Mendoza Emprende Enhancing Youth Entrepreneurship in Argentina by leveraging its Diaspora

Transcription

1 Emprende Enhancing Youth Entrepreneurship in Argentina by leveraging its Diaspora At the beginning of 2008, the World Bank partnered with two Argentine NGOs to implement Emprende, an innovative pilot program for the development of youth entrepreneurship that capitalizes on the knowledge and experience of highly-skilled Argentine professionals residing abroad. The program was implemented in the province of between May and December of This briefing describes the program s characteristics, how it was implemented, and its outcomes. An innovative way of training youth Youth are often cited as one of the most vulnerable groups of the population in countries around the world. Argentina is not an exception: the youth unemployment rate is three times as large as the aggregate unemployment rate. In the specific case of the province of, one in every four young individuals is unemployed, and only one in every ten young individuals has some tertiary education. Strengthening young mendocinos skills is therefore crucial to ensure their successful participation in the economy. The development of entrepreneurial skills is particularly in perspective important, not only because entrepreneurship goes hand in hand with innovation and productivity, but also because a significant proportion of workers in are selfemployed. In this context, Emprende was conceived as an entrepreneurship youth training program utilizing both conventional methods such as one-size-fits-all workshops and seminars, as well as a more innovative approach: personalized mentoring by Argentine professionals residing abroad. Mentoring from Diaspora members distinguishes this initiative from any other entrepreneurship training initiative that has been implemented in Argentina, and it likely contributed to the success of Emprende. Project design and implementation Emprende was structured as a three-stage youth entrepreneurship training program. Per capita GDP* Youth Popn. Youth Unemployment Youth with at least some Tertiary education Argentina US$9, million 24 percent 53 percent US$8, , percent Self-Employed 24 percent 27 percent 11 percent During the first stage, teams of individuals between ages 18 and 35 who had a business idea participated in seminars and workshops that trained them on how to prepare a business plan, a financial and economic plan, a logistics and commercial strategy, and a marketing strategy, among other entrepreneurial skills. *At 2000 constant prices Sources: INDEC, Dirección de Estadísticas e Investigaciones Económicas de and World Development Indicators

2 During the second stage, personalized mentoring was provided to help teams turn their ideas into attractive business plans, while at the same time expanding their professional network. Each of the teams selected to participate in this stage was matched to a local and a Diaspora mentor. By the end of the second stage, each team presented its business plan, and some were selected to move on to the third stage. The third stage consisted of a business plan competition in which selected teams presented their business plan to an expert panel. This panel included experienced entrepreneurs, Diaspora members, local investors, university professors, government officials from the national and provincial levels, and representatives of the World Bank, Endeavor Argentina and ECODAR (the organizers). The teams that won the competition received additional support to set up their businesses, including consulting services from prestigious legal, human resources, marketing and accounting firms in. Also, IAE-Universidad Austral awarded the winning teams a free entry to participate in the semifinals of the NAVES Competition, the most prestigious national business plan competition in Argentina. Project design Phase 1 (Aug 2008) Phase 2 (Sept-Nov) Phase 3 (Dec) General training Personalized mentoring (Diaspora and local) Business Plan Competition 155 participants, 60 teams 56 participants, 22 teams 19 participants, 7 teams Emprende provided general training on entrepreneurship skills to 155 participants grouped in 60 teams. Of those, roughly a third (56 participants in 22 teams) received further training and mentoring from local and Diaspora professionals. Again, about a third of these trainees (19 participants in 7 teams) were selected to present their business plans to the expert panel. Following the business plan competition, 3 teams were awarded additional support to set up their business. Selection of teams from one stage to the next was mainly based on the quality of their business proposal (from the first to the second stage) or business plan (from the second to the third stage), applying the same criteria that was developed for the prestigious NAVES Competition. Program participation was open to teams of no fewer than two and no more than five individuals between 18 and 35 years old and residing in the province of. The average age among participants was 25 years, and teams came from all over, including departments that were over 300km away from the City of. The majority of participants (94 percent) had at least some tertiary education, thus representing a well-educated segment of the youth population in (where, on average, only 11 percent of youth have some tertiary education). Many of those who participated in the program were still finishing their undergraduate degrees. This explains why a substantial proportion of participants (44 percent) had no work experience at all. Mentors, both Diaspora and local ones, constituted a highly-educated group, with a vast majority of them holding an MBA degree, or a masters or doctoral degree in another discipline. All mentors had at least 5 years of work experience and some of them had more than 15 years; on average, they had 9 years of work experience. Diaspora mentors were recruited from the network of Argentine professionals residing in the United States and the United Kingdom, while local mentors were recruited from several departments in the province of. Some mentors provided technical assistance to more than one team. In all cases, mentoring was provided on a pro bono basis. The matching of mentors and participating teams was done carefully to ensure an alignment between mentors area of expertise and interests on one hand and the specific business proposal made by teams on the other. Characteristics of participants and of mentors Participants Diaspora Mentors Local Mentors Total Age Avg: 25 years Min: 18 Max: 33 Avg: 34 years Min: 30 Max: 45 Avg: 34 years Min: 30 Max: 50 Gender 21% female 12.5% female 6% female 79% male 87.5% male 94% male 2% MBA degree 12.5% PhD or Candidate 75% MBA degree Education 58% university degree 5 MBA degree 25% university degree (maximum 4% other tertiary degree 25% other masters degree level attained) 3 incomplete univ. 6% high school degree 12.5% university degree 56% had previous work 10 had at least 5 years 10 had at least 5 years Work experience of work experience of work experience experience Avg: 9 years Avg: 8 years 11 (from a total of 18) United States (California, 7 departments of the departments of the New York, Florida, province of, Place of province of, Maryland, DC, Vermont, including the City of residence including the City of New Jersey) and England (London) No restrictions were made regarding the type of business proposal that could be presented, but innovation was encouraged all along the way. The proposals presented covered a variety of economic sectors, including services, industry, consumer goods, technology, retail, energy and agribusiness. Many proposals reflected an awareness of

3 environmental issues, with specific examples including proposals to create a sustainable traffic lights technology; to recycle electric and electronic parts; to make plastic wood from discarded plastic, and to produce biodiesel from rapeseed oil. Another significant portion of proposals sought to profit from some of s most well-known comparative advantages, including the wine industry and the tourism sector. Project outcomes Given the competitive nature of Emprende, it did not seem appropriate to choose at random who would progress from one stage to the next. Instead, participants performance in one stage determined their continuation in the program. Resource constraints also prevented the adoption of a rigorous impact evaluation strategy. With this caveat in mind, three pieces of evidence point to the program s success. First, program participation was accompanied by a substantial improvement in entrepreneurial skills, as perceived and reported by participants themselves. Second, there has been widespread interest in replicating and scaling up this experience at the local, national and international levels. Third, the fact that participating teams are still in touch with their Diaspora and local mentors suggests that, indeed, personalized coaching was a successful approach to develop youth entrepreneurial skills. they had adequate knowledge, compared to 48 percent of those who received one-size-fits-all training. Level of information about the context affecting businesses: 93 percent of those who received personalized mentoring felt they had sufficient information, compared to 36 percent of participants who received one-size-fits-all training. Ability to prepare and present a business plan, prepare an economic and financial plan, look for financial resources, apply a commercial strategy, and apply a management strategy: Participants who received personalized coaching from Diaspora and local mentors felt more capable in all of these areas than participants who received the conventional training. >> How knowledgeable do you feel to prepare a Business Plan? % 83% I have adequate knowledge Before receiving any training After Phase 1 After Phase 2 46% 44% 17% I have scarce knowledge 24% 9% I have no knowledge >> How much information do you have about the context that would affect your initiative? % An improvement in entrepreneurial skills, as perceived by participants % 59% Information about participants perceptions of their entrepreneurial capabilities was obtained through identical surveys that were administered at three different stages of Emprende: before any training was provided, after one-size-fits-all workshops were provided (i.e. after the first stage), and after personalized coaching was provided by Diaspora and local mentors (i.e. after the second stage). The results of these surveys show that entrepreneurial knowledge and skills, as perceived by participants themselves, were substantially better among those who received personalized coaching than among those who received conventional one-size-fits-all training. This is true for all the dimensions of knowledge and skills considered, including: Knowledge about Business Plans: 83 percent of participants who received personalized mentoring felt % 29% I have sufficient information 7% I have little information 9% 5% I have no information >> Percent of beneficiaries who feel capable of doing the following taks Present a business plan Look for financial resources Prepare a financial and economic plan Apply a commercial strategy Apply an organizational management strategy 19% 33% 42% 47% 45% 54% 62% 63% 54% 61% 64% 8 93% 93% 97%

4 While self-perception of entrepreneurial capabilities was better among the group that received personalized mentoring than among the group that only participated in one-size-fits-all workshops, those who only participated in the first stage of the program did have a better perception of their entrepreneurial capabilities than they did before receiving any kind of training. Emprende enabled us to improve our management practices, by opening our team to experts on human resources and business administration. We were able to define our pricing strategy and learned the importance of investing on training. Our marketing has also improved: we improved our branding, clearly defined the products we offer, and better targeted our clients. We feel empowered and have higher expectations for our firm to expand to the national and international markets. And we have more clients, even in a difficult year. (PIEMSA team, winner of Business Plan Competition) Widespread interest in replicating and scaling- up the initiative Several organizations at the local, national and international levels have expressed and interest in scalingup this initiative. At the provincial level: The Government of the Province of has committed to provide financial support for the 2009 edition of Emprende, with potentially more resources than the ones provided by the World Bank for Emprende. Universidad Nacional de Cuyo (a national public university located in ) has created a Center for Entrepreneurship to respond to the interest in entrepreneurship training showed by youth during Emprende, and will also support a new version of Emprende in At the national level: The National Government of Argentina, through the National Agency for Investment Promotion (Agencia Nacional para el Desarrollo de Inversiones), supported the initiative, participated in the final Business Plan Competition held in December 2009, and has expressed interest in supporting a nationwide version of this initiative. More than three regional universities in Argentina have expressed interest in replicating the initiative. Other multilateral organizations have expressed interest in supporting a continuation and scaling-up of this program in and in other Argentine provinces. At the international level: Chile Global Chile s Diaspora organization- has expressed interest in replicating this model in Chile with a focus on youth and possibly partnering with Argentine provinces like. Scale-ups should be accompanied by an adequate impact evaluation strategy, to ensure the efficient use of resources. Mentoring relationships beyond the program Several teams have continued to contact their Diaspora and local mentors, and have repeatedly expressed the importance of their mentors in helping them expand their horizons, think creatively, improve their business plan, and stay motivated. Key factors behind a successful implementation Four key factors lie behind the successful implementation of Emprende: working with strong local partners; ensuring effective coordination between them; securing support from local stakeholders, and developing a robust dissemination strategy. Strong local partners Given the characteristics of the program, Endeavor Argentina s extensive experience and know-how in terms of mobilizing and training potential entrepreneurs in Argentina, and ECODAR s network of Argentine professionals residing abroad, proved to be a powerful combination in implementing the program. Endeavor Argentina was responsible for providing general training to participating teams during the first stage of the program, and for recruiting local mentors for the second stage. General training during the first stage included training in a variety of entrepreneurial skills, such as: Producing and presenting a business plan. Preparing a financial and economic plan. Attracting potential investors Designing and applying a commercial strategy. Designing and applying a management strategy.

5 ECODAR (Encuentro de Cooperación Diáspora Argentina) was responsible for recruiting Diaspora mentors, providing them with guidelines to carry out their mentoring responsibilities, and matching them with the teams that participated in the second stage of the program. In addition, a local consultant based in was hired to deal with the logistics of all the events, to disseminate the program, to administer the surveys used to evaluate the initiative s success, and to coordinate relationships with key local institutions that expressed their support for Emprende along the way. Distribution of responsibilities among partner organizations Endeavor Argentina Provision of general training on entrepreneurship skills and recruitment of local mentors Coordination, Supervision & Evaluation World Bank (managing team) Implementation ECODAR Recruitment and matching of Diaspora mentors E ffective coordination between partners T he World Bank team that presented the proposal for this program was responsible for quality control, overseeing the timely implementation of activities, coordinating the work of all the actors responsible for implementation, planning and monitoring budget execution, and assessing and disseminating the program s results. Coordination between local partners was achieved through frequent communication with them. The existence of a solid (and formal) agreement about each organization s responsibilities before project implementation also helped to ensure that all activities were completed as planned. Similarly, reaching consensus with partner organizations on the program s objectives and on the use of resources was crucial to ensure a smooth execution of the project. L ocal stakeholders support Emprende was supported by from both the private and public sectors: World Bank (local consultant) Program dissemination, administration of surveys, general logistics, and coordination with local supporting institutions several institutions Six firms donated consulting services and training for the winning teams, to support them in marketing, quality control, human resources, professional development, networking, international trade, accounting and finance. A national university awarded the winning teams a free entry to participate in the semifinals of the most prestigious national business plan competition in Argentina. The provincial Ministry of Social Development, the provincial Ministry of Production and the National Agency for the Promotion of Investments endorsed the initiative at various stages of its implementation and they were present at the final competition. Robust dissemination strategy The dissemination strategy played a key role in terms of attracting participants, recruiting local and Diaspora mentors, and obtaining support from local stakeholders. The program s existence was disseminated through: Presentations in eight universities in. Articles in five newspapers and three magazines. s to the distribution lists of several institutions that promote entrepreneurship at the national level and to the directories of local universities. Billboards, flyers and brochures distributed in eleven departments of the province of, including their municipalities and local universities. Presentation in two radio shows. Lessons about design, implementation and evaluation The existence of strong local partners is crucial for the successful implementation of this type of initiatives. Regular and frequent communication with partners is necessary to oversee that activities are being completed as planned. The existence of strong local partners does not ensure timely completion of activities. A strategy to evaluate the impact of the program should be established since the very beginning, during the design of the program. Reaching consensus on the program s objectives with partner organizations is extremely important to avoid misunderstandings and ensure a smooth execution of the project. This is especially important when working with two or more local partners that may have conflicting views or interests in some areas. Reaching consensus on the use of budget resources is just as important as reaching consensus on the program s objectives.

6 Emprende s Core Team Agustina Paglayan (co-task Team Leader), World Bank Mariano Lafuente (co-task Team Leader), World Bank Yevgeny Kuznetsov (senior advisor), World Bank Esperanza Lasagabaster (senior advisor), World Bank Diego González (local consultant), World Bank Alejandro Mashad (Endeavor Argentina) Celia Alfie (Endeavor Argentina) Emilio Bunge (ECODAR) Nahuel Velázquez (ECODAR) Partner Organizations Other organizations that supported Emprende in 2008 This note is intended to summarize lessons learned and key policy findings on Emprende 2008, a pilot program supported by the World Bank. The views expressed here are those of the authors and do not necessarily reflect the views of the World Bank. For additional copies, please contact the authors. Principal Authors: Agustina Paglayan (apaglayan@worldbank.org) and Mariano Lafuente (mlafuente@worldbank.org)