The Network Effect: How Enterprise Support Organizations are Coming Together to Help Youth-Led Businesses Survive COVID-19
Editor’s note: This article is part of NextBillion’s series “Enterprise in the Time of Coronavirus,” which explores how the business and development sectors are responding to the pandemic. For news updates and analysis, virtual events, and links to useful resources related to the COVID-19 crisis, check out our coronavirus resource page.
The economic fallout of COVID-19 has been unprecedented, taking a particularly devastating toll on micro, small and medium enterprises. These businesses are key drivers of economies around the world, creating jobs and supporting the livelihoods of families and communities. While many have closed, others are only just surviving.
Some small businesses are more vulnerable than others, and youth-led enterprises face unique challenges. They are more likely to be informal, and so unable to access government support. They’re likely to operate in sectors and industries that have been worst hit by the crisis, such as retail and hospitality. Young entrepreneurs often face additional barriers to accessing finance, and have more limited support networks. They also tend to lack experience in navigating difficult business and supply chain conditions.
But along with these challenges, the current crisis also presents opportunities for small businesses. These include the acceleration of digitalisation, which is opening up access to information, support and services. More broadly, the crisis is spurring innovation at a pace and scale that wasn’t feasible prior to the pandemic.
The power of a youth-focused enterprise support network
Supporting youth-led, micro and small enterprises is Youth Business International (YBI)’s mission. Over the past 20 years we have built a global network of independent enterprise- support organisations operating in over 50 countries. Every year, our network members support over 90,000 young people in developing the skills they need to start, grow and sustain a business. The strength and reach of our network means that we were well-positioned to rapidly adapt our services and support when the crisis hit.
Our long-term relationships with the member organisations in our network mean we can regularly gather insight into local needs and challenges, drawing on this expertise to identify network priorities and design bespoke solutions. Responding in this highly localised way and at scale has only been possible due to the investment we have made in the network’s digital and innovation capabilities over recent years, in partnership with Accenture. As a global non-profit such strategic and programmatic funding partnerships support our network wide activities and impact, supplemented by consulting work and in future a membership fee from participating organisations.
The foundation we’ve built has enabled us to develop three key areas of support in response to the current crisis.
Immediate financial support for young entrepreneurs
As the crisis hit across the countries where we operate, it was clear that the underserved young entrepreneurs our members support needed immediate financial assistance to ensure their businesses’ survival. In many countries, government support packages are not adequately addressing the specific needs of smaller businesses, which is driving young entrepreneurs to look elsewhere.
Across the network, our members have responded with a range of measures, from providing emergency grants and lowering interest rates, to offering loan repayment breaks and directing young entrepreneurs to government support where available. They have been quick to move their services online, and many have established new crisis helplines. This support has enabled entrepreneurs to cover salaries, ongoing expenses and supplier debts – avoiding a negative ripple effect in their communities. It has also given them the breathing space to think about next steps.
Business adaptation during COVID-19
However, financial support alone is insufficient. For many of the underserved young entrepreneurs that our members support, guidance on adapting their businesses is also a critical priority. They need support to identify new market opportunities and to pivot accordingly, and to connect with distribution and supply chains. For example, YBI’s member in Nigeria, Fate Foundation, is connecting small businesses that are producing face masks with public institutions where these masks are in high demand.
We have also adapted our mentoring service to offer “SOS Mentoring.” This global initiative is mobilising our network of 15,000 volunteer business mentors around the world to provide personalised guidance to thousands of struggling young entrepreneurs. Mentors receive online training and tools so they can work with young entrepreneurs to assess their businesses, then to develop and implement action plans. Mentors provide ongoing practical and emotional support over a period of three months.
We are also moving our new global soft skills training for young entrepreneurs online. Our Growth and Performance Skills curriculum focuses on the soft skills young entrepreneurs need to navigate today’s crisis, complementing existing training in business skills offered by our members. The pilot program for this new curriculum includes 80 young entrepreneurs from 10 countries. Now more than ever, soft skills such as adaptive planning, negotiation and decision making are critical tools for enabling entrepreneurs to withstand the immediate crisis, prepare for recovery and manage future shocks.
Digitalisation as a response to COVID-19
Finally, the crisis has placed a spotlight on both digital skills and the digital divide. We have found that young entrepreneurs need support to move their operations online and/or digitalize their products and services. Similarly, many of the organisations in our network were entirely focused on in-person support, and had to quickly adapt their services to an online delivery model and acquire the tools and skills to reach young entrepreneurs virtually.
In response, we have scaled up our ongoing work to build the digital capabilities of our members through a series of online learning labs and virtual workshops. Through our new commitment with Google.org, we are providing young entrepreneurs with targeted support to move their services online. Across the network, our members are exploring innovative approaches to identifying new business solutions to current challenges – such as through online hackathons in Turkey and Algeria.
The COVID-19 crisis has also exposed the challenges many young entrepreneurs face in getting online in the first place – from poor connectivity to limited access to smart phones. While addressing this in the long-term means tackling systemic barriers, in the short-term we have focused on opening up digital access through measures such as using lower-tech SMS solutions and more traditional media channels to reach young entrepreneurs in remote locations.
The current crisis is forcing not just our members and the underserved young entrepreneurs they support to become even more entrepreneurial, it’s also sparking similar changes in our network, as we reassess and rapidly adapt our support and services.
In a recent survey, our members reported recovery planning and ongoing service innovation as key priorities moving forward. We will work with them as they move from a focus on immediate crisis response, to efforts aimed at longer-term recovery and building the resilience of young entrepreneurs and the broader ecosystem supporting them. This includes ensuring that the most vulnerable young entrepreneurs are not left behind.
There is growing recognition that governments, large companies and civil society share the same goal of supporting small, youth-led businesses. We see real potential in joining forces and combining resources to address the systemic challenges and barriers facing these young entrepreneurs. At YBI we are committed to leveraging our network to drive this agenda forward. We welcome you to follow our progress on Twitter, LinkedIn and Facebook.
Photo credit: Youth Business International