Small-scale entrepreneurship is widespread in developing countries, yet very few of these entrepreneurs are successful in growing their businesses beyond initial levels. Many constraints play a role, including financial, technical, and informational barriers. Yet, even when these barriers are lifted in experimental studies, we do not see the type of growth one would expect if these constraints were truly binding. In addition, many of the interventions studied, especially those targeting managerial and informational barriers, often suffer from low program take-up.
The value chain approach is in vogue for leading global firms and manufacturers (Credit: World Bank)
This is the first post in the “Supply Chain Junkie" series, which gives personal insights on supply chains- -the “new normal" of doing business that is currently being prioritized by IFC.
My debut in the fashion industry has not been easy, to say the least. I thought my ideas would speak for themself, but I’ve come to realize that I must significantly sharpen my design execution skills if I am to opt for a life in the fashion world. Through my journey into the ephemeral world of haute-couture and prêt-à-porter, I have come to know, understand and appreciate the brain behind the world’s leading fashion companies, including their business model, adaptive, expansionist and survival strategies and, of course, their logistics management practices. It was this very fascination with the fashion industry that made me eager to learn more about how lead fashion companies manage their products’ lifecycle and Value Chain (VC). I, thus, became more interested in the VC approach to doing business than ever. This might explain my excitement when my department at IFC decided to get into this terrain.
A solid business environment can help fragile states rebuild (Credit: World Bank)
One and a half billion people live in areas affected by fragility, conflict or large-scale organized criminal violence. Their hope at a better life is often marred by the realities that exist around them. It is indeed a vicious cycle as one of the findings from the Word Bank’s World Development Report 2011: Conflict, Security and Development, confirms that lack of economic opportunities and high unemployment are key sources of fragility.
However, it is not completely hopeless in fragile states. Our work in the World Bank Group shows us daily that a favorable business environment in which entrepreneurs are enabled provides an opportunity for people to escape poverty. The key question is-- how can we build a solid business environment in fragile states to ensure strong private sector-led growth?
Does Rwanda's impressive growth tell the whole story? (Credit: CIAT, Flickr Creative Commons)
Over the last few years, a lot of optimism has been built around Rwanda being the next big thing in Africa. I guess one reason for this optimism is Rwanda’s impressive list of business friendly reforms and its equally impressive growth performance. Between 2006 and 2011, per capita income in Rwanda grew at an average rate of 5.1 percent per annum, fifth highest in Sub-Saharan Africa (SSA) region and much better than the regional average rate of 2.4 percent. Moreover, Rwanda currently ranks third in the region in the quality of the business environment as measured by the World Bank Group’s Ease of Doing Business index. So, is Rwanda really the next big thing in Africa?
Business reforms can spur economic dynamism in the East African Community
East Africa is famous for its breathtaking landscapes and its unique concentration of wild animals. Could it also become as famous for its dynamic economic development?
In 2009 I came to Tanzania to work on tax harmonization in the East African Community (EAC). The Common Market Protocol was about to be signed and one of the biggest goals was to tap into the economic potential of the region by facilitating (cross-border) trade and improving the business climate. A year later, the five Partner States of the East African Community ratified the Common Market Protocol in order to realize “accelerated economic growth and development through the attainment of the free movement of goods, persons, labor, the rights of establishment and residence and the free movement of services and capital”. The overarching goal of the East African Community is to achieve sustainable economic growth in order to increase employment and reduce poverty.
As the Carnival in Brazil kicked off last weekend, Brazilians were ready for a party. They have reasons to celebrate. Despite a lackluster GDP performance in the last two years, unemployment rates remain at record low levels.