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Entrepreneurship and Small Business Development : A research program
Mulu Gebreeyesus (Ph.D.)
Research Fellow and Coordinator of the program
E-mail: mulu.yesus@gmail.com
የኢትዮጵያ ልማትምርምርኢንስቲትዩትETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE
Dissemination WorkshopOctober 24, 2017
Hilton Hotel, Addis AbabaEthiopia
Presentation outline
1. Background and rational
2. Program objectives
3. Proposed Activities (2016-19)
4. Progress so far
5. Other planned and ongoing activities
6. Acknowledgments
1. Background and rational
The development of Micro and Small Enterprises (MSEs) has been high on the agenda of the Ethiopian government as a means to generate employment and reduce poverty
A full-fledged MSEs Development strategy was formulated in 1997
This was institutionalized by the establishment of FMSEDA and RMSEDAs
The strategy was revised in 2011 (renewed interest and far more ambitious targets)
The vulnerable segment of the society particularly women and youth have been given priorities in the employment generating schemes
Background cont.The role of MSEs is anticipated beyond generating employment for the urban unemployed. nurturing future industrialists
The manufacturing have been given high emphasis in the MSEs development
The Federal implementing agency (also regional) has been restructured which resulted in the replacement of FeMSEDA with two separate federal agencies:
the Federal small and medium manufacturing industry development agency (FeSMMIDA) under Ministry of Industry (MoI)
the Federal Urban Job creation and Food Security Agency (FUJCFoSA). FeSMMIDA under Ministry of Urban Development and Housing (MUDH)
Background cont.
Despite the unparalleled attention given to the MSEs in the development course of Ethiopia, there is huge knowledge and information gap regarding the sector;
No systematic evidence, except the administrative reports, how many enterprises exist and how much and what type of employment has been generated huge discrepancy and inaccuracy in the enterprises and employment numbers reported No national/regional level representative business directory (database) exist difficult to monitor the sector development
Little is known to what extent do the massive entrepreneurial schemes underway created dynamic entrepreneurs and industrialists
Limited knowledge regarding the circumstances in which the small business entrepreneurs are operating and problems faced
The lack of research is aggravated by the absence of reliable and sector representative dataset (existing data fragmented or limited in scope)
2. Program objectives
In 2016 EDRI initiated a long-term research program namely“Entrepreneurship and Small Business Development” (ESBD) to fill the gap
The ESBDE program has the following two core objectives;
(i) The first is to conduct rigorous research and produce evidence-based knowledge and impact evaluation of programs that can be used to improve the existing policies and practices of the government and all other relevant actors
(ii) The second objective is to build a stronger and more integral knowledge support system and database within the country to underpin future policy analysis in small business development
Creating a research depository that makes the international experience and literature accessible to stakeholders working in the MSEs
Developing comprehensive database systems on MSEs in Ethiopia through compiling existing ones and new survey
3. Proposed Activities (2016-19)
The research program has identified detailed activities and work plan for the first three years (July 2016 – June 2019), which involves;
Preparation (e.g. team formation and resource mobilization)
Stock taking of existing literature and data
A baseline data collection (two types - 8000 MSEs andqualitative/quantitative survey on BDS providers/ beneficiaries)
Analysis (producing 10+ papers) on thematic areas presentedbelow and survey report
Outreach to various stakeholders (including policy makers,program practitioners, the private sector and donorcommunity)
Activities cont.2016 2017 2018 2019
Main Activities and timeline 2nd
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Phase I
Preparations (program guideline, team formation,
consultations etc.)
Background papers – (3 drafts)
Main Survey – pre-survey preparation, field survey
(8,000 MSEs) and data cleaning
Analysis I (3 papers based on the survey data)
Validation and disseminations workshops
Phase II
Analysis II (3 more papers based on the survey
data)
Consultation and validation workshop
Quantitative/Qualitative survey (BDS providers,
intermediaries, and beneficiaries)
Analysis III based on the both the MSEs survey and
quantitative/qualitative survey (at least 2 papers)
Validation and disseminations workshops
Preparation for 2nd round MSE survey (panel data)
4. Progress so far
Formulation of core research team1. Dr. Mulu Gebreeyesus: Research Fellow and Coordinator of the program (EDRI)
2. Prof. Wim Naude: Dean of the Maastricht School of Management
3. Dr. Girum Abebe Tefera: Research Fellow (EDRI)
4. Dr. Berhiu Assesfa: Research Fellow (EDRI)
5. Dr. Tigabu Getahun: Research Fellow (EDRI)
6. Mr. Abebe Ambachew: Research Associate (EDRI)
• The program also involves other researchers from EDRI and outside
o We are particularly interested to bring onboard researchers from respective economic departments of universities in each towns where survey is conducted
Progress: Resource mobilization
We have so far mobilized USD 809,360 from 3 different sources
Source USD (%) Duration
IDRC 237,186 29.3 2016-2017
ECRC/EDRI 182,213 22.5
EU 389,961 48.2 2017-2019
Total 809,360 100 2016-2019
The IDRC/ECRC fund was able to finance the collection of the baseline data on 8000, MSEs and produce survey report and about 4-5 thematic papers
The EU finance which started this year is being used to produce more papers and additional survey related to BDS actors
I would like to thank IDRC, ECRC and the EU!
Survey Questionnaire: Contents
1) General Information 8) Investment and Finance
2) Characteristics and history of the enterprise
9) Business Development Services
3) Characteristics of the owner (entrepreneur) 10) Business Practices
4) Growth Orientation 11) Greening MSEs
5) Employment and earnings 12) Occupational Safety and health of workers
6) Marketing and Supply Linkages 13) Production, Sales and Costs
7) Competition, Technology and Innovation 14) Cognition, time and risk preferences
Progress: Baseline data collection
One of the major initial activities was to collect baseline data taking a sample of 8,000 manufacturing MSEs in 10 major cities
The survey was conducted b/n (Oct. 2016 - May 2017) providing us with
8174 MSEs
Geographical and size distribution of the MSEs survey
City
1-5 workers
(Micro)
6-30 workers
(Small)
More than 30
workers Total (%)
Addis Ababa 1,195 3,035 263 4,493 55.0
Outside Addis (9
towns) 2115 1518 48 3681 45.0
Total 3,310 4,553 311 8,174 100
(%) 40.5 55.7 3.8 100
Progress: Baseline data collection
The 9 towns are; ---Adama, Bahir Dar, Dessie, Dire Dawa, Gondar, Hawassa, Jigjiga, Jimma and Mekelle
Progress: Research outputs produced
Research topics First draft
1. Literature Review: Ethiopia’s MSEs Development policy,
practices and performance
Completed
2. The role of small business and sector on creating
productive employment for the youth and women
Completed
3. Who are growth-oriented entrepreneurs? Evidence from a large scale survey of micro and small enterprises
Completed
4. Innovation practices, productivity and growth performance
in the MSEs
Completed
5. Confused about Entrepreneurship and Development? Perspectives for Perplexed Policymakers
Completed
6. Baseline survey report Completed
Objective of this workshop
The aim of today’s workshop is to present and discuss the research outputs so far
Topics Presenter
The Assessment of existing MSEs data set and the ESBDE
Survey Methodology
Dr. Girum Abebe
Baseline survey report: Mani features of MSEs Abebe Ambachew/ Dr.
Mulu G.
Who are growth-oriented entrepreneurs? Dr. Girum A.
Innovation, Productivity and Growth Performance of
MSEs
Dr. Tigabu Getahun
The Role of the Small Business Sector on Creating
Productive Employment
Dr. Berihu Assefa
Determinants of MSEs use of
energy efficient technologies in Ethiopia
Dr. Seid Hassen
5. Other planned and ongoing activities
Planned and undergoing thematic areas of research
(1) Understanding the pattern of structural transformation in Ethiopian through the lens of MSEs growth performance
(2) The determinant factors of enterprises energy efficiency and conservation activities
(3) Promoting MSEs through State support: Does it work? (the story of selection into cooperatives and intensity of state support)
(4) What determines business practices in micro and small enterprises?
(5) How does the business environment affect MSE firms entry and performance (with special focus on financing, regulatory and infrastructure)?
(6) The impact of power outage on enterprises productivity/production
(7) Size class dynamics of MSEs: Which firms managed to upgrade/grow?
Other planned cont.
(1) Dissemination and stakeholders engagement
Organizing dissemination workshop (24th Oct. 2017)
Extra engagements (distribution of research outputs, policy briefs, and other workshops)
(2) Conducting survey on BDS service providers and beneficiaries (from Jan 2018)
(3) Mobilizing further resources for the 2nd round survey to be held in 2 years time preparation undergoing
Future major activities
AcknowledgementsAllow me to thank several institutions and individuals that made to happen this progress
- EDRI and the management for overall support
- IDRC for their critical and catalytic role in initial financing
- ECRC/EDRI for coming forward to raise matching fund
- The EU delegation here in Addis for ensuring the sustainability of this project in the next two years
- Different government agencies at Federal, regional and town level for their generous cooperation
- Research team members for their determination and team sprit
- Finally, supervisors, enumerators and data managers for their painstaking work and delivery
THANK YOU FOR YOUR ATTENTION!
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