In most regions of the world, over 70 percent of freshwater is used for agriculture. By 2050, feeding a planet of 9 billion people will require an estimated 50 percent increase in agricultural production and a 15 percent increase in water withdrawals.
About 12 years ago, one of my World Bank Group colleagues told me that his team had just launched an incubation program and I should join the unit. “Incubation?” I asked. “What does that mean?” I’ve always believed that a strong domestic private sector is the key to a sustainable development path for developing countries. So I decided to make the leap and, fast forward 12 years, terms like SMEs, start-ups, incubation, acceleration, and business development services have become part of my daily vocabulary.
Over the past 10 years, I’ve had the chance to meet many entrepreneurs, policymakers, and investors. I saw them succeed, and I saw them fail. Most importantly, from their experiences, I learned a few important lessons.
1) Growth aspirations
We should never forget to distinguish between entrepreneurs who have a small business to sustain their families — necessity entrepreneurs — and those who have ambitions to become market leaders — opportunity entrepreneurs. Why? Because they are driven by different incentives, face different challenges, and have different chances to scale their companies.
2) The lifecycle of an enterprise
The lifecycle of an enterprise refers to different stages that define the evolution of a business — from idea to prototype, from initial sales to profitability, expansion, and growth. This sounds very linear but it is, in fact, a roller coaster. And unfortunately, as opposed to real roller coasters, which are usually pretty safe, many firms fall off the ride and, among those who stay on, most don’t grow. In OECD countries, out of 100 firms that start, only seven actually grow.
Your project or program can target either segment of entrepreneurs but you need to be clear about which one you are targeting so you can manage effectively your — and your stakeholders’— expectations.
3) Unconscious incompetence
How do you know what will unlock the company’s ability to grow? How does the entrepreneur know what the company needs to scale?
The challenge with approaches that wait for the entrepreneur to identify the problem and ask for assistance — the business development services model — is what psychologists call “unconscious incompetence.” Basically, you don’t always know what you don’t know. Think about it: what do entrepreneurs always answer if you ask them what they need? ...finance! How about customers?! How about management and processes? I’m not saying finance is not needed, but it is an over-stated need …or perhaps as marketing professionals would say – a “want,” not a “need.”
A comprehensive diagnostic of the enterprise would identify the correct pain point. In many cases, the “need” is actually not finance, but rather “profitability” and “growth.” It may be external finance, or it may be more customers or higher efficiency that gets you there.
Across large swaths of the developing world, a new trend is taking hold: governments are targeting public and private investments in specific geographic areas in the hopes of creating spatial “development corridors.” These strategies are guided by the belief that concentrating and co-locating infrastructure investments in specific locations can create clusters of interconnected firms, nurture the development of value chains, reduce unemployment, and improve the provision of basic public services.
As we celebrate World Water Day, I find myself thinking about my work and one central question: how do you reach 8 million Filipinos with no access to clean water? I remember growing up in Pampanga, a province north of Manila, and visiting my aunt’s house every weekend where I had to pump water from a deep well and carry buckets so we could water plants, wash clothes, and clean the backyard pig pen. Fortunately, these days there’s always water from the faucet so we don’t work as hard to do chores.
But the story isn’t the same for everyone. While our local water utility largely improved its services over the years, I can’t say the same for the rest of the country, especially in rural areas. While there are already over 4,700 water utilities in the Philippines, about half are very small and unregulated.
The development community has experienced various “revolutions” over the years – from microfinance to women’s rights, from the green revolution to sustainable development. Each of these awakenings has improved our understanding of the challenges we face; each has transformed the development landscape, mostly for the better.
We now see the beginnings of another, long-overdue, revolution: this one focused on the fundamental role of land in sustainable development. Land has often been at the root of revolutions, but the coming land revolution is not about overthrowing old orders. It is based on the basic fact that much of the world has never gotten around to legally documenting land rights. According to the World Bank, only 10% of land in rural Africa and 30% of land globally is documented. This gap is the cause of widespread chaos and dysfunction around the world.
India is the fastest-growing major economy in the world with significant Government investments in infrastructure. According to estimates by WTO and OECD, as quoted in a report from the United Nations Office on Drugs and Crime, India: Probity in Public Procurement, the estimated public procurement in India is between 20 and 30 percent of GDP.
This translates to Indian government agencies issuing contracts worth an estimated US$ 419 billion to US$ 628 billion each year for various aspects of infrastructure projects. Ideally, in contractual agreements no disputes would arise and both sides would benefit from the outcome. However, unexpected events occur and many contracts end in dispute. Contractual legal disputes devoid project benefits to the public as time and resources are spent in expensive arbitration and litigation. As a result, India’s development goals are impacted.