Presented at the July 2012 Meeting of the OECD-MENA Initiative's Working Group on SME Policy, Entrepreneurship and Human Capital Development http://www.oecd.org/mena/investment
New Entrepreneurs and High Growth Entreprises in the MENA Region: Policy Implications
1. NEW ENTREPRENEURS AND HIGH GROWTH
ENTERPRISES IN THE MENA REGION
CONCLUSIONS AND POLICY IMPLICATIONS
Antonio Fanelli
OECD – Private Sector Development Division
Rome, 17 July, 2012
2. Research questions and conclusions
Where do MENA economies stand in terms of
high performance enterprises vis-à-vis
developed and other emerging economies?
While the number of enterprises in MENA is
lower than in other emerging markets, the share
of high potential enterprises is comparable.
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3. Research questions and conclusions
What obstacles prevent high potential
enterprises in MENA from becoming high
performance?
A inefficient and non-transparent regulatory
environment, corruption, a lack of external
finance, and a shortage of skilled staff.
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4. Research questions and conclusions
Is there evidence of an incoming new generation
of entrepreneurs?
A new generation is indeed emerging. Work
experience and high education are critical for
success. The gender gap persists but appears to
be narrowing. Further analysis is required.
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5. Research questions and conclusions
Is the business environment conducive to high
performance firms? What can public policy do to
promote high performance firms and what are
MENA governments doing in this regard?
The transition from high potential to high
growth is affected by inefficient and nontransparent regulatory environment, a lack of
external finance, a shortage of skilled staff, and
distorting competition of incumbents.
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6. Policy implications
Two sets of broad policy recommendations emerge from the
report:
1) Improvement of the business environment for all
enterprises.
Objectives: To increase the pool of formal enterprises and
develop a level playing field.
2) Measures targeted to high-growth enterprises.
Objectives: To facilitate the transition from high potential
to high growth and improve growth performance.
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7. Businesses environment - 1
Five priority areas:
1. Regulatory policy and regulatory simplification
in order to lower the administrative burden and
to increase competition;
2. Increase competition and diversification in the
banking and financial sectors;
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8. Businesses environment - 2
3. Increase women’s participation in the labour
market and in enterprise creation;
4. Legal and judiciary reform to improve contract
enforcement;
5. Human capital development to improve skills
and promote an entrepreneurial culture.
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9. High-growth enterprises - 1
Access to finance:
• External equity financing, either provided
by business angels, seed funds, venture
capital or equity funds;
• Stimulation of the eco-system for equity
financing;
• Introduction of credit guarantee facilities
for enterprises whose main assets are
intangible.
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10. High-growth enterprises - 2
Skills development
• Tailored publicly-funded training schemes;
• Voucher schemes allowing enterprises to select
the trainers or advisors;
• Internship programmes with universities and
vocational institutes;
• Hiring programmes for new graduates
supported by public funds (i.e. Tunisia).
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11. High-growth enterprises - 3
Develop linkages programmes:
• Connect high potential SMEs with large
companies and multinationals;
• Target the advanced business services sector
(ITC, consultancy and accounting services, etc),
relatively under-developed in the MENA region;
• Help SMEs in learning how to work with large
companies and multinationals and in adopting
quality standards.
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12. High-growth enterprises - 4
Three additional horizontal areas:
•Introduce an active gender policy to reduce the
gender gap;
•Ensure the provision of reliable and low cost
public services (enterprise/industrial locations,
power supply , ITC services, etc);
•Remove obstacles to business entry and
expansion through sectorial reviews of the
competitive and regulatory environment.
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13. Final policy implications
There is no magic formula leading to an
increase in the number of high growth
enterprises;
Policy experience is built through piloting,
testing and careful evaluation;
Experimenting could offer new insights and
open new perspectives;
The current context provides an opportunity for
moving towards a more inclusive and evidence
based policymaking.
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