Small business owners like Rosa have embarked on their entrepreneurial journey with a dream of seeking financial stability and independence. But achieving this requires that she overcome a myriad of obstacles. Access to finance is a constant struggle, with traditional banking services often out of reach due to high costs and stringent requirements and have little choice but to seek financial support from her family and friends. Additionally, Rosa grapples with the scarcity of bankable ideas and a lack of training in essential business skills, including an understanding of how technology can help her.
Despite these challenges, Rosa diligently manages her finances. She maintains a bank account, albeit one primarily used for personal transactions, as the high cost of banking discourages separate accounts for business. While recognising the importance of digital financial services for business success, Rosa remains hesitant, echoing the sentiments of many in her community who still prefer cash transactions.
Amidst these hurdles, Rosa’s motivation remains unwavering. Her drive stems from a desire to achieve her entrepreneurial dreams and increase her personal income to provide for her family. With a positive attitude towards entrepreneurship, Rosa envisions growth within her local community, relying on the support of family and friends for financing and advise in running her business.
Navigating the landscape of available support mechanisms poses its own challenges for Rosa. The disconnect between her expectations and the offerings of Business Development Support (BDS) organisations often leaves her feeling adrift. While she acknowledges the usefulness of practical experience gained through incubation programs, she remains unaware of many training and support opportunities that could benefit her business, especially in vital areas like financial planning and digital marketing.
Although Rosa recognises the potential for technology to transform her business, her understanding remains limited. She primarily relies on social media for outreach and engagement but has yet to fully embrace e-commerce for purchases or sales. While aspiring entrepreneurs in her community display a stronger interest in technology adoption, she remains cautious, unsure of how tech can effectively support her enterprise.
Emerging priorities and call to action
The creation of a “super app” to support entrepreneurs like Rosa was just one example of the many ideas that emerged from the Policy Dialogue on Enhancing Pacific Ecosystems for Entrepreneurship and Innovation held in Brisbane from 26 to 27 March 2024. The meeting was a key milestone in the first phase of a two-phase project aimed at identifying the challenges faced by small business owners in the Pacific and designing practical interventions, leveraging digital technology, to strengthen key support organisations and networks to enable small enterprises to thrive in the post-COVID era.
In attendance were around 40 senior development policy makers, financial regulators, development bankers, MSME networks and support organisations, business and technology innovators and development partners from across the Pacific islands. The policy dialogue was organised by Griffith Asia Institute, Asian Development Bank Institute and Foundation for Development Cooperation and with the support of the Konrad Adenauer Stiftung.
Over the course of the 2-day meeting, several emerging priorities were identified where it was believed dedicated interventions, such as the creation of a small business-centric “super app” or digital platform, could lead to strong positive benefits for the region’s small-scale entrepreneurs. These included:
- There’s a clear need to strengthen support networks and mentorship programs for micro, small, and medium enterprises (MSMEs) to foster collaboration and knowledge exchange.
- Efforts should focus on developing bankable and investor-ready business ideas, while also encouraging diversification to enhance resilience.
- Reducing transaction costs for financial institutions and customers is crucial for improving access to finance for MSMEs. This includes exploring collaborative solutions among development banks.
- Business Development Services (BDS) and MSME networks, both formal and informal, need to be strengthened to provide tailored support and be more accessible to small-scale entrepreneurs.
- Promoting sustainability and resilience is essential, with a focus on integrating green business practices and addressing environmental challenge
- Targeted outreach to women, youth, and specific sectors ensures inclusive support, while promoting innovation and locally-led adaptation drives economic growth and job creation.
- Leveraging resources such as digital platforms and community networks can amplify support for MSMEs while standardising training programs and policies ensures quality and effectiveness.
Understanding the needs and aspirations of small business owners
The policy dialogue was a culmination of 3 months of field research in the Federated States of Micronesia, Solomon Islands and Samoa where up to 10 MSME support organisations and up to 200 existing and aspiring entrepreneurs in each country were interviewed for a deep dive into what drives entrepreneurship and to what extent is their local business ecosystem helping them achieve their goals for growth and development. The findings from the survey were presented and discussed at the policy dialogue to underpin consensus building on practical solutions and potential interventions as areas for further stakeholder cooperation. Practitioners shared best practices and programs along various themes including effective support networks, regional approaches, leveraging digital technology and building climate resilient businesses.
The research sheds light on the multifaceted challenges and opportunities facing small-scale entrepreneurs. From financial constraints to technological apprehensions, understanding these dynamics is crucial for crafting effective support mechanisms that can propel entrepreneurial growth and drive economic development in the Pacific. While the concept of a “super app” may be appealing to many, we must also consider how such an app would assist someone like Rosa overcome some of the unique challenges she faces in achieving her business aspirations.
As a next step, the research team is now exploring how a digital platform/app or other pilot interventions can be tested in the field to further identify the most effective solutions that will create opportunities for the growth and success of small-scale entrepreneurs in the Pacific.
Jeff Liew is a Digital Inclusion Specialist at the Foundation for Development Cooperation.
Shawn Hunter is the Industry Fellow and Director, Inclusive Growth Programs at the Griffith Asia Institute, Griffith University.
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