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Bread, civil society, bank charges, and Competition Authorities: what do these have in common? The surprising answer is that these elements help explain how South Africa’s Competition Authorities have become a standout success in the country’s economic policy making. Nowadays, competition policy forms a central pillar of South Africa’s development strategy, and the South African Competition Authorities command substantial respect and widespread support. A crucial ingredient to this success has been the Competition Authorities’ strategic use of convening power to rally stakeholders, focus public discussion, and deliver tangible results.

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(image: Sean Graham, Flickr Creative Commons)

It has become mainstream to think that digital technologies will have a significant role to play in addressing the financial inclusion challenge in developing countries. This may be so, but if all we in the financial inclusion community do is merely add the mobile phone (or the smart card) to our stock of dearly-held beliefs, we will accomplish little. Technology will not work additively; if technology-based models work it will be because they will have changed pretty much everything. I’m not saying that everything will change: I’m just saying that that should be the bet.

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The surest way to empower women, close the gender gap, and ensure women’s participation in the development of their economy is through enabling equal job opportunities and employment for women.  Recent efforts such as the Women, Business and the Law (WBL) project show that labor laws do vary between men and women. As we will see in three studies below, the law has an incredibly significant role in understanding female employment.

Eliminating gender disparity in laws leads to higher levels of female employment

The first study finds that gender disparity in the laws favoring males over females tends to lower the employment level of females relative to males, a result driven by employment in small and medium firms. The study uses a broad measure of gender discrimination in laws across 66 developing countries using the World Bank Group projects: WBL data and the Enterprise Surveys data to measure female employment in the private sector.

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The post Smart Economy = Laws that are Tailored to Women as much as Men appeared first on InnovationAfrica.

While it’s International Women’s Day tomorrow, many of us at infoDev are trying every day to make women, specifically women innovators, central to our strategy of supporting high-growth entrepreneurs in developing countries. But this is easier said than done as women are notoriously under-represented in tech-related industries and even more so in the area that I work in – clean technology – which is largely manufacturing and therefore male, dominated.

I recently attended one of the largest renewable energy forums in the Caribbean attracting investors, experts and entrepreneurs from around the region. As I looked around the room, I spotted only a handful of women. And this is not an isolated case. I see this scenario play out whenever I meet climate and clean energy entrepreneurs at events like this around the world.It’s no secret that increasing women’s role in the private sector can provide huge upside benefits to GDP and many other co-benefits (for example if the United States increased women’s participation in the workforce by 8% it could boost GDP up to 4%). However designing programs to empower women to be more proactively involved as business leaders, entrepreneurs and innovators is no easy task. It was around International Women’s Day last year that infoDev decided to tackle this gender gap head-on in the design of the Ethiopian Climate Innovation Center (CIC), which is preparing for launch by this summer.

While women in Ethiopia operate 65% of micro-enterprises, their participation in manufacturing is only 26% and land ownership is even less at 19%. Moreover, given household responsibilities, credit availability and other constraints, women are unable or unwilling to scale their businesses beyond a micro-enterprise level. Faced with these challenges, we contacted 16 women business leaders from various corners of the country to provide us with ideas we could incorporate into our program design process. This focus group included women-led cleantech companies such as Ecopia, an organic food and cosmetics producer; Sole Rebels, a manufacturer of recycled shoes; and Amsal Energy, maker of energy-efficient cook stoves. It also involved organizations including the Amhara Region Women Entrepreneurs Association, working with over 2000 women-owned businesses in their network.

Luckily there was no shortage of energetic Ethiopian women in the group who had strong views on how the CIC should operate its women-led innovation strategy. Their advice included these seven tips:

1.    Women-specific programs should be smartly designed and equal. Targeted programs to identify women entrepreneurs shouldn’t crowd out promising ideas and companies led by men.
2.    Focus on the men behind the women. A successful program of the Women Entrepreneurs Association includes a training program for men to help them excel in household duties while their higher-earning spouses work. Influencing spouses is essential to changing attitudes towards working women.
3.    Create role models. Women entrepreneurs are very effective at inspiring other women to start their own businesses.
4.    Outreach is critical. Training, education and awareness rated higher than access to capital as the top needs of women entrepreneurs, especially in tech sectors.
5.    It’s not only about women. There are some programs where men may be underrepresented and will need support to raise their participation levels.
6.    Target women along the value chain. This means including women designers, producers, distributors and consumers in the innovation process, not just women business-owners.
7.    Mainstream gender through M&E. Only through actively measuring women’s involvement across all activities and reviewing success regularly can programs like the CIC make gender central to its strategy.

From one million Birr proof-of-concept challenges to establishing a women mentor network, the CIC will experiment with a number of these approaches to boost women’s involvement in cleantech in Ethiopia. I only hope that when I attend the next conference I spot a few more of the latest and greatest technologies coming from women entrepreneurs.

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International Women’s Day is when we celebrate the strides made towards equality, but it also reminds us that gender is a powerful determinant of economic opportunities, particularly in developing countries.  Financial inclusion is one of the areas where we observe a gender gap—women in developing economies are still relatively more excluded from the financial sector than men, even after controlling for income and education

For the first time, we can quantify this gap using hard data and evaluate how women around the world save, borrow, make payments and manage risk, both inside and outside the formal financial sector. With the release of the Global Financial Inclusion (Global Findex) data, we now have a comprehensive, individual-level, and publicly-available database that allows for comparisons based on more than 150,000 nationally representative adults in 148 economies in 2011. The dataset includes over 40 indicators, but here we’ll focus on three main categories: account ownership, savings behavior and credit.

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I recently attended the American Economic Association annual conference in San Diego—the world’s largest gathering for economists.  There were more than 50 parallel sessions on a wide array of topics and several previews and presentations of papers –so there was a surplus of interesting ideas and insights. As an Economist who works in innovation, technology and entrepreneurship, I was particularly focused on papers that were relevant to my areas of interest.  Highlights are under the cut.

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In light of recent political and social unrest in the region, foreign investors are taking a “wait-and-see” attitude to projects in the Middle East and North Africa. For the region’s investment promoters, this demands better, more proactive performance than in the past. Fortunately, although much remains to be done, the investment agencies of the 19 MENA governments are, as a group, off to a good start, according to a World Bank Group report released today.

Global Investment Promotion Best Practices 2012: Seizing the Potential for Better Investment Facilitation in the MENA Region reports on the ability of investment-promoting institutions (IPIs) in 189 countries to handle investor inquiries and provide investors with quality business information through their Web sites. It shows that the MENA region was the only one in the world to achieve significant improvement since the last edition of GIPB in 2009, with the IPIs of Morocco and Yemen among the world’s three most improved.

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When the words “private sector” and “education” come together, they conjure up the widening chasm between the rich and poor: elite education in private schools. An article in The New York Times, for example, describes a growing education gap as contributing to a “kind of cultural divide” in the United States. A smart kid growing up without access to good education, the argument goes, will be limited for life, regardless of how bright or motivated he or she is.

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Migrant workers, earning money in jobs far from home, sent more than $400 billion to their families back home in 2012. Such remittances remain a vital source of income for millions of people in developing countries: Food, housing, education, health care and more are paid for every day by workers who earn money abroad. Through a simple and repetitive transaction – sending money home – those workers are really sending heart-warming feelings like hope for a better future and love of family.

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World Bank Private Sector Development:  SUBMITTED BY BRIAN LAUNG AOAEH ON WED, 2013

Note: This blog post is adapted from a much longer discussion by the author under the same title that was published at Tekedia on January 7, 2013. You can read that blog post here. Small sections of this article are identical to segments of the original article.

The problem in brief
Africa is experiencing a boom in entrepreneurship due to proliferating Internet and mobile computing technologies. Simultaneously African startups face the often life-threatening impediment of inadequate access to seed and early stage venture capital. Fortunately, a number of developments in other parts of the world point to the contours of an approach to solving that problem in a manner that necessarily starts out small, but that can eventually be scaled in a meaningful way.Various recent discussions about the environment for African startups suggest that they operate in an environment characterized by an acute lack of access to local and international angel and venture capital investors, a severe scarcity of local and international venture capital, and the presence a large number of aid organizations focused on supporting an even larger number of technology enabled social change efforts that usually do not create financial wealth.

The problem in brief

Africa is experiencing a boom in entrepreneurship due to proliferating Internet and mobile computing technologies. Simultaneously African startups face the often life-threatening impediment of inadequate access to seed and early stage venture capital. Fortunately, a number of developments in other parts of the world point to the contours of an approach to solving that problem in a manner that necessarily starts out small, but that can eventually be scaled in a meaningful way.

Various recent discussions about the environment for African startups suggest that they operate in an environment characterized by an acute lack of access to local and international angel and venture capital investors, a severe scarcity of local and international venture capital, and the presence a large number of aid organizations focused on supporting an even larger number of technology enabled social change efforts that usually do not create financial wealth.

Pieces of the puzzle

The first piece of the puzzle to solving this problem presents itself in the form of remittances from Africans in the diaspora. World Bank estimates show that the volume of remittances is large and growing.

The second piece of the puzzle presents itself in the form of the global shift towards, and widening acceptance of crowdfunding as a legitimate approach to improving access to capital for entities that otherwise might not be able to raise financing through traditional avenues.

The third piece of the puzzle manifests in the form of legislation in the United States that makes it possible for small investors to begin investing in early stage investment opportunities that were previously only available to professional angel and venture capital investors, or high net worth individuals.

Examples of how the latter two elements discussed above might be harnessed to finance startups facing an otherwise uncertain path to funding already exist in Israel and the United States. Major elements of the legislation remain to be finalized.

A business model designed to solve the problem

The business model I am proposing rests on certain key activities that will be performed by an Africa-focused early stage venture capital fund established specifically to implement this idea.

•    The fund will raise capital from a group of limited partners that wish to invest in early stage startups, and in particular seek exposure to startups originating from Africa.

•    The fund will select African startups in which to invest sufficient capital to reach the next funding milestone, but generally between $50,000 and $250,000.

•    The fund will seek additional capital from a crowd of large and small investors with a goal towards raising financing for the startups’ follow-on financings. Africans in the diaspora will be one group of constituents targeted by the fund’s fundraising outreach efforts in a bid to steer a portion of the annual remittance flows to Africa away from consumption and towards investing.

•    During this period the fund will be intimately involved in accelerating the startups in its portfolio with support that spans every area in which the startup might need assistance and help in order to ensure its ultimate success from the investors’ point of view.

The fund’s value proposition stated simply would be this: provide the most promising African startups with access to seed and early stage capital and a partner committed to their ultimate success, and provide investors from around the world with an opportunity to earn attractive monetary and financial returns.

This will not be an easy effort. The experience of an effort called the Startup Africa Fund proves instructive for the individual or team that seeks to implement this.

The idea of scaling the solution described above comes by way of competition – many more funds set up by other individuals specifically to copy and implement this model, and an increasing interest in investing in African startups from the global community of angel and venture capital investors currently unassociated with this effort. The durability of this approach is closely tied to successful outreach to the African Diaspora aimed at steering a portion of remittances, and eventually foreign direct investments towards early stage African startups.

An Africa-focused seed and early stage venture capital fund that invests in technology startups and generates outsized returns for its investors is the surest way to get more investors paying attention to, and investing in African startups. Such a fund would generate jobs, create wealth for its various stakeholders and increase economic prosperity within the communities in which startups in its portfolio operate. In addition, some of the startups this fund would invest in would undoubtedly improve the lives of many people in Africa and elsewhere. With hard work and a little luck, a number among them might even change the world in the process.
 

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Like every other development institution, The World Bank Group’s International Finance Corporation (IFC) is deeply concerned with how to create more and better jobs. There’s no question that jobs are the key issue in any discussion about ending poverty.  The 60,000 poor people who participated in Deepa Narayan’s Voices of the Poor study 13 years ago were right—jobs are the surest way out of poverty for people across the world.

Today, IFC publishes a report on the findings of a study about how jobs are created by the private sector.  Given the private sector provides 90 per cent of jobs, the estimated 600 million that   need to be created by 2020 will inevitably have to come from the private sector.

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A normative definition that I use as a recovering angel investor myself is that an angel investor actively helps a seed stage startup succeed with both mentorship and capital in exchange for those intangible benefits of mentorship and a return on investment.  In World Bank parlance, then, they automatically provide both investments and technical assistance with no agency costs; a great recipe for solving multiple problems (funding capacity, entrepreneurial capability and access to early stage finance) in a cost effective way. Knowing that 318,480 of them invested $22.5 billion on 66,230 ventures in the US and achieved 27% annual returns forms the basis of our hypothesis that angel investing could work well in the developing world.

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12-12-12 marks an auspicious day on which couples are rushing to get married. Globally, many women and men have been waiting for this day to mark as the day they got married. Those who miss it will need to wait 100 years to have another chance like this one again. But depending on where in the world they are, getting married will mean different things for these women, their career and future business opportunities.

In many economies around the world women are legally prevented from conducting basic transactions which are necessary precursors to entrepreneurship and employment. Women, particularly married women, can be barred from actions such as opening bank accounts, determining where to work or live, and having the ability to move freely. In some economies married women need their husbands’ permission to carry out such actions.

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The post When Business Gets Personal: How Laws Affect Women’s Economic Opportunities appeared first on InnovationAfrica.

In the wake of the first global recession since World War II, governments around the world are looking for ways to boost growth and competitiveness. Given the fragility of the business and economic climate—and strained public coffers—the responsibility to get policy right is acute. But can public policy makers improve on their hit and miss record of intervention in the past? I would pick out three useful lessons that we have learned, often the hard way:

■    Don’t focus on single industries in the hope of “picking winners.”: Governments need to take a broad-based, inclusive approach to growth, particularly if a key aim is the creation of jobs. Large domestic service sectors that are labor-intensive are creating all net new jobs in high-income economies and 85 percent in middle-income countries. Don’t get me wrong. New technologies can have a transformational impact beyond their particular sectors, enabling future productivity improvements and growth—think IT. But it is the low-tech green jobs in local services, such as improving building insulation and replacing obsolete heating and cooling equipment, that have a greater potential for creating jobs in the near term.

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