Working Group on SME policy - proposed areas of work for 2015-2016

MENA-OECD Working Group on SME Policy, Entrepreneurship and Human Capital Development

Proposed Areas of Work for 2015-2016: Supporting High-Growth Enterprises in the MENA Region

Global Relations Secretariat, OECD

Paris, 24 September 2014Session 6

Outline of the presentation

1. Rationale: High growth enterprises in the MENA region;

2. Proposed areas of work for 2015-2016: a. Foster high growth SMEs (HGSMEs) in the MENA region;b. Module on promoting access to finance for HGSMEs;c. Monitoring and evaluation of SME policies in the MENA

region.

3. Proposed activities and outputs for 2015-2016

2

Rationale: High growth enterprises in the MENA region

Increasing evidence that high growth enterprises are important for job creation, innovation and productivity growth…

The MENA-OECD Working Group on SMEs has done analysis on this topic

OECD – IDRC (2012) New Entrepreneurs and High Performance Enterprises in the Middle East and North Africa

But evidence and analysis for the MENA region remains limited…

3

Proposed areas of work for 2015-2016

4

MENA-OECD Working Group on SME Policy and Entrepreneurship

High growth SMEs in MENA Monitoring and evaluation

Further evidence, policy analysis and recommendations

Component on access to finance

for HGSMEs

Data on enterprises

Monitoring and

evaluation of policies and programmes

Proposed areas of work for 2015-2016: Foster high growth SMEs in the MENA region

Focus on the development of HGSMEs to address high unemployment among the youth and graduates

Collect further evidence on HGSMEs in MENA in terms of:1. The characteristics and needs of these firms;

2. Their role in promoting jobs among highly educated youth;

3. Effective horizontal and targeted policies to support them.

Leverage on evidence and work from the MENA region, OECD countries and other regions.

5


Activities:Collection of evidence on HGSMEs in MENA

Stocktaking potential sources of data;

Using the OECD definition of high growth enterprises and gazelles;

Combining surveys and case studies.

Sectors relying on a highly skilled and educated workforce and contributing to job creation for the youth

6


Two possible (non-exclusive) approaches :

Approach 1: Cross country, cross sector analysis Approach 2: Sector specific analysis, focus on the

Information and Communications Technology sector, particularly mobile and web-based applications and services and for a limited number of ICT hubs in the region

7


Approach 1: Cross country, cross sector

Objective: Provide guidance on how to design country strategies and action plans aimed at supporting enterprise growth and employment among educated youth

Identify sectors/activities with high growth potential (e.g., business services, ICT, selected industrial sectors, e-commerce, selected tourism services, etc.);

Assess their size, structure and expansion in the MENA region;

Analyse enterprise characteristics and dynamics (entry/exit) in those sectors as well as youth employment dynamics;

Evaluate barriers to growth (e.g., access to finance, skilled labour or markets);

Examine current policy experiences to address these. Identify ‘best practices’;

Assess policy implications and formulate recommendations.

8


Approach 2: Sector-specific analysis

Objective: Assess how sector-specific policy measures interact in promoting an enabling environment for high growth enterprises in a specific industry

Analyse firm and employment dynamics in a specific sector with a high density of new / young enterprises and demand for skilled labour (e.g., ICT applications);

Focus on a number (5?) of technological hubs where ICT enterprises are already present;

Analyse and benchmark the performance of these hubs against similar hubs in OECD and emerging countries;

Identify key constraints to enterprise growth in these hubs through company surveys and interviews of entrepreneurs (done with local partners);

Analyse general success/failure factors of technological hubs and identify lessons learned;

Formulate sets of policy recommendations.

9

Proposed areas of work for 2015-2016: Module on promoting access to finance for HGSMEs

A component on access to finance for HGSMEs

Objective: Shed light on specific constraints to access to finance for HGSMEs in the MENA region

In parallel and as an element of the overall HGSME project;The collection of information and analysis will depend on the approach taken; Will consider the financial needs involved in high growth and will look at debt, equity and mezzanine finance.

10

Proposed areas of work for 2015-2016:Monitoring and evaluation of SME policies in the MENA region

There is important scope for improvement in MENA in terms of:The availability of timely, reliable and comparable data on enterprises

By size, sector of activity, entry and exit rates, growth, etc.

The introduction of monitoring and evaluation mechanisms to assess the impact and effectiveness of SME policies and programmes.

11

Proposed areas of work for 2015-2016:Monitoring and evaluation of SME policies in the MENA region

Activities:

Undertake a feasibility study for improving the availability, international comparability and timelines on enterprise data in MENA;Analyse good monitoring and evaluation practices from the MENA region and beyond;Develop a roadmap for implementing the findings and recommendations of both analyses.

12

Proposed activities and outputs for 2015-2016

Regional dialogue:•Semi-annual working group meetings during spring and autumn 2015 and 2016;Analysis and policy recommendations:

•Report on HGSMEs and access to finance

•Roadmaps or toolkits for improving data availability, comparability and timeliness;

•Roadmaps or toolkits for improving the monitoring and evaluation of SME policies and programmes.

13

Small Business & Entrepreneurship

Working Group on SME policy - proposed areas of work for 2015-2016