The report, created for donors, illustrates that changing how ESOs are funded has enormous impacts on the scale and sustainability of valuable services that enhance SMEs' growth, job creation, and ability to deliver transformative social and economic impact.
Small and Medium Enterprises (SMEs) are pivotal in spurring economic growth, especially in emerging markets. They bring innovation, job opportunities, and diversity to the economic landscape, and are often drivers of social or environmental change. To thrive, SMEs draw on Business Development Services (BDS), provided by a wide range of Enterprise Support Organisations (ESOs).
Though considerable funding goes towards BDS, it is too often concerned with quantity in the short-term over quality in the long term. This report focuses on the critical underpinning role of donor relationships in enabling ESOs to grow and provide effective services in a sustained manner.
Through an examination of the growth pathways of a selection of leading ESOs from around the world, and the crucial role donors have played in their organisational development, the recommendations in this report unpack how donors can more effectively engage with ESOs in any context to contribute to more sustained impact.
The report draws on trees as a metaphor for ESO development. There are important dimensions ‘above ground’ that are visible, such as the services an ESO provides, as well as ‘below ground’ that are less visible, such as people and culture, governance and finance, and systems and processes. An ESO needs to grow in even ways across the dimensions to have sustainable impact. Much ESO funding concerns itself with the number of enterprises supported in a limited time, and occasionally the performance of these enterprises. This is like focusing on the flowering and yield of a tree over a single season. Shifts in donor practice to think about the broader organizational development of promising ESOs is akin to promoting the healthy growth of a tree, that will grow to produce quality fruit (consistent enterprise growth), at significant scale, year after year.
The report was produced by Snowmelt, and backed by Argidius, with the generous input from 40+ participants who added their perspectives through interviews, workshops and data sharing. This included representatives from major donors and leading ESOs.
We invite you to explore the case studies, familiarise yourself with the concepts and recommendations, recognise good practices already present in your own organisation, and identify changes that will help you contribute to increasingly sustained and scaled impact going forward.
The structure of the report by section:
- Introduction
- Gaps in the canopy: The potential of ESOs
- Towering giants: Seven ESO cases creating impact at scale
- Above and below ground: How ESOs grow
- Nourishing the core: Dimensions of ESO development unpacked
- The forest for the trees: Reframing donor-ESO funding
- Standing tall: Practical recommendations for donors to explore ESO development
- A transforming ecology: A summary and opportunities
- Appendix
A 8-page report summary is also available here, highlighting the key points in the argument, frameworks and recommendations.
