In August 2023, a private sector engagement event was held to support the government’s efforts towards structural transformation, industrialization, development of the informal economy, employment creation and impactful investments.
Participation of the private sector in upskilling for inclusive growth and green transition was among the recommendations of the event.
The private sector has been historically active in the field of coaching for informal and microenterprises (IMEs). Visibility of the activity peaked just prior to the onset of Covid-19, and it is beginning to build momentum again. This activity was typically outsourced with limited impact on the enterprise providing the mentoring and coaching.
To deepen the impact of mentoring and coaching for both the sponsoring enterprise and the beneficiary, a new approach can be considered: direct mentoring and coaching activities by larger enterprises that draw smaller enterprises into the operating ecosystem of the larger enterprise.
To illustrate this, many larger enterprises employ maintenance staff for facilities. These employees could form a company and the maintenance function could be outsourced on a contract basis. This would act as a form of incubation. Another possibility is that the smaller enterprise could be involved in the value chain of the enterprise, either as a supplier or offtaker.
The benefit of this is that the larger enterprise will reduce its payroll and related administration costs, with only the service costs remaining.
An additional possibility is for the larger enterprise to empower and train smaller enterprises to market products and services onwards, reducing the larger enterprise’s reliance on internal marketing and sales.
Once the new, small company becomes sustainable, it can expand its services to other companies and continue to grow.
The distinction here is that both parties should be in the same sub-sectoral or enterprise ecosystem and the scale of the beneficiary enterprise should be small.
The benefit for IMEs will be a stable source of revenue from the larger enterprise, implementation of business systems provided by mentoring and coaching from the larger company, resource sharing in the early phases, networking and growth.
Support from the larger enterprise can consist of practical operational and administrative knowledge, strategic guidance and financial support in the form of seed capital, either on a debt or equity basis.
The benefits to the larger enterprises will be reduced risk in the supply chain, innovation and fresh perspectives and entrepreneurial energy. At the same time, the larger enterprise will be growing and stabilizing the existing talent pool available to it.
The IME can also be a testbed for reduced risk, either through prototyping and / or potential buy-in once sustainable.
Finally, the exercise might also be offset against CSI, ESG and value creation.
For the relationship between the larger enterprise and the IME to thrive and bear fruit, the scene must be set with clear expectations and goals. There must, however, be flexibility on adapting strategy and approaches. With long-term commitment and mutual respect from both sides continuous learning and optimum growth will ensue.
The field is new, and it will be incumbent on larger enterprises to seek opportunities. However, if subsidies and incentives are put in place for this form of mentoring and coaching activity, it is possible that the activity will add value to the Namibian economy.
*Paul Egelser is a former board member of Bokamoso Entrepreneurial Center, an incubator in Windhoek. He is Manager of the Development Bank of Namibia’s mentoring and coaching unit and was one of the developers of Namibia’s national mentoring and coaching plan. He writes this in his personal capacity.
