unemployment.

I believe that having a job goes a long way to equipping (black or white, male or female, young or not-so-young) employees to start a business at some point when they have gained sufficient technical AND market experience. Employment experienced and education will still do much more for sustainable black economic empowerment than any other measure. Furthermore, a focus on employment (no matter what the profile of the employer is) will also increase our tax base so that we can do more to develop our country. I will not get into my feelings about too few taxpayers supporting a too big social spend and government here.

Whether big or small, I put my money behind family owned businesses (Yes, I have a small bias). They somehow have the ability to consider both short term but also long term priorities at the same time. Even if they don’t make decisions fast, or if they sometimes appear to be conservative, I found family owned businesses are more likely to continuously invest in better equipment, in developing capacity, and in securing new markets. Family owned businesses makes for more stable employment, and generally they are more aware of the social needs of their employees. But these are also the kind of firms that are least likely to give up shares and management positions if it does not make long term business sense, thus Black Economic Empowerment policies and many conditional support incentives actually undermines this (often unrecognized) backbone of our economy.

What most people choose to ignore is that 3 drivers of costs of business are escalating very rapidly. These are:

  1. cost of raw materials. We buy smaller volumes and pay more compared to other international markets, with many countries even subsidizing access to raw materials.
  2. cost of energy. Our energy cost has increased faster than firms could upgrade, so we are far from efficient and thus at disadvantage. Municipalities further charge double and triple digit margins on top of the official electricity rates. Lastly, those that want to expand often cannot secure or afford access to electricity due to more than a decade of underinvestment in the grid at municipal level
  3. cost of labour. Many other factors are making wages too low for workers to live on (like the cost of transport), while raising the cost component of labour in business without increasing productivity resulting in South African enterprises being uncompetitive. Most employers when they do agree to wage increases simply reduce their staff, because other types of productivity improvement simply takes too long to yield results.

There is only one way that I know of to overcome these 3 cost drivers, and that is innovation at all levels of the enterprise (product, process and business model innovation). We also need social innovation, especially with regards to finding better ways at training, re-training or current workforce and the unemployed.

I can see in many sectors that those entrepreneurs that can create businesses that mainly employes skilled or educated employees are able to compete domestically and internationally. Those enterprises that depend on low skilled workers will simply struggle to compete, their costs are just to high and more and more of them are failing. Larger firms with access to capital and debt are more likely to be able to balance the investments in capital and labour that is required to be profitable in our economy, while smaller firms are struggling to balance this while raising capital and exploring new markets at the same time. The transaction costs for smaller firms to experiment until the find a workable business model in many instances is just to high. This is visible in the popularity of franchises where an entrepreneur buys into a proven business model and where the costs of experimenting with the business model is shared by many franchisees. (I wish we had something similar in manufacturing).

From my research over the last 3 years into innovation in industries I can say with confidence that our smaller manufacturers are hardly investing in Research and Development, mainly because they are under such strong cost and competitive pressure. Those smaller firms that do innovate formally often do this on contract, meaning they are paid by larger firms to do so. Larger firms that are active internationally are more likely to pay for R & D in order to drive down costs while creating new markets and new products. In doing so they support a wide range of smaller firms that provide experts services, specialized components or other intermediary inputs needed by the larger firms.

In the end, we have to direct our funds to those that can create employment, create wealth, create new markets and create new kinds of jobs. We should assess which firms we support by looking at the multiplier effects and the spillovers. We should support those firms that optimally and responsibly use existing resources, whether it be financial, natural or human resources. We must try to support the areas where dynamism already exist to start with, and then we have to try and support dynamism elsewhere. But we should not assume that our large and established smaller enterprises are able to develop all by themselves. The current focus is too much on small and not enough on multipliers and dynamism in the whole economy.

For me all other priorities come second to the objectives of growth and wealth creation, as we cannot achieve all of our countries many priorities at the same time. Growth will absorb more people, will attract more investment, will create new markets, new skills and new opportunities. Wealth creation is as important for employees as it is for investors, entrepreneurs, managers and also the government.

We have to send a strong message to ALL entrepreneurs that we value their investment, their energy and their attempts to create new markets. But we cannot help all of them, and by assisting some of them based on social criteria will not take us toward our countries biggest crises, the unemployed youth, nor will it allow us to optimally leverage the wisdom and experience of our older generation of technicians, engineers, managers and academics no matter what their demographic profile.

Supporting business that creates wealth and responsible growth should be our main priority.

Localisation and building domestic manufacturing capacity

At the moment I am spending most of my time working with the more traditional manufacturing sector in South Africa. Traditional apparently means non-advanced, but it would be a mistake to think that because a particular object (like a metal casting) has been made for 8000 years that there is nothing advanced about it. For instance, in a typical foundry you find very different technical, engineering and management capacities that must be combined in order to make metal components for very demanding customers.

Localisation in South Africa (and in other places like the US) means to bring orders that have gone offshore back into the country. It often involves trying to rebuild manufacturing capacity that once existed in a country, but that originally developed under completely different economic conditions. For instance, 30 years ago many manufacturers grew in South Africa, starting very small and growing over time. About 10 years ago these manufacturers closed, or moved offshore. In the meantime global market consolidated and found low cost producers. To now try and create this capacity again is not an easy task. Firstly, you don’t have 20 years for experimentation in technologies, business models and market segments. Secondly, customers already now know what they want, and this usually includes a proven product at a competitive price. The new enterprise must hit the ground running with proven technology, management and adequate resources. This means that you have to develop both local producers and their supporting institutions, service providers and their markets at the same time. Bear in mind that their competitors overseas are benefiting from this same ecosystem developing naturally.

Localization is seen by some as the opposite of globalization and outsourcing. But buying from a local manufacturer is still outsourcing . As far as localization as the antidote to globalization is concerned, this is not correct, as localized products often enter world markets again, as does local knowledge workers that are now mobile due to their enhanced expertise. Localization is about creating local manufacturing capacity. It is about more than just helping local entrepreneurs start firms – it is often about finding or developing unique local capacity that meets very specific local requirements. It is therefore often driven by public policy- however the most successful localization is often driven by businesses wanting certain suppliers or competencies nearby.

Perhaps another way of looking at localization could be to see it as part of a natural cycle. Products are made locally at $x and a small volume supported by a limited local market. Over time standards, low cost production methods evolve, market consolidate and production concentrates in a few places able to reach scale and efficiency. Now the numbers are high – new entrants struggle to enter as existing firms ramp up efficiency. Right about then flexibility is lost, management becomes expensive, and you may be sharing production facilities with current and future competitors. In the meantime, products evolve, markets and applications differentiate, and suddenly there is a need for more specific production to meet a specific market. this is where a local producer with the right technology, people and business model could gain a foothold (if only they knew about the opportunity). The cycle might just start all over again. This is just one simple example. I acknowledge that many countries have not been able to recapture orders once they are lost to offshore competitors – partly because several economies have also progressed up the value chain. But for developing countries, evolving up a value chain is a very painful process that is often not possible.

From the demand side we have a different perspective. Multinationals or large local manufacturers wanting to localize typically have an existing production system, or they are expanding local capacity. They have advanced or well developed management systems, markets, products and supply chains. Often, buying local is not first choice as they might have invested already in capacity elsewhere, although localization is frequently a requirement of developing country procurement policies. So they first localize non-core activities, the crumbs or components where few things can go wrong. For local manufacturers, this is the toughest place to enter, as these basic components are often like commodities – they are standard, and hence competitors have already reached scale and efficiency levels that are hard to beat.

For buyers, another problem is that local manufacturing capacity is hard to identify and secure. Existing manufacturers in developing countries are either undergoing BOOM or BUST. The boomers are just to busy in markets and products they already understand, and the busters just cant be trusted. Lastly, large multinationals that tries to localize production very often draw their domestic engineering, management and other skills directly from the very limited skills pool that exists locally, attracting skills from the local manufacturing sector that is hard to replace.

So some insights:

a) firstly, don’t let your local manufacturing sector collapse, even if they are not entirely local or entirely politically correct

b) don’t assume that multinationals can easily do business with local manufacturers, don’t depend on checklists.

c) don’t assume that all that your local manufacturers need are some orders from the big firms or government – they are most likely behind in multiple areas, such as skills, working capital, engineering technology and capacity

d) it is not just about technology. Large firms giving technology to local firms is not the solution. Local firms must get a deeper understanding into the market, the drivers of change, the drivers of performance and manufacturing management methods.

e) for a local manufacturer to grow, take on new (demanding) customers, add additional shifts, manage a busier schedule, recruit and train more staff – all these things require change. Remember to assess the readiness of local entrepreneurs to change, invest and expand.

 

Lastly, localization should not be  about import substitution at all cost, because this reduces the buy local decision to a costing issue. Isolating local manufacturers from international markets will not help in the long run. Rather, the focus must be to connect local manufacturers with global markets, knowledge pools, trends and developments.

If you really want to develop your local manufacturing sector, start with the buyers and understand their needs. Understand their business risks, their cost drivers, their incentives to expand and their means to support local manufacturing. Then find out which experts they bring into their operations, what challenges they had to create and maintain their own systems – chances are that what is an inconvenience to a large firm could be a complete obstacle to a local firm. Then articulate these messages, trends and projects clearly to local producers.

I have found that the main issue for large firms wanting to localize is not price – it is reliability and flexibility of local supply. It is dedication to getting the product right at the right quality, on time. And it is also a supply chain of local engineering and management skills.

Oh, did I mention that small firms also want to localize, not just the big firms? More about that next time.

 

 

My activities in the last months

So what have I been up to in the last few months?

At the moment I am working with several industry organizations and development institutions in South Africa on topics that are all interrelated around the topic of upgrading of our manufacturing sector. This involves working both on the softer issues such as facilitation of processes, building trust, identifying patterns, mobilizing stakeholders and lobbying for change to both government and the private sector. Another dimension of this work is to assist meso level organizations created to stimulate upgrading and competitiveness of industries to design better and more relevant programmes, developed organizational plans, and diagnosing industries to find systemic intervention points. I am involved in several cluster development programmes, and I am also working quite a bit with universities to better respond to the (often unarticulated) needs of industries. Lastly, I am assisting several large international and national buyers to develop their South African supply chains. This work is partly fueled by the public sectors increased emphasis on localisation.

For me all of this can be summarized under the heading of upgrading innovation systems, and building new industrial competencies. Sometimes I describe it as modernizing industries, or to stimulate technological upgrading of industries and regions. My customers do not often use these words.I thought it would be interesting to perhaps share with you how some of my current customers describe the work I am doing. I will not share their details due to the sensitivity of the work I am sometimes involved in.

The universities I work with describe my work as :

  • stimulating industry- academia relations around upgrading and regional innovation,
  • facilitating the improvement of technology transfer,
  • developing industry partnerships, research strategies and applied research programmes. This involves improving innovation within the academia
  • improving innovation systems that the university forms part of by designing appropriate support programmes

The industry development organizations I work with describe my work as:

  • facilitating the improved competitiveness of industries,
  • facilitating change processes in industry in order to unlock new markets and improve competitiveness,
  • developing public sector programmes that are responsive to the needs of industries.
  • High level policy advocacy and industry partnerships

For the government officials that I work with my work is:

  • developing industry – government partnerships,
  • supporting the development of local industries,
  • brokering partnerships,
  • shaping policy based on industry insight and
  • developing practical development programmes.

Why do I share this with you? The insight for me is that I am using a limited number of tools (mainly facilitation skills, some insight into manufacturing and technology transfer, insights into innovation systems, organizational development and a fearless approach to engaging with industry leaders) to work with a largely overlapping set of stakeholders.

Although I think that I am basically doing the same kind of work, my customers describes my work in completely different ways, even if ALL my current customers have the same objectives (they all want to improve manufacturing competitiveness and grow the local industries).

This work is all based on process consulting and I am very happy that I have a complementary set of customers that are all eager to work together to achieve our common goals. The work is very intensive and I am also grateful that I have contracts that have sufficient time and sufficient flexibility in so that my work can be supportive and responsive to the people I work with.

 

Note 1: Right at the moment I hardly work for any donors agencies in South Africa, mainly because private sector development and especially innovation system promotion in South Africa is not very high on their agendas. I do however assist with capacity building, coaching and programme design work occasionally.

Note 2: One important contract is with GFA on behalf of GIZ where I am supporting several technology stations at universities to improve their technological services to the industries they work with. This work is included in the descriptions above about the work I do for universities.

Note 3: The work I am currently doing is all possible due to the experience I have gained by working for organizations such as the GIZ (then GTZ) on issues such as innovation systems, university industry relations and local/regional economic development.

Making excuses

Thank you for those that asked me why I have not posted in such a while. Other than procrastination I do have two excuses, one positive and one negative. One excuse is that I have been too emotional to write because of the terrible violence in our South African mining sector. The massacre at Marikana was not the start, nor was it the end. I have been to afraid to say anything about this issue on my blogsite so I will keep my mouth shut on this tragic and complex issue.

The other reason is that I’ve had a great response on my previous e-mail that even resulted in me having to speak at some events about there being more to value chains than just diagnosing a value chain. Thank you Paul for drawing me into your organisation to address your team about diagnosing value chains in complex environments. Thank you also to Tim, Marcus, Bart, Frank for your comments and stimulating correspondance.

I am still here. Still working on my beloved manufacturing sector. Still committed to sharing….

There is more value to the value chain than adding value to products

I am supporting value chain practitioners in various programmes where I am coaching, teaching, supporting, pushing and pulling experts. This is one of the perks of my job as I get to look over the shoulders of practitioners working all around the world on commodity, agricultural, manufacturing and service value chains.

While marking some assignments for a course I am tutoring for the ILO I realized that many practitioners are trapped in a particular chain, just like the actors that they are trying to empower. With trapped, I mean that they are working with the actors and the chain for the benefit of the chain. They completely miss the broader impact of their work. (I know that this is often more the fault of the people who design programmes, more about this elsewhere in my blogs).

Let me explain.

For me a value chain is something we construct so that we can understand a part of a sub-system. If you are diagnosing a tomato value chain then it is true that you are getting a deeper understanding of the tomato system. But you are also gaining an insight into an agricultural system, a regional system of stakeholders and communities, but also an insight into the national or maybe even global economy. While some value chains exists in a very formal way, with contracts linking the different actors, most value chains can rather be described as temporary social phenomena. Temporary because they tend to change over time.

Back to my main argument. While it is true that value chains are known by their end products or markets, there is more to a value chain than just the conversion stages of a product/service. Value chains show us how an economic system works. It show us how responsive institutions and supporting organizations and indeed a whole society is towards economic activities of a certain kind. Value chains also tell us some fluffy yet important things about the society it is framed by. It tell us something about the social relations, the search costs (finding people to do business with), the social capital (how well we trust each other, how easily we collaborate), the enabling environment, and the returns on investment and effort in different parts of the system.

So if we find that tomato farmers are not very sophisticated, that they have poor market relations, that entry barriers are very low hence nobody has an incentive to invest, that suppliers are dishonest, that there are some new market niches developing but that nobody knows, that intermediaries have disproportionate power; I am not surprised at all. In fact, your findings are rather typical, even predictable in some sectors. What I am surprised by is if you treat this like it is a unique finding contained only to the tomato farming sector. The chance that these characteristics are contained only to those involved in the tomato chain is rather slim. This is the real risk of having a too narrow product focus.

Yes. Value chains are known by their end markets or products. But no, we are not locked into a product. We want to understand the system better so that we can support the emergence of institutions, market systems and interventions that make the whole system work better. Those issues that I outlined before in my tomato example can be verified in the sectors or crops around it. In my experience, many crops or business sectors sometimes have similar challenges. Therefore instead of trying to work at a low scale with some tomato farmers, you could possible be working with 10 crop types in a region, involving 1000s of farmers, and maybe a dozen supporting institutions. Few extension services for instance focus on one crop, they often handle a variety of crops, animals and markets. So you have to try and understand what each kind of economy activity (like farming with tomatoes) have in common with other business types or farms, and then what is unique. When you do this you often find that the actors in the chain have far more in common than the product or crop. They could all be equally unskilled, equally under-capitalised, equally vulnerable to market fluctuations, equally exposed to poor contract enforcement, or monopolies. This is how we get to real systemic interventions.

But the idea should never be to promote some products. This is the job of business people and entrepreneurs, not development practitioners. No, development practitioners should try to understand and strengthen the system. We make the features of the system that is overlooked or not visible to stakeholders more apparent. I also dislike it when practitioners start with an hypothesis that profit is unfairly distributed, or many of the other typical biases that exists in this field. The simple truth is that investments in economies flows to where there are (visible) returns. If it becomes more profitable to invest in retail than in manufacturing or farming, then this tells us something about the system. It is an important finding in itself which then allows us to ask the next question “how to make farming more profitable for investors (farmers and the poor are also investors)?”.

Your value chain has more value in it than the value added at each stage of the chain. What is valuable is the insight you are gaining about how a part of the economy works. Don’t become a product promoter. Be a system builder.

Feel good Friday – supporting a viral add

Hey, its Friday. My favorite day to catch up on publications, e-mails and the occasional meeting with a business person that inspires me.

Coca Cola just released a new commercial that makes you feel good. This add has gone viral, so I am probably fueling the fire. Please note, I don’t receive any money for this promo. Although donations are always welcome!

Why do I post a link to a sugar drink? Well, because in my day-to-day visits to businesses, I realize that in South Africa the business people are starved of good news. This is not the fault of the media, they report on the mood. The constant stream of bad news is caused by poor leadership, both in business and government. Actually, the business mood here is much worse than some of the other countries where I work, despite the general framework conditions here being much better. The reality is that the current absence of value or principle based leadership is sucking the batteries of business dry. This then affects their investment outlook, their innovation priorities, even their willingness to appoint more staff. Poor leadership that is visible sends the wrong signal, it creates an atmosphere were people hold back, they wait and see. Good leadership that is visible and clear inspires action, it inspires taking risk, exploring new opportunities for growth. It creates incentives to go out and do something, like create new markets, new models.

Why do I bother with this message? Am I not just making matters worse?

Listen, out there. Business needs some good news. There are so many good things happening in this country. So many breakthroughs in the social, business and government sectors. We have businesses inventing new things, entrepreneurs creating new markets, we have hidden global champions (like Naspers) and we have some excellent public officials serving here and internationally. But we don’t celebrate enough. Even when we beat the English in rugby we celebrate quickly and then switch to complaining about something else.

So here is the add. Watch it and feel good. Then go and invest in creating something new.

[youtube=http://www.youtube.com/watch?feature=player_embedded&v=auNSrt-QOhw]

According to Coca Cola, the add insists that people look at the world a little differently. The clip offers some funny, some silly, some moving and inspiring clips from CCTVs around the world. The new ad is made up of all the “sweet, everyday moments” that people miss, and not the usual footage one would associate with security camera footage like burglaries, fights and accidents. The soundtrack to the add is the 1977 hit Give a Little Bit by Supertramp.

Come on Nandos, give us some good news about South Africa. Seems government and business is generally too busy complaining to inspire us!

Event Announcement: Diagnosing and strengthening local and regional innovation systems

On the 28th of August I will present a practical workshop in South Africa as part of the 5th Innovation Summit. Last year’s summit was one of the highlights of my year and I look forward to contributing to this event.

The workshop I will be presenting will concentrate on how to diagnose an innovation system, and then what to do about improving the innovation system. We will ONLY accept 20 participants, so early bookings are essential. The cost per participant is R3420 all costs included. For more information visit the workshop page here or click on the logo.

During the workshop we will cover the following content:

  • Main theoretical principles of innovation systems
  • distinguishing between national, local and regional and sector innovation systems
  • understanding the difference between innovation within firms, and innovation systems
  • The relationship between the region and innovative performance of industries
  • 4 lines of inquiry to diagnose the factors that affects the performance of a specific innovation system
  • Different analytical instruments that can be applied to understand elements of the innovation system
  • aligning public and private supporting institutions to the innovation needs of an industry
  • facilitating a process of incremental change within an innovation system

If you have already attended my workshop before, then take a look at some of the other great speakers that will be presenting pre-summit workshops before the Innovation Summit:

  • * Claire Janisch will take delegates through Biomimicry which is a totally new and different way to look for innovative solutions based on nature’s problem solving capabilities. Claire is back after feedback on her workshop was outstanding and “we want more”.
    * Dan Buchner from the Centre for Creative Leadership is coming from the US to share his knowledge and insight on innovative leadership skills – leading innovation teams and how to create a culture for innovation to thrive.
    * Prof Deon de Beer will have his very innovative Idea to Product Lab set up and fully functional. You will learn about the basics of design right through to producing your physical prototype during the workshop. If you have an invention waiting to be made into a physical product, this is the workshop for you.
    * Klaus Schnurr from the UK will take delegates through a process where he will teach you how to synthesis transferable best practice methods, tools and techniques and will explain the key steps that companies in Africa can use to explore trends and generate scenarios to identify innovation platforms for future growth.
    * Vasintha Pather’s workshop is ideal for anyone who facilitates thinking, workshops and sessions as a full time job or within an organisation. Using graphic facilitation methods enhances the learning and take aways for everyone

During the main event of the Innovation Summit I will present a paper about the importance of moving from business model to business model innovation.

I will also launch my book titled “The fundamentals of innovation system promotion for development practitioners” during the Innovation Summit.

The MaFI-festo: changing the rules of the international development “game” to unleash the power of markets to end poverty

I am supporting great initiative of the Market Facilitation Initiative. Lucho submitted the online debate we’ve been having since 2008 into the annual Harvard Business Review/McKinsey M-Prize for Management Innovation (called MIX). I am a member of the MaFI discussions.

Lucho provides the following short summary “Bilateral and multilateral donors and NGOs re-write the rules of the International Development Cooperation System to unleash the real potential of markets and the private sector to end poverty at a large scale… easier, faster and cheaper. How? Through trust-based partnerships, complexity science, effective organisational learning, systemic M&E and co-evolutionary experimentation.”

The solution offered by Lucho (based on the MaFI dialogue) is:

A series of national and international conferences, seminars and workshops to bring donors, NGOs and leading firms to identify the rules of the development “game” that need to change to make market development initiatives more inclusive, accountable, responsive, innovative, holistic and cost-effective.
MaFI (The Market Facilitation Initiative) started in 2008 and has more than 240 experts from all over the world working in NGOs, donor agencies, private firms and academic institutions. The aim of MaFI is to advance policies and practices based on facilitation and systems thinking to make markets work better for the poor and the environment. MaFI is a working group of The SEEP Network with the technical support of Practical Action.

After almost two years of of discussions, MaFI members produced a manifesto (The MaFI-festo) which has three main objectives:

  •  To focus the attention of key stakeholders on a set of strategic changes that are urgently needed if the international development system is to effectively harness the full potential of markets to reduce poverty at scale and protect the environment
  • To promote convergence and collaboration between bilateral and multilateral donors, practitioners and academic researchers working in the fields of “aid effectiveness” and inclusive markets.
  • To inspire NGO leaders to promote the adoption of systems thinking and facilitation approaches in their own organizations and networks to increase their ability to interact with the private sector and leverage the full potential of inclusive market development programs.

The MaFI-festo focuses on four areas (in no particular order of importance):

  1. Changing how we work in the field
  2. Balancing flexibility and accountability
  3. Building the capacity of facilitators
  4. Changing what and how we measure change

The MaFI-festo will give content and focus to the series of conferences, seminars and workshops mentioned above. These are called the MaFI-festo Dialogues.

What must you do?

To see the application go to http://www.managementexchange.com/node/62551

Find out more about the M-Prize go to: http://www.managementexchange.com/m-prize/long-term-capitalism-challenge

We need you to:

Comment, vote and throw in your ideas!

With each comment, like, or Tweet our submission goes up in the rankings!

Link: Why dont they want what we know they need by Charles Kenny

Take a look at this post by Charles Kenny at the Centre for Global Development about why people don’t absorb technologies that we know they need!

Lazy linking

Yes, I know its been a while since I have posted. Actually my previous posts have resulted in several invitations to make presentations at different events. Thank you to my readers for making those referrals.

While I get my head around my research work I can recommend the following three articles:

1. An article on the Daily Maverick by Marelise van der Merwe on entrepreneurship, crime, the relationship between the two and a possible solution. I have argued before that many of our criminals are misguided entrepreneurs – seems there is some evidence to support my argument.

2. Jerry Schuitema’s Heroes in the workplace article posted on Moneyweb.co.za is about how business leaders should involve labour more in their companies. He argues that the involvement is essential and possible – and I agree with him!

3. Take a look on the critique by Marcus Jenal on a article that appeared in the Economist. It is called “Simplify and repeat?” Rather Simplify and Evolve.