The Colombia Business in Development Facility Hub (the Hub), a partnership between business, government and international development co-operation agencies, is working to promote inclusive enterprise, focusing on income generation projects to prevent or mitigate armed conflict in order to achieve lasting and sustainable peace.
The Hub assists enterprises affiliated with Colombia’s ANDI Foundation through public-private partnerships that create income-generating social projects by matching institutional official aid with private initiatives.
The role of the Hub is to advocate and provide assistance for ANDI-affiliated enterprises through public-private partnerships orientated to develop social projects with income generation potential, while also matching official aid with private initiatives.
Of the many social impact efforts the Hub is partnering on, two remarkable projects are creating positive social impact by focusing on victims and ex-combatants of Colombia’s internal conflict.
The “Peace Welders” (Soldadores de Paz in Spanish) are a group of 10 metalworking enterprises joined in a private-public initiative to meet demand for welding services in the Colombian state of Santander. Initially, 20 Colombian ex-combatants joined the project through the Colombian Agency for Reintegration. After six months of training on welding techniques and business skills, they performed internships with Peace Welders partner enterprises. Today, 14 of these trained welders own a new welding company to meet demand in the area. Peace Welders was financed with seed capital through the Fund of Peace Entrepreneurship, supported by Swedish and German development co-operation.
Another Hub project aims to create 2,000 new jobs to increase production in the apparel and textile industry in a rural area near the Pereira free trade zone, located in west Colombia near the Andes Mountains. Increased employment is expected to bring more than USD $11.5 million to a region that suffered significant economic loss as a result of the armed conflict.
Some of the most significant obstacles to overcoming poverty include low levels of professional skills, pervasive unemployment, and working in the informal sector. These factors often disproportionally affect youth. To address these issues, the textile industry project will train people with the necessary skills to fill the 2,000 new textile industry vacancies, and also promote alternatives for development through new ventures and social business within the communities to complement or strengthen existing value chains. Increasing the region’s textile industry potential is predicted to positively impact more than 26,000 people through higher incomes.
The Hub is working in similar ways as a national platform managed through eight branch offices in major Colombian cities. Focusing on areas with industrial activity, the Hub is a strategic ally to more than 40 institutions and stakeholders, helping identify needs, opportunities and relevant partners. The Hub has the ability to access information and find other allies in almost every part of Colombia where ANDI has offices. As a result, Hub members find added value in partnering, access to co-operation funds, improved access to information and resources, increased potential to collaborate on projects and better opportunities for development.
The Hub uses five criteria to choose which projects to work with: public-private partnerships, inclusive businesses, “anchor” companies or commercial allies, rural populations, and those working toward conflict mitigation or prevention. After considering these, the Hub analyses business feasibility and operations, taking into consideration when the enterprise is a startup. It then partners with project stakeholders, and also helps to solve bottlenecks faced by businesses. Through partnership, organisations can overcome limitations and more effectively be a part of solving communities’ development challenges.
After the Busan agreements in 2011, the Swedish International Development Cooperation Agency SIDA and the Netherlands Ministry of Foreign Affairs decided to lead a global strategy in four countries to find out if business in development facilities could be an effective model for putting development co-operation into action, choosing Mozambique, Zambia, Bangladesh and Colombia as a mix of low and middle-income countries.
The Colombian Hub executive committee is comprised of representatives from the ANDI Foundation, the Swedish Embassy in Colombia and the Presidential Colombian Agency for International Cooperation. The advisory committee gathers more than 40 organisations from the private and public sectors as well as from international co-operation, academics and NGOs.
A scoping mission was carried out in Colombia in 2013, with participants from all sectors joining discussions and workshops. Following these consultations, Colombia’s ANDI Foundation created the Hub, with SIDA pledging about USD $150,000 for two years to establish it. To date, the Hub had incubated seven new and accelerated eight existing partnerships with more than 32 organisations involved in 18 social impact projects.
A scoping mission for the Hub found that many, if not most, organisations in Colombia work with or have influence over another association. Despite these connections, most are not working in partnership. There is big potential in Colombia to build partnerships across many sectors such as textiles and manufacturing, agricultural development, industrial services and recycling.
Colombia has a very complex social environment. About half of the country lives in poverty, with problems of unemployment, basic human rights violations, rural migration to main cities, and other social exclusion issues resulting from war and conflict.
While employment and entrepreneurship are not only tools to overcome poverty, but are also very powerful to promote short-term solutions with rapid results. The first steps are for vulnerable communities to access micro-credit and funding, training for work, access to nutrition, health, justice and, in the best cases, a better quality life.
The hub is now focusing on income generation projects, such as social and inclusive business to develop sustainable business in vulnerable communities, leveraging enterprises to provide goods or services within their value chains. However, even with good conditions for partnering, there are many challenges such as a huge lack of communication, co-ordination, and little experience on developing sustainable income-generating projects.
However, considering that the initial Hub goal was to incubate five new partnerships and accelerate five more, results show that Colombia has very strong capacities with high potential for partnering and that the Hub is a powerful example of effective development co-operation.
The Busan Partnership in 2011 committed governments, businesses and social organisations to work together to discover new paths for development. This has created more engagement and capabilities to work toward one common objective. But it is also necessary to have a guide with the expertise to gather all resources, needs, demands and knowledge under one strategy to co-ordinate and lead effective actions to achieve the best results for beneficiaries. The Hub matches demands, resources and capabilities from different actors to use co-operation resources and other development finances more efficiently.
The Hub’s success will be measured both by the quantity of partnerships and by the results of the projects. The baselines needed to measure the impact of partnering before and after the Hub, as well as the impact of individual projects are now being developed, will be ready in February 2015.
Learn more on the Hub’s website.