Promoting Entrepreneurship in Latin America

March 15, 2011

TechnoServe has always operated according to the principle that entrepreneurship can help fight poverty by creating jobs and income opportunities in poor communities. Last week, two TechnoServe team members explained how this effort has taken shape in Latin America – and how our strategy on promoting small and medium enterprises (SMEs) has evolved.

TechnoServe has always operated according to the principle that entrepreneurship can help fight poverty by creating jobs and income opportunities in poor communities. Last week, two TechnoServe team members explained how this effort has taken shape in Latin America – and how our strategy on promoting small and medium enterprises (SMEs) has evolved.

At a USAID After Hours seminar, Andrés Rico and Peter Ippolito described the background that led TechnoServe to launch a series of business plan competitions (BPCs) in Central America beginning in 2003. Rico, TechnoServe’s manager of entrepreneurship development for Latin America and the Caribbean, explained that in spite of a high level of entrepreneurial activity, Latin America lags behind other regions in providing formal business training.

“Training is a huge component of business development, and it’s something that is lacking,” Rico said.

The business plan competitions were designed to fill that gap. Participants received training on creating a workable business plan, and winners were given seed capital to help launch or expand their businesses. In 2009, TechnoServe conducted a study to assess the impact of our Central American business plan competitions. The results were dramatic: After two years, BPC participants generated twice the sales growth and were more than twice as likely to be successful than businesses that did not participate in the competitions.


Ana Rosa Graf of San Salvador, El Salvador, participated in a 2005 TechnoServe business plan competition to help launch Arte Comasagua, a handicraft business. She won $6,000 in seed capital and began exporting to regional, European and U.S. markets within a year.

Based on insights from the study, TechnoServe modified our approach for business plans in South America and Africa, utilizing a more rigorous selection process to ensure that the most promising entrepreneurs were chosen as winners. TechnoServe also introduced an “aftercare” program to provide follow-up support for a year after the competitions. This helps entrepreneurs to continue to use their business plans as a tool to guide them through their launch and growth.

TechnoServe is now piloting a “business accelerator” model that focuses on providing access to capital and markets in order to help entrepreneurs achieve sustainable growth. On the capital side, TechnoServe helps entrepreneurs figure out their capital needs and negotiate with potential sources of funding. On the market side, our business advisors help fledgling businesses connect to markets for their products. For example, in Chile, TechnoServe has partnered with a supermarket chain to reward the most promising entrepreneurs with a prominent showcase in its stores.

Learn more about TechnoServe’s entrepreneurship development work in Latin America.

View the event screencast, courtesy of USAID & microLINKS.

Watch Rico discuss key takeaways from the event:

 

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