Launching a sustainable business goes well beyond learning how to draft a business plan or fill out a financing application.
It involves a range of skills, both “hard” and “soft”, such as managing a start-up enterprise, motivating employees, assembling a cohesive team, tailoring a product to a well-defined market, adapting rapidly to fast-changing circumstances and consumer sentiment, and understanding how to convert an interesting technology into a viable business. These skills are not acquired, and nor can businesses succeed, in a vacuum. They need a business “ecosystem”, where potential entrepreneurs can learn the right skills and innovation is both encouraged and nurtured. For the Middle East and North Africa (MENA), this will require a change in the cultural attitude toward entrepreneurship.
Nascent ecosystem emerging in MENA
A nascent ecosystem has been emerging in MENA over the past five years. The few businesses that have achieved success in this evolving environment were private sector led, usually by members of the diaspora or those who had either studied or started a business abroad. These individuals come equipped with access to international networks and markets and they have clear incentives to see their ventures succeed. They invest their time as well as their money; key ingredients for a successful business ecosystem that need to be further encouraged. Governments need to know that strengthening innovation-led growth entails understanding and promoting investments in research and development (R&D), cultivating the necessary skills, putting in place a functional and effective business environment and the mechanisms to foster private and public collaboration.
Two initiatives from World Bank
The World Bank has launched two initiatives to support the fledgling ecosystem and help foster innovation and entrepreneurship in MENA. “Supporting the Ecosystem for Fostering a Dynamic Entrepreneurship” is funded by a Bank Development Grant Facility that supports regional partnerships for development. The program leverages a partnership between two leading regional incubators Oasis500 and Wamda to boost the support they already provide to pre and early start-ups across the region. In addition to expanding mentorship, skills development and access to investors, the incubators will also engage stakeholders (governments, universities, investors, other incubators) in each country as a means of expanding the partnership and broadening the transfer and exchange of critical knowledge and skills. Outreach is an important component and will include dissemination of success stories and “lessons learned.” To ensure they reach a diverse audience, a variety of media and platforms will be used, such as popular web sites, an Arabic Entrepreneurship Newsletter, comics, info graphics, cartoons and videos. Particular attention will be paid to rural areas and to groups who tend not to see themselves as entrepreneurs, such as women and youth. The Bank continues to seek funding and partnerships with other entities that have a track record of supporting entrepreneurship and building this capacity in the region.
The second initiative works at the policy level. The World Bank, the private sector, academia, think tanks, civil society experts and governments formed a community of practitioners to cultivate change through innovation and technology. “The How-to of Innovation, Technology and Entrepreneurship” (ITE) was launched last year in Prague. It is a practitioners’ exchange, networking and learning activity. Its goal is to help countries in the region advance policies that promote the various elements required for a thriving, innovative economy. It provides an opportunity for the exchange of operational lessons from other countries on the “how” of public support in this area.
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IT was becoming more and more important to the financial security and operational efficiency of banking services, State Bank of Viet Nam (SBV) Governor Nguyen Van Binh said at a banking technology conference in Hanoi, mid May 2013.
Many areas including payments, lending, e-banking and risk management had been equipped with new and more diversified technology, he said, adding that some services were now completely automated.
Speeding up IT application and upgrading banks’ IT infrastructure were necessary to catch up with the trend, he stressed.
According to the SBV, many weaknesses in risk and banking management were exposed last year. The banking system is currently grappling with one of the region’s highest bad debt ratios, at 8.82 per cent of total loans.
Deputy Minister of Information and Communications Nguyen Minh Hoang singled out cloud computing, mobile computing and social media as major trends that had completely transformed the way banks operate and interact with customers.
“A focus on improving bank governance and risk management practices and pushing the restructuring of under-performing banks will be the main theme for 2013,” he said.
In order to develop banking technology, the country should boost international co-operation and enhancing human resources and management, said SBV’s Banking Strategy Institute director Nguyen Thi Kim Thanh.
World Bank economist Noritaka Akamatsu said that improving insolvency and restructuring State-owned enterprises should be the main goals for the banking sector’s development.
The International Data Group, the co-organiser of the event together with the SBV, said that e-banking and mobile banking were showing great potential.
- Banking sector needs to embrace IT innovation (bizhub.vn)
- SBV stalls asset regulations as companies feel the pinch (vietnamnews.vn)
- Russians attempt to topple Google in Vietnam (sfgate.com)
- Social bank helps 21m poor (vietnamnews.vn)
- Lending over 4 months up 2.1% (vietnamnews.vn)
- Vietnam Premier Approves Debt Asset Company, Central Bank Says – Bloomberg (bloomberg.com)