Introduction and Background
Start-Up SME Centres (SSC) Ghana Ltd facilitates Capacity and Capital for Farmers, Cooperatives, Start-Ups and SMEs in Agribusiness, Manufacturing, Technology, Services, Green Economy, Landscapes, Forests, Sustainability and Climate Impacts.
Start-Ups and SMEs are very much interrelated. It is Start-Ups that end up being SMEs, and all SMEs begin as Start-Ups, going through early stage to growth trajectory to become SMEs/or Big Companies. 80 % of Ghana’s economy is the informal sector (GSS, 2017). This is the sector in which SMEs are found. SMEs in Ghana have been noted to provide about 85% of manufacturing employment of Ghana. They are also believed to contribute about 70% to Ghana’s GDP. They represent about 80% of the private sector and account for about 92% of businesses in Ghana (Abor & Quartey2010; Abor & Biekpe ,2006). In view of the fact that SMEs make up a big proportion of the firms in Ghana, they play an important role in the growth of the economy. Notwithstanding the recognition of the important roles SMEs play in Ghana, their development is largely constrained by a number of factors, such as lack of access to appropriate technology; limited access to international markets, the existence of laws, regulations and rules that impede the development of the sector; weak institutional capacity, lack of management skills and training, and most importantly finance. (Abor& Quartey,2010). In view of the fact that SMEs make up a big proportion of the firms in Ghana, they play an important role in the growth of the economy.
Challenges of Start-Ups and SMEs
Notwithstanding the recognition of the important roles Farmers, Cooperatives, SMEs play in Ghana, their development is therefore largely constrained by a number of factors, such as lack of access to appropriate technology; limited access to international markets, the existence of laws, regulations and rules that impede the development of the sector; weak institutional capacity, lack of management skills and training, and most importantly finance (Abor & Quartey, 2010). Start-Up SME Centres (SSC) has therefore been set up as Private sector Intervention to fill the Capacity and Capital gaps that face our Start-Ups and SMEs and do not enable them fulfill their full potentials.
Farmers, Cooperatives, SMEs are woefully neglected and undeveloped in spite of their real and potential contribution to alleviating poverty, creating jobs, livelihoods, incomes and decent work for many. The several government interventions for developing the sector did not yield the required results because they were shrouded in government and civil service bureaucracies, in view of their insistence to run and manage such programmes, in spite of the fact that their statutory Mandate and civil service training do not include the running of business. In view of that they run these SME focused programmes like civil service with all the red tapes, bureaucracies, and delays, which are unfriendly to business culture. In view of this, SMEs do not patronize these services, if in fact they even know about them, and the huge monies repeatedly invested by Development Partners go down the drain.
Importance of Capacity for Start-Ups and SMEs
In spite of the numerous efforts and programmes for SME Growth over the years, there has not been significant improvement of the sector for lack of a strategic outlook to those development and growth choices i.e. Capacity. An important element is capacity of SMEs for strategic growth. SMEs currently lack the required capacity to operate as productive, profitable and sustainable businesses. Capacity is about Competence, aptitude, proficiency, know-how, expertise and abilities that enable one to undertake what it should do in order to achieve set results. Capacity therefore brings performance and results. Capacity has certain elements and factors which characterise or indicate it.Capacity is a factor of Knowledge, Entrepreneurial Calibre, Skill, Technology, Innovation and Finance. These capacity factors are necessary for growth either from micro to small to medium then to large. Strategic growth capacity factors need to be transferred to SMEs if they will survive and grow into productive, profitable and sustainable businesses.A key Factor for capacity of SMEs which justifies a project on Start-Up and SMEs Centre (SSC) business Model is Capacity Transfer. Capacity Transfer therefore is the transfer of the Competence, aptitude, proficiency, know-how, expertise and abilities of one entity to another so that the receiving entity can also undertake what it should do to perform in order to achieve set results. This overarching need for Capacity Transfer in the Start-Ups and SMEs sector provide a business case for the ABI/SSC Business Model. This is the ABI/SSC niche. It makes its productivity, profitability and sustainability through the provision and transfer of vitally needed capacity in the Start-ups and SMEs Sector. Usually we talk of technology transfer, but that is limiting because technology is only one of the capacity factors. Capacity transfer therefore is more encompassing and comprehensive. It is the transference of the capacity elements/factors of Knowledge, Entrepreneurial Calibre, Skill, Technology, Innovation, and Finance from the giving entity to the receiving entity. This is why ABI/SSC is in Business. But Business is done with a comprehensive outlook; not following narrow perspectives to profits which does not take, human, societal, and environmental and the future into consideration. This need to demonstrate this comprehensive business approach as required by local needs and all International standards applicable in local societies with Multistakeholder perspective is the justification of this project.
Problem and Justification for Start-Up SME Centres (SSC) Ghana Ltd
Among the Youth of Ghana are some of the top ICT brains in the world but which are wasting because of neglect due to lack of Institutional Framework to deliberately identify the potentials of our human capital and develop them into National assets which have significant contribution to the Economy. But this is what has propelled progress in developed and emerging Countries. Whilst there is the dearth of Job Solutions in Ghana however, several youth have hatched innovative ideas , invented technologies, products and services which are badly needed to meet growing needs in Smart Technologies and ICT, food security and agriculture, health, water systems, renewable energy, waste recycling, waste to energy, adaptation to climate, affordable housing and rural enterprises, but these do not go beyond the stage of discovery into enterprises which are productive, profitable and sustainable, meeting the numerous needs that are in the community.
Wasting and Neglected Innovations and Inventions
Several innovations and inventions therefore do not end up being enterprises, leading to killing off creativity, ideas shelved, or prototype products shelved, discarded or stolen by more wealthier and powerful people and organizations. Over the years, several innovations have been created by youth, are show cased in exhibitions, some awarded, but are not assisted to become start-ups, developed nor incubated to take off as invention enterprises. Many inventors and makers are thus not inspired, motivated, educated nor incubated to develop their products and potentials. There are no systematic innovation and invention inspiration, education and development ecosystem. Start-Ups face a stiffer challenge of finance. In view of the fact that the businesses are new, owned usually by youth, and laden with risks, they find it difficult to attract financing from existing financial mechanisms. The lack of a Venture capital and angel investing mechanisms therefore is a pity for start-Ups since government has failed to address this in a comprehensive manner; the existing government interventions to Start-Ups financing is piecemeal and inadequate, uncoordinated and scattered in various bureaucracies unknown to those who need it, and fraught with wastage, ineffectiveness and leaving the sector further financially weakened. Meanwhile there is big money looking to invest in small businesses but unable to find the means mechanisms and necessary conditions and Institutional Framework to do this (ITC, 2019, Big Money for Small business).
Needs of Farmers, Cooperatives, Start-Ups and SMEs
Farmers, Cooperatives, Start-Ups and SMEs face the challenge of setting up and developing their businesses into productive, profitable and sustainable businesses (Lester, David, 2014); therefore they need entrepreneurship and business development services. They lack capital and therefore need inclusive financial facilitation and intermediation to make investment capital accessible to them. The journey of growing to become a stable business to stand the test of time can be lonely without a lot of support along the way therefore they need business solidarity. It is for these reasons that Start-Up and SME Centres (SSC) provide Start-Ups and SMEs entrepreneurship and business development Services, Inclusive financial facilitation and intermediation and Business solidarity opportunities to make them productive, profitable and sustainable. This fits with SDGs such as Goal 8 on decent employment opportunities through development of entrepreneurship and SMEs.
Purpose of Start-Up SME Centres (SSC)
The Purpose of this is to promote business Productivity, Profitability and Sustainability using model that meets the Sustainable Development Goals (SDGs) overarching focus of ‘leaving no one behind’ by the use of comprehensive business model which is inclusive of all partners and multistakeholders in local society, by multiplying business opportunities, developing societal good and positive values and sustaining the use and efficiencies of natural resources and Environment with future generations in mind. In this project, it is possible to achieve productivity, profitability, sustainable human and societal development and protection of our environment in an equitable, inclusive and just manner, thereby fulfilling global standard business best practices in Responsible business conduct (RBC). This is possible because the Start-Up and SME Centres (SSC) Business model encompasses these complementary and reinforcing elements in one system, with flexibilities, responsiveness and adaptation to the emerging and changing business needs and contexts.
- Productivity, Profitability and Sustainability of Farmers, Cooperatives, Start-Ups and SMEs
- Farmers, Cooperatives, Start-Ups and SMEs Investor Readiness
- Accessibility of Investment Capital to Farmers, Cooperatives, Start-Ups and SMEs
- Integration of Farmers, Cooperatives, Start-Ups SMEs in Trade and Export Value Chains
- Favourable Policy, Legal and regulatory environment for Farmers, Cooperatives, Start-Ups and SMEs to thrive
Intervention Strategies and Activities
It is proposed to implement this programme within the Framework of Start-Up SME Centres (SSC) Ghana Ltd which will link up and coordinate other players into partnership, in view of its innovations and dynamism with the sector. SSC is a bottom-up Network of 50 Incubation, Accelerator, Capacity and Capital facilitation centres set up in all 16 regions of Ghana, also serving as ‘Local Financial intermediary’ and ‘investment facilitator’ (ITC, 2019, Big Money for Small business) for Start-Ups and SMEs to link up with Investors; ‘Local financial intermediaries – what the report calls ‘investment facilitators’ – are critical connectors between global finance and developing country SMEs (ITC, 2019, p. 2, Big Money for Small business).
Strengthening Start-Up SME Centres (SSC) Ghana Ltd and other Local Intermediaries
Start-Up SME Centres (SSC) Ghana Ltd and other local intermediaries will be strengthened, through training for staff, systems development and provision of electronic Platforms( including data base of start-ups, SMEs and Investors-electronic market place), to enhance and support the 50 Physical Face-to-Face Centres which are accessible at the grassroots level. This is because ‘The stronger those facilitators are, the easier it is for foreign investors to assess the risks and opportunities of investing in local SMEs. This will not come as a surprise to finance specialists in the development community, who have long lamented the weakness of financial systems in the developing world’ (ITC, 2019, p. 2, Big Money for Small business); Therefore ‘Investing in strengthening investment facilitators like accelerators, investment promotion agencies or local financial institutions would have major multiplier effects’ (ITC, 2019, p. 2, Big Money for Small business).
Capacity Strengthening for Farmers, Cooperatives, Start-Ups and SMEs
Productivity, Profitability and Sustainability of Farmers, Cooperatives, Start-Ups and SMEs, Start-Ups and SMEs Investor Readiness and Integration of Start-Ups SMEs in Trade and Export Value Chain will be achieved through Capacity Strengthening of Start-Ups and SMEs in the form of the knowledge, resources, information, skills that entrepreneurs need to run their businesses, through training, coaching, mentoring and role modeling on entrepreneurship, business development, financial management, basic records keeping, filings of paper work with government, risks identification and management and support to develop business plans.
Special attention will be paid to the particular area of risk rating and management; for ‘to produce competitive returns, these financial intermediaries rely on accurate performance assessments of their SMEs. Providing high-quality credit information, through increased coverage of public registries for example, can help improve the efficiency of local financial institutions, encouraging more funds to invest in SMEs; New technologies, such as block chain technology, can play an important role’ (ITC, 2019, p. 7, Big Money for Small business).
SSC Knowledge and Capacity partner Institute of Certified Management Consultants (ICMC) Ghana (which doubles up as Business Development Service Providers Association of Ghana) will be pivotal to Start-Up and SME Capacity building.
Facilitation of Global Investment Capital to Farmers, Cooperatives, Start-Ups and SMEs
Facilitation of Investment Capital through identification of Farmers, Cooperatives, Start-Up and SME friendly Local Investment Funds and set up of specialised SME Investment Fund to channel Global Investment Capital will enhance accessibility of Global Investment Capital for Start-Ups and SMEs. This is important as ‘These local financial institutions have the ability to bundle thousands of small loans into larger sums, building a portfolio of sufficient size to entice large institutional investors ‘(ITC, 2019, p. 6, Big Money for Small business).
Linkage to Trade and Export Value Chains and Finance
Linkage to Trade and Export Finance will be achieved through Integration of Farmers, Cooperatives, Start-Ups SMEs in Trade and Export Value Chains. This is because ‘these enterprises generate more and better jobs when they can access new investments and build trade capacity and skills, and are empowered to become more competitive and connect to international markets’(ITC 2018).
Comprehensive Business Sustainability and Commitment to Responsible Business Conduct (RBC)
A unique feature of the SSC Model for its clients is taking a comprehensive look to sustainability of business practices.The SSCComprehensive business sustainability Concept is that the Economic, Social and Environmental aspects of any Business are equally important and should be conceptually and practically handled as such. We need to have the freedom to make money, but also respect and treat people and our environment with dignity all at the same time. Environmental and social considerations should not be an afterthought to a business concept such as done in Corporate Social Responsibility (CSR), but in a social economy approach these should be elements in the very design of the Business strategy and Model. In fact a business model in all acceptable manner and modern paradigmatic fashion should have at least 3 pillars (3S of a Business) that the business is built, on an equal footing: Survivability, Sociability and Sustainability of business. SSC business Strategy and Model should thus be comprehensive and complete, looking at all three areas as equally important. It is possible to have a business on these 3 Footings therefore as its foundation
Policy Research and Advocacy
Policy Research and Advocacy will enhance Favourable Policy, Legal and regulatory environment for Start-Ups to thrive. This will be done by undertaking policy research on the conditions, importance and effects of Farmers, Cooperatives, Start-Ups and SMEs and using that to rally around Multistakeholders such as Public Institutions, Private Sector, CSOs, Knowledge Institutions, Think-Tanks and Development Partners to enhance visibility for the conditions of Start-Ups and SMEs and the need for transformative change. Events that will be captured in the media, including video and TV series on Start-Ups and SMEs will be vital for this. Sustained evidence based advocacy for policy changes is the only sure hope for meaningful and transformative change for Farmers, Cooperatives, start-Ups and SMEs in Ghana.
- Productive and Profitable
At the core of all these is corporate capacity; The Capacity of the Company to be productive, profitable, sociable and sustainable within and outside the company. And this Model should reflect in the business design, as a deliberate business strategy. If such a comprehensive and complete approach to business is taken, CSR becomes superfluous because it is in fact already taken care of in the business design so may not be added on as an afterthought. In practical terms this means having economic, social and environmental impact with our business and our client Start-Ups and SMEs from the scratch. It means doing our best to be concurrently productive, profitable, treating people and our environment equitably and fairly with respect to dignity, welfare and rights. This involves how we safeguard company survival, treat people in and out of the business with equality, equity and fairness, and protect our planet and solar system as a true global village, in which what we do in our company affects all other members of the globe directly or indirectly; thus giving meaning to real globalization of competition but also cooperation irrespective of people’s location and social characteristics.
This means that our Company and its clientele should be effective with their economic and financial results but also efficient in the use of resources, and take good care of the people in the company in terms of fair and equitable compensation, working conditions, health and safety standards; treat people outside the company-Clients and customers with priority, with maximum satisfaction, consumer rights protection, health and safety in mind; and the people in the immediate community, Nation and the World in mind in terms of their stake in company activities, outcomes, negative and positive social and environmental impacts of business; In particular disaggregating company impacts on the different types of people and their special needs in and outside of the business, such as gender, age, geographical and vulnerability criteria.
This Model therefore also affects areas of business that we can have the comprehensive impact as much as possible, such as Food, Energy and Technology sectors or a combination of sectors in a comprehensive manner as indicated in the mix of entrepreneurship modules of SSC. For example Farmers, Cooperatives, Start-up and SME business focusing on food and aquaculture production, processing and marketing locally and internationally and meeting International certification, premium markets and global standards including ISO if possible, integrating clean energy production and use in our facilities as applicable in Ghana, with relevant international partnerships and the additional Technological transfers and best practices adaptation in the Firm and the Country; claiming carbon credits and fighting for compensation for environmental services provided by out growers and small holders associated. These fit with SDGs such as goal 9, 12-15 on sustainable production and consumption patterns, protection of environment and climate change mitigation and adaptation. Institute of Certified Management Consultants (ICMC) Ghana, a subsidiary of NGAMANG Group, co-owner of ABI/SSC has developed Social Impact Management Framework, Environmental Impact Management Framework and Vulnerability Outline (Evaluation of Ghana’s Implementation of Sustainable Development Goals,2016-PFD-EU-GIZ). These Tools facilitate assessment, Implementation, Monitoring Evaluation, Management and Reporting of Social and Environmental impacts of Projects and activities or business and organizations. These Tools conform to standards set out by European Investment Bank (EIB) and others in International best practice, and will be used to improve social and environmental management of the projects and its Multistakeholders and participants
Outputs, Outcomes and Impacts 2019-2028
1. Productivity, Profitability and Sustainability of 1000 Farmers, Cooperatives, Start-Ups and SMEs
2. 1000 Farmers, Cooperatives, Start-Ups and SMEs Investor Readiness
3. Accessibility of Investment Capital to 1000 Farmers, Cooperatives, Start-Ups and SMEs
4. Integration of 1000 Farmers, Cooperatives, Start-Ups SMEs in Trade and Export Value Chains
5. Favourable Policy, Legal and regulatory environment and Enhanced Investment Climate for Farmers, Cooperatives, Start-Ups and SMEs to thrive.
6. Improved employment and jobs, increased incomes, reduced poverty, invigorated and galvanized local and national economy and increased achievement of SDG goal 8, 10 and overall ,’leaving no one behind’
In conclusion there is the need to focus on Conditioning Measures for Enhanced Investment Climate for Start-Ups and SMEs. This programme will do a lot to contribute its quota to the conditioning measures required to enhance Investor confidence in Farmers, Cooperatives, Start-Ups and SMEs in Ghana, as ‘there is a need to demystify the investment landscape on the continent and centre the discourse on the role of small and medium-sized enterprises (SMEs). SMEs employ the vast majority of any local labour force and have an integral role in any sustainable growth trajectory. At the International Trade Centre (ITC), we often refer to SMEs as ‘the missing link’ for inclusive growth’ (ITC, 2018). In addition ‘Informality is also a problem: investors cannot invest in unregistered firms, which make up a significant share of African SMEs and cannot raise funds through formal channels.’ (ITC 2018) Moreover, ‘good financial records are needed to prove performance claims’ (ITC2018). All the above efforts at formalizing the Farmers, Cooperatives, Start-Ups and SMEs and making them more accessible and integrated into formal systems and global markets will go a long way to condition an enhanced Investment Climate for Farmers, Cooperatives, Start-Ups and SMEs to develop for shared Growth and sustainable economic development in addressing poverty, providing jobs and incomes and invigorating local and National economies to growth paths of no return.