An Innovative Approach to Market Development in Crisis-Affected - - PowerPoint PPT Presentation

An Innovative Approach to Market Development in Crisis-Affected Countries

Venture Peacebuilding – From Idea to Industry

January 23, 2018 | Washington, DC

About Us

WHO: Established in 2004, Building Markets is a nonprofit

• rganization registered in the US and Canada with its HQ
• ffice in NYC.

WHAT: We contribute to job creation, economic growth, and stability in crisis-affected countries. HOW: By finding, building, and connecting small and medium-sized enterprises (SMEs) to supply chains and investment. WHERE: We have operated across 3 continents and more than a dozen countries including Afghanistan, Haiti, Liberia, Myanmar, Mozambique, Timor-Leste, and Turkey.

The Challenge and Opportunity

• United Nations peacekeeping

missions budgets around $5b per year

• Seemed to be spending little in the

local economy to carry out projects and services

• Missing a key opportunity to create

jobs, peace, and self-sustaining growth

• Many believed that spending locally

would distort markets

How We Got Started

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

UNAMSIL UNMIL UNTAET UNTAC ONUCI MONUCMINUSTAH ONUB UNMIK

local impact imports unspent allowances external impact

• What we Found?
• 80% of budgets

went straight out

• f the economy
• Although in 4

cases, even that low-level of spending equaled 5 to 8% of local GDP Good News? Lots of room for IMPROVEMENT! Particularly in sourcing goods and services from local businesses

All that red? The external impact. A challenge but a huge opportunity!

SMEs create up to of jobs globally

Doing Business with local SMEs is a Win-Win

• Make up 90% of businesses in any private sector
• No peace without jobs – and SMEs create them
• Generating employment makes more and more citizens

stakeholders in the peace of their country

• Jobs create self-reliance and reduce dependency on, and the cost
• f aid
• 76% of new jobs go to low-skilled workers - developing human

capital, and creating new market capacity

• Generate tax revenue for government
• Formalizes markets, drawing in new investment

86%

Lack of SMEs Driving GDP Growth

• Local markets still getting bypassed
• There are real challenges and risks -

regulatory environments and investor/buyer compliance

• But there are also basic, solvable

problems: a lack of reliable information, commercial knowledge and experience, and market access.

Despite Compelling Evidence

• L
• w

I n c

• m

e C

• u

n t r i e s M i d d l e I n c

• m

e C

• u

n t r i e s H i g h I n c

• m

e C

• u

n t r i e s

• Informal Sector

Other SME Sector 47% 37% 36% 13% 30% 31% SMEs contribute only 16% of GDP in low income countries 51% 39%

Our Approach

WE FIND: Where information and networks are scarce and unreliable, we bring visibility to local SMEs through rigorous research and business verification. WE BUILD: We address local business capacity gaps through comprehensive supplier development programs that provide SMEs with the resources they need to become competitive and expand to new markets. WE CONNECT: We facilitate access the local markets and SMEs through buyers and investors through matchmaking, tender distribution and events.

OUR IMPACT: Building Markets has supported a network of 23,000 local SMEs across more than 30 sectors Through our services local SMEs have won $1.3bn in contracts and this has helped create 70,000 jobs.

Haiti 3,964 Liberia 4,639 Timor-Leste 3,155 Mozambique 800 Afghanistan 8,302 Myanmar 3,078 Turkey 335 (Syrian) Lebanon 25

In Action – Supply Chains

Business: Heineken, Myanmar Problem: Wanted to localize supply chain around new brewery, but did not have local business data/relationships. Solution: Building Markets’ assisted with procurement process by identifying SMEs within certain sectors/aligned other specifications Impact: 3 companies went on to win contracts. Building Markets also assisted with their contractual compliance to help ensure success Local SME: Dayuu Enterprises, Liberia Problem: Local construction company unable to access concession

• pportunities due to closed vendor lists

Solution: Building Markets facilitated a match between Dayuu and a large extractive, Arcelor Mittal Impact: Dayuu went on to win 8 contracts worth $70,000, purchased new assets and adopted new company practices

In Action – Investing

Location: Turkey Problem: Now largest refugee host in the world, already high rates

• f unemployment prior to crisis, scarce resources. Urgent need to

grow economy and create jobs to prevent further destabilization. Solution: Conducted groundbreaking assessment of Syrian refugee led-businesses who are signification economic contributors – but were largely unnoticed. Impact: Found 6,000 SMEs started since war began with $300m+ in Syrian capital. Creating 9 jobs on average. Identified investment needs, brought first 300 online through new platform to give them visibility (160 data points on each SME). With local partners - connecting them to capital, supply chains, and business support services. Expanding network of SMEs in Turkey and across region. www.refugees.buildingmarkets.org

53% 23% 47% 28%

10 20 30 40 50

Fixed Assets Marketing Business Infrastructure Operating Costs

Borrowing Needs

39% 44% 16%

10 20 30 40 50 60 70

Less than $100,000 $100,000 - $499,999 $500,000 or more

Investment Capital Needs

Jennifer P . Holt, CEO

CONNECT WITH US:

Email: holt@buildingmarkets.org Website: buildingmarkets.org Twitter: @buildingmrkets @jenniferpholt

THANK YOU!

Jennifer P . Holt | Chief Executive Officer | holt@buildingmarkets.org | www.buildingmarkets.org | @BuildingMrkets