PRIVATE SECTOR DEVELOPMENT and entrepreneurship support in particular, seem to attract all the buzz in the world of development aid. Only ten years ago, entrepreneurship support wasn’t well developed in Rwanda. Since, things have moved fast. Almost all major donor countries, alongside private development partners, choose entrepreneurship support as a vehicle to achieve job creation and private sector development. In reaction, a plethora of organisations now offer a wide range of entrepreneurship support services, going from short trainings for university students to help them start up a business; over technical experts flying in to offer highly specialized support; all the way to comprehensive programmes offering a full mentorship program aimed at catapulting promising businesses into major industry players. A recent study by the Ministry of Trade and Industry surveyed about 70 Business Development Service (BDS) providers active in Rwanda at the moment. Working in entrepreneurship support myself, I welcome these initiatives. Entrepreneurship support is a prime example of the transition from charitable aid to a new model of international collaboration that focuses on transformational change and long-term impact. The appeal is obvious. Entrepreneurship support helps people to help themselves, thus contributing to the self-reliance of countries. Still, we should be careful not to fall into the trap of believing that we have now finally discovered the magic formula to successful development aid. The field of entrepreneurship support is just as tricky as any other type of development aid and has just as many pitfalls. One pitfall is the belief that macro-level solutions will automatically translate into micro-level solutions. This is not the case. As UNCTAD states in their Entrepreneurship Policy Framework and Implementation Guidance report: ‘Donors' work with concepts of Private Sector Development which are highly abstract, treat developing countries' private sectors as tabula rasa, and focus mainly on macro level preconditions’. It is indeed important to pay attention to the specific cultural and historical context in which these policies are implemented. A lot of on-the-ground adaptation is needed to make things work. Another pitfall is the belief that anyone wanting to start a business can be accelerated to become an economically relevant entrepreneur. This is naive as not all people are cut out to be an entrepreneur. No system of aid can infuse in an entrepreneur the no-matter-what-it-takes attitude to solve its business’s problems. Aid or grants can keep businesses afloat for a while, but not on the long run. What makes things tricky is that the trap this pitfall represents, is especially attractive as everyone benefits in the short term: the entrepreneurs who receive different types of aid; the donors who can showcase the high uptake of their interventions; and the government who feel assured that lots of effort is being invested in entrepreneurship development. Of course, these and other pitfalls can be avoided. Major players such as Mastercard Foundation and Argidius Foundation (SCALE report) have developed important strategic documents on this matter. Here are some key principles that I believe are needed to build an impactful entrepreneur support ecosystem in Rwanda: Entrepreneurship isn’t just entrepreneurship. In policy making and designing support services, we need to understand better and give support to vision-driven entrepreneurship. Many interventions may have unintended consequences or may even negatively impact economic development if we do not help businesses to focus on long term strategy, rather than short term opportunities. Provide not only technical support but work on changing the mindsets of entrepreneurs. The key to successful growth is not managerial skills alone. It is the entrepreneurial mindset of continuous learning, creatively finding solutions to emerging problems, reinvesting profits, maintaining financial records, and more. The entrepreneurial mindset drives the search for innovations and growth, but also leads towards greater care for clients and staff. Technical, managerial skills alone without mindset change are not impactful in the long run. Measure impact by the performance of enterprises served, not by the number of enterprises served. The growing importance of entrepreneurship in Rwanda has magnified the need for a sound monitoring and evaluation of BDS interventions. It is not the number of trainings that matter, but to what extend the trainings make businesses more successful. One key point is to support entrepreneurs in assessing their business performance. This helps the entrepreneur directly, but also allows the BDS provider to evaluate the relevance and quality of their programs. Entrepreneurship in Rwanda is picking up. Many young people are starting up new business ventures making a difference in the everyday life of Rwandans. Let us not romanticize entrepreneurship! Let’ make sure that business development services critically but constructively challenge entrepreneurs so they can emerge as strong players in Rwanda’s economy. Alice Nkulikiyinka is Country Director of Business Professionals Network (BPN) Rwanda. She is also board member of Rwanda Development Board (RDB) and I&M Bank. With more than ten years of experience working in the Business Development Support sector, she is a leading expert on entrepreneurship and economic development in the country. The views expressed in this article are of the author.
