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UNCTAD’s Entrepreneurship Policy Framework and Policy Guidance Brasilia June 26, 2012 Fiorina Mugione Chief, Entrepreneurship Section Division on Investment and Enterprise

2 It carries out 3 main functions:
The organization works to fulfill this mandate by carrying out three key functions It functions as a supported by discussions with experts and exchanges of experience, aimed at It undertakes research, policy analysis and data collection for the debates of government representatives and experts. It provides technical assistance tailored to the specific requirements of developing countries, with special attention to the needs of the least developed countries and of economies in transition. When appropriate, UNCTAD cooperates with other organizations and donor countries in the delivery of technical assistance. The organization works to fulfill this mandate by carrying out three key functions It functions as a supported by discussions with experts and exchanges of experience, aimed at It undertakes research, policy analysis and data collection for the debates of government representatives and experts. It provides technical assistance tailored to the specific requirements of developing countries, with special attention to the needs of the least developed countries and of economies in transition. When appropriate, UNCTAD cooperates with other organizations and donor countries in the delivery of technical assistance. The United Nations Conference on Trade and Development (UNCTAD), established in 1964 Promotes the development friendly integration of developing countries into the world economy It carries out 3 main functions: Forum for intergovernmental deliberations and consensus building Undertakes research, policy analysis and data collection Provides techincal assistance

3 Entrepreneurship Programme
3 main areas of work: Research, analysis and consensus building. Policy briefs, roadmaps, action plans EMPRETEC: UNCTAD’s flagship entrepreneurship programme helps promising entrepreneurs to start, grow and develop their businesses. Focus on entrepreneurial behaviours Business Linkages between large corporations and domestic suppliers.

4 Entrepreneurship policy itself is part of wider enterprise development and private sector development policies Private Sector Development Policy Focus on improving growth prospects of SMEs, providing industrial direction, building business infrastructure… Policies to improve the general economic and business climate Entrepreneurship Policy Focus on unleashing entrepreneurial capacity and facilitating start-ups

5 The UNCTAD Entrepreneurship Policy Framework comprises 6 areas that have a direct impact on entrepreneurial activity

6 Policy objectives Recommended actions
Identify country specific challenges Map the current status of entrepreneurship in the country Identify country-specific entrepreneurship opportunities and challenges b. Specify goals and set priorities Define strategies to achieve specific goals and reach specific target groups Develop and prioritize actions c. Ensure coherence of entrepreneurship strategy with other national policies Align entrepreneurship strategies with overall development strategy and other private sector development strategies Manage interaction and create policy synergies

7 Policy objectives Recommended actions
d.Strengthen the institutional framework Designate a lead institution Set up an effective coordination mechanism and clarify mandates Engage with the private sector and other stakeholders Ensure business-like service delivery e. Measure results, ensure policy learning Define clear performance indicators and monitor impact Set up independent monitoring and evaluation routines Incorporate feedback from lessons learnt

8 Examples of selected policies and initiatives:
Costa Rica: National Entrepreneurship Policy ( ) Rwanda: Entrepreneurship is embedded in the country’s Economic Development and Poverty Reduction Strategy ( ) South Africa: The City of Johannesburg developed a Youth Entrepreneurship Strategy and Policy Framework (2009) Costa Rica: The country’s National Entrepreneurship Policy ( ) identifies support for youth and women entrepreneurs, preservation of the environment, intercultural integration and regional brand development among its priorities. The entrepreneurship strategy identifies key policy areas of action, in accordance with an assessment of the barriers to entrepreneurship identified. These include: fomenting entrepreneurship, institutional articulation, information and monitoring, financial instruments for entrepreneurs, guidance of entrepreneurs, innovation and technological development for entrepreneurs and gearing entrepreneurship towards exports. ( Rwanda: In Rwanda, entrepreneurship falls under the country’s SME policy and the Rwanda Economic Development and Poverty Reduction Strategy ( ). Fostering entrepreneurship also features prominently in Rwanda’s “Vision 2020”, one of whose key long term objectives is to create a productive middle class and foster entrepreneurship. ( South Africa: In South Africa, high unemployment among the youth is the government’s major concern. Accordingly, government entrepreneurship services and resources can be found under the National Youth Development Agency, in the Ministry of Economy. This is also the case in Barbados, whose entrepreneurship strategy, the Youth Entrepreneurship Scheme (YES), is located under the Ministry of Education, Youth Affairs and Sports. ( Malaysia: In its Vision 2020, and in the 10th Malaysia Plan the Prime Minister identifies entrepreneurship as a key element to generate economic growth and achieve the goals premised on higher income, inclusiveness and sustainability. Singapore: The Entrepreneurship Development Agency SPRING Singapore

9 Policy objectives Recommended actions Examines regulatory
requirements for start-ups Benchmark time and cost of starting a business across countries Benchmark sector- and region-specific regulations Set up public-private dialogue on regulatory costs and benefits Balance regulation and standards with sustainable development objectives b. Minimize regulatory hurdles for business start-ups where appropriate Review and, where appropriate, reduce regulatory requirements (e.g. licenses, procedures, and administrative fees) Introduce fast-track mechanisms and one-stop-shops to bundle procedures Enhance ICT-based procedures for businesses registration and reporting

10 Policy objectives Recommended actions
c. Build entrepreneurs’ confidence in the regulatory environment Ensure good governance Make contract enforcement easier and faster Establish alternative conflict resolution mechanisms Guarantee property protection Reduce the bankruptcy stigma and facilitate re-starts d. Guide entrepreneurs through the administrative process and enhance the benefits of formalization Carry out information campaigns on regulatory requirements Make explicit the link between regulatory requirements and public services, including business support services Assist start-ups in meeting regulatory requirements

11 Examples of selected recommended actions:
Indonesia: Regional “Ease of Doing Business“ Benchmarks allows for more easily comparable conditions within the same country and creates peer pressure for reform Macedonia: One-Stop-Shop Business Registration enables entrepreneurs to register their business within 4 hours by visiting one office, obtaining the information from a single place, and addressing one employee Zambia: Electronic Case Management System provides electronic referencing of cases, a database of laws and public access to court records Some countries, including Indonesia and Vietnam, have set up similar benchmarks within their boundaries, comparing the ease of doing business between administrative regions. These internal benchmarks have the advantage that they compare regulatory requirements within the same national environment, where socio-economic conditions tend to be fairly similar. Also, political competition among provinces can be even tougher than between states. In fact, national media are often “naming and shaming” the poor performers, which has proven to be a strong driver of political reform. (UNCTAD Inventory) Macedonia: In January 2006, Macedonia has introduced a one-stop-shop system that enables investors to register their businesses within 4 hours. One can register a company in Macedonia by visiting one office, obtaining the information from a single place, and addressing one employee. This significantly reduces administrative barriers and start-up costs. The one-stop-shop system operates within the Central Register via 32 electronically integrated offices located throughout Macedonia. With the development of e-government services, company registration will soon be available online. The new registration procedure is simpler, decentralized and public oriented, allowing citizens to grasp new business opportunities much faster. ( Zambia: In 2011 Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. Additional judges were appointed and as many as 10 judges were trained in commercial law to improve the quality of judgements and cut the backlog of cases awaiting hearings. The standard of the court process is being strengthened further through a programme of education, including training on computer literacy and the court case management system for both Judiciary staff and lawyers. (World Bank Doing Business Report 2011) Panama: Panama Emprende is a new system for company registration, which allows people to open their business in a few minutes, in an electronic way without the need for queues or burdensome procedures.

12 Policy objectives Recommended actions
Embed entrepreneurship in formal and informal education Mainstream the development of entrepreneurship awareness and entrepreneurial behaviours starting from primary school level (eg. Risk taking, teamwork behaviours,..) Promote entrepreneurship through electives, extra curricular activities, career awareness seminars and visits to businesses at secondary level Support entrepreneurship courses, programmes and chairs at higher education institutions and universities Promote vocational training and apprenticepship programmes Promote and link up with entrepreneurship training centres b. Develop effective entrepreneurship curricula Prepare basic entrepreneurship skills education material Encourage tailored local material, case studies and role models Foster interactive and on-line tools Promote experiential and learning-by-doing methodologies

13 Policy objectives Recommended actions c. Train teachers
Ensure teahcers engage with the private sector and with entrepreneurs and support initiatives that bring entrepreneurs to educational establishments Encourage entrepreneurship training for teachers Promote entrepreneurship educators’ networks d. Partner with the private sector Encourage private sector sponsorship for entrepreneurship trainining and skill development Link up business with entrepreneurship education networks Develop mentoring programmes

14 Examples of selected policies and iniatitives:
Panama: UNCTAD’s Empretec programme has been adapted To rural micro entrepreneurs with low levels of literacy in provincial Panama and Vietnam Brazil: The Entrepreneurial Methodology designed to support Entrepreneurship teaching in the school system (for youth from 4-17 years old) Indonesia: Ciputra Quantum Leap Entrepreneurship Centre Annual Entrepreneurship Teaching Conference Medio Oriente y Africa del Norte INJAZ: Panamá: Brasil:Brasil: Indonesia: Panamá: Singapur: Singapore: Singapore Managament University has developed courses in the creation of businesses, consulting to SMEs and finance for entrepreneurs

15 Examples of selecetd policies and initiatives:
Perú : Instituto Peruano de Acción Empresarial An institution of higher education dedicated exclusively to entrepreneurs and whose faculty is composed of professors who are entrepreneurs Barbados: The Barbados Entrepreneurship Fund Dedicated to promoting entrepreneurship in the country. One of its key areas of work is « education and talent » Among its diverse activities, an annual contest is organized in high schools in which young students need to start a company with only 20$ Global: Endeavor helps high impact entrepreneurs around the World through consulting, mentoring, access to network of motivational and business leaders Peru, IPAE: Barbados Entrepreneurship Foundation: Endeavor: E-Mentoring UNCTAD: Technoserve: Global: Technoserve Business solutions Tt poverty

16 Policy objectives Recommended actions
Support greater diffusion of ICTs to the private sector Launch awareness and capacity building campaigns on ICT use Stimulate the introduction of ICT into business Supoprt the development of on-line and mobile market information platforms Provide training on ICTs to target groups such as women and rural entrepreneurs b. Promote inter-firm networks that help spread technology and innovation Promote horizontal linkages through cluster development Provide assistance for standardization and quality certification to networks of local enterprises (including social and environmental standards) Promote business linkages through supplier development

17 Policy objectives Recommended actions
c. Build bridges between public bodies, research institutions, universities and the private sector Identify joint research activities with clearly designated participants and beneficiaries Promote PPPs and mixed public/private structures to diffuse innovation Develop market friendly university-industry collaboration Promote institutional synergies at the sectoral level d. Support high-tech start-ups Establish high-tech business incubators, knoweldge hubs and science parks Facilitate start-ups that commercialize innovation Build networks in knowledge intensive sectors wth leading science experts and academics around the world Give researchers and innovators streamlined access to cost-effective patent protection

18 Example of selected policies and initiatives:
Argentina: FONSOFT (Fiduciary Fund for the Promotion of the Software Industry) Offers non refundable contributions to entrepreneurs with business plans related to the development of software Global: UNCTAD’s Business Linkages Programme Supplier development programme, linking SMEs to the supply chains of large corporations Panamá: The Panama Business Accelerator in Knowledge City Is a space which focuses on the facilitation and acceleration of dynamic and competitive enterprises Egypt: The Ministry of Communications and Information Technology Launched a strategy to support SMEs in the field of ICT Argentina: UNCTAD: Chile: CORFO Panamá: Egipto: UNCTAD’s ICT Policy Review, Egypt: Brazil: Lei da innvacao 2004 Chile: Corporation for the promotion of production Executive organism for the implementation of government policies in the area of entrepreneurship and innovation Brazil: Innovation Law of 2004 which provides support and incentive mechanisms to foster alliances between Universities, technological institutes and local enterprises

19 Policy objectives Recommended actions
Improve access to relevant financial services on appropriate terms Develop public credit guarantee schemes Stimulate the creation of private mutual guarantees Promote FDI in financial services, supply chain finance (factoring) and leasing Introduce collateral-free loan screening mechanisms b. Promote funding for innovation Provide incentives to attract venture capital investors and business angels Encourage equity and “risk capital” financing modalities Provide performance-based loans and incentives for innovation and green growth Facilitate the use of intellectual property as collateral

20 Policy objectives Recommended actions
c. Build the capacity of the financial sector to serve start-ups Establish a national financial charter Promote public-private sector partnerships for specific groups Provide capacity-building grants and technical assistance to expand lending activities (e.g. financial service provision through post offices and other “proximity lenders”; use of new banking technologies to reach rural areas) d. Provide financial literacy training to entrepreneurs and encourage responsible borrowing and lending Set up financial and accounting literacy trainings Undertake appropriate supervision of financial products offered to social and micro-entrepreneurs Enhance private credit bureau and public credit registry coverage

21 Examples of selected policies and initiatives:
México: Nacional Financiera (NAFIN) offer on-line factoring services to SME suppliers Global: E+Co Venture Capital Fund is an international venture capital fund that specializes in providing debt and equity investments to small and medium-sized renewable energy entrepreneurs in Africa, Asia and Latin America. Perú: Caja Municipal Sullana is a network of municiapl savings banks that is the most important provider of financial services to SMEs in Peru. México: México: Global: ( UNEP-FI) Nigeria: Perú: Sud Africa: UNCTAD (2009) « Enhancing the Role of Domestic Financial Resources in Africa’s Development: a Policy Handbook » South Africa: A National Financial Charter came into effect in The main objective was to transform the financial sector into a leading force for the empowerment of black entrepreneurs Chile: Guarentee Fund for Small Entrepreneurs Is a Chilean public guarantee fund to increase access to finance by providing partial guarantees to banks for entrepreneurs who lack the necessary collateral to gain access to credit, or need longer maturities.

22 Policy objectives Recommended actions
Highlight the value of entrepreneurship to society & challenge negative cultural biases Launch entrepreneurship outreach and awareness campaigns at national, regional and local levels in collaboration with all stakeholders Utilize the media and spaces for policy dialogue, speeches, addresses and reports to communicate support for entrepreneurship. Disseminate information about entrepreneurship and its impact on the economy. Publicly celebrate entrepreneurship role models through awards, etc. Involve entrepreneurs in policy dialogue processes to sensitize government officials b. Raise awareness about entrepreneurship opportunities Advertise business opportunities linked to national sustainable development strategies and related incentive schemes Organize information and career fairs, forums and summits on business opportunities, including in specific economic sectors or on specific business models such as micro-franchising

23 Policy objectives Recommended actions
c. Stimulate private sector led-initiatives Support private sector-led campaigns Facilitate business exchange platforms, business portals, fairs, business associations and clubs Engage diaspora community in local entrepreneurship networks

24 Examples of selected policies and iniatives:
Global: Global Entrepreneurship Week is a global camapign to raise awareness and promote entrepreneurship initiatives Malaysia: Opportunities for entrepreneurs highlighted in the New Economic Agenda Colombia: Law for the Promotion of a Culture of Entrepreneurship (2006) Global: Global Entrepreneurship Week is a global campaign to raise awareness and promote entrepreneurship initiatives. In 2010, there were more than 1,576 examples of political engagement and six presidents and heads of state publicly expressed their support for Global Entrepreneurship Week and the important role that entrepreneurship has in society. Thousands of activities connected students and policy makers, aspiring and established entrepreneurs, companies and businesses. From business plan competitions to rallies demonstrating the power and potential of entrepreneurship, each event formed part of a global movement. ( Malaysia: The Prime Minister of Malaysia communicated opportunities for entrepreneurs in Malaysia's New Economic Agenda in industries including electrical, electronic, IT, creative industries and life sciences and biotechnology fields. For example, Malaysia’s future in the electrical and electronic sector must be focused not only in manufacturing but in research and development and design, where Malaysian companies are driving innovation rather than simply importing it. Among the measures the Government envisaged were incentives for high-value research and support for SMEs supplying larger firms on a larger scale basis. In resource based industries, such as the palm oil, strengthening research initiative should lead to indigenous technology that better meets market demand, such as health fats and oils, Biofuel from biomass, cosmetic and biodegradable plastics. ( Ghana & Rwanda: Examples of successful micro-franchises can be found in Ghana where franchise opportunities exist for individuals to distribute Fan Milk products, a transnational corporation which produces nutrition and refreshment dairy products. The start-up costs include US$250, a bike, a freezer and daily inventory. In Rwanda, Solar Sister is a company focused on women-centred solar lighting products. As of 2009, more than 150 individual agents had set up a direct sales franchise, with US$500, a start-up kit and some training and a daily inventory. (UNCTAD Inventory; Dalberg Development Advisors 2009) Colombia: Bavaria Entrepreneurial Social Network (Red de Emprendedores Bavaria) is the largest network of entrepreneurs in Latin America with over 25,000 entrepreneurs registered from more than 500 municipalities in the country. It is a virtual space for contacts, business opportunities exchange, distance learning and matchmaking. A team of young professionals animate the network and follow up on initiatives. ( South Africa: Youth Entrepreneurship Campaign is a partnership for promoting youth entrepreneurship in the country Chile: The Start-Up Chile programme has been used as a platform by the Chilean government to comunicate and positive image of entrepreneurship

25 Your analysis of the situation in your country:
YES NO IN PART Are there surveys for assessing the national entrepreneurial environment? Do mechanisms, such as multi-stakeholder forums, exist to promote policy dialogue on entrepreneurship? Does the country have a dedicated policy framework to promote entrepreneurship? Is there a national entrepreneurship strategy? Is there clarity about the priorities and type of entrepreneurship that the country wants to encurage? Are there specific policies in place to favour start-ups and SMEs? Are there specific policies in place to ecourage the transition to the formal business sector?

26 Your analysis of the situation in your country:
YES NO IN PART Is the entrepreneurship policy closely coordinated with other national policies? Is entrepreneurship embedded in other national policies? Is there a ministry, agency of instituion championing entrepreneurship? Is there a ministerial level entity in charge of coordination of the strategy? Is there a deliberate policy to promote formal entrepreneurial activity among specific groups of the population? Are there specific targets or measurable objectives to increase entrepreneurial activity? Does the government assess the impact of policy measures? Does the government support regualr independent policy evaluations? Does the government incorporate feedback from lessons learnt? Is there an annual (periodic) report on the state of entrepreneurship?

27 For each policy area: policy objectives and recommended actions,
checklist of questions, set of indicators to measure overall policy effectiveness, on-line inventory of good practices, Therefore the EPF provides a practical toolkit for the formulation, implementation and measurement of entrepreneurship policies Key policy areas of the EPF Policy objectives and recommended actions for each area On - line Inventory of Best Practice Policies to support formulation* User guide method monitoring and evaluation * Available on UNCTAD s web site

28 Recommended approach for policymakers
First, policymakers need to identify opportunities and challenges in promoting enterprise development in general and entrepreneurship in particular, in the context of the overall national development strategy. Second, policymakers need to evaluate and benchmark the current environment in which entrepreneurs set up, operate and grow their businesses. Third, policymakers need to define the overall entrepreneurship strategy and priorities, in terms of objectives and targets as well as policy gaps and shortcomings. Fourth, taking into account country-specific conditions, policymakers need to design a focused set of initiatives to address gaps and shortcomings identified. Fifth, policymakers need to regularly monitor and assess the impact of the policies put in place to ensure the relevance and the effectiveness of their actions.



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