admin

In today’s digitalized and rapidly evolving business landscape, digital transformation has emerged as a critical imperative for businesses of all sizes. For Micro Small and Medium Enterprises (MSMEs) especially, embracing digital transformation is not just an option/choice but a necessity to remain competitive and sustain growth in a digitally driven economy. This article explores the reasons why digital transformation is crucial for MSMEs, the challenges they face, and how they can effectively navigate this transformative journey. Understanding Digital Transformation Digital transformation entails leveraging digital technologies to fundamentally alter business operations, customer interactions, and value delivery mechanisms. It encompasses adopting cloud computing, data analytics, artificial intelligence (AI), Internet of Things (IoT), and other digital tools to enhance efficiency, innovate processes, and create superior customer experiences. For MSMEs, digital transformation represents an opportunity to level the playing field with larger enterprises by enhancing agility, scalability, and operational capabilities. Enhanced Operational Efficiency One of the primary benefits of digital transformation for MSMEs is the enhancement of operational efficiency. By digitizing processes and workflows, MSMEs can streamline operations, reduce manual errors, and improve productivity. Automation of repetitive tasks through software solutions not only saves time but also allows employees to focus on more strategic initiatives that drive business growth. For instance, cloud-based accounting systems simplify financial management, while project management tools improve collaboration and project delivery timelines, also can scale their operations more efficiently, respond to market demands faster, and reduce operational costs over time. Improved Customer Engagement In the digital age, customer expectations are higher than ever before. MSMEs that embrace digital transformation can deliver personalized customer experiences that foster loyalty and satisfaction. Customer Relationship Management (CRM) systems enable MSMEs to gather and analyze customer data, gaining insights into preferences and behavior patterns. This data-driven approach empowers MSMEs to tailor their products and services to meet customer needs more effectively, thereby enhancing competitiveness in the market. Nowadays customer expectations are higher than ever before. Digital transformation enables MSMEs to deliver personalized customer experiences through data-driven insights. Digital transformation allows MSMEs to deliver personalized customer experiences through data-driven insights. Platforms like Jumia in Ethiopia provide MSMEs with access to a broader market, allowing them to reach customers beyond their local vicinity and offering convenience through e-commerce transactions. This not only enhances customer satisfaction but also fosters brand loyalty and market competitiveness. Scalability and Adaptability Scalability is another crucial aspect of digital transformation for MSMEs. Cloud computing, for example, enables MSMEs to scale their IT infrastructure according to business needs without significant upfront investments in hardware. This flexibility allows MSMEs to expand operations seamlessly, enter new markets, or launch innovative products/services more swiftly than traditional business models would permit. Moreover, digital tools facilitate quicker adaptation to changing market conditions and consumer trends, ensuring MSMEs remain agile and responsive in a dynamic business environment. Harnessing Data for Insights and Innovation Data has become a cornerstone of business success in the digital era. MSMEs that harness data analytics can gain valuable insights into market trends, customer behavior, and operational efficiency. Advanced analytics and AI-driven algorithms enable MSMEs to make data-driven decisions, identify growth opportunities, and mitigate risks more effectively. By leveraging data, MSMEs can innovate faster, develop new revenue streams, and differentiate themselves in saturated markets. Cost Efficiency and Competitive Advantage Contrary to common misconceptions, digital transformation does not always require exorbitant investments. Many digital tools and platforms are cost-effective, offering either free or subscription-based models that align expenses with usage. Over time, these investments translate into significant cost savings through improved efficiency, reduced operational overheads, and optimized resource allocation. Furthermore, MSMEs that embrace digital transformation gain a competitive edge by offering innovative products/services, superior customer experiences, and faster response times compared to their less digitally mature counterparts. Overcoming Challenges While the benefits of digital transformation for MSMEs are substantial, challenges exist that must be addressed proactively. Limited budget and resources, lack of digital skills among employees, cybersecurity concerns, and resistance to change are common obstacles MSMEs face. Overcoming these challenges requires a strategic approach that includes investment in employee training, collaboration with technology partners, implementation of robust cybersecurity measures, and leadership commitment to driving cultural change within the organization. The Path to Successful Digital Transformation Achieving successful digital transformation requires a holistic approach that integrates technology with people and processes. MSMEs should begin by defining clear objectives aligned with business goals and identifying key areas where digitalization can drive maximum impact. It is essential to prioritize initiatives based on potential ROI and feasibility, ensuring incremental improvements that build momentum over time. Collaboration with technology vendors and consultants can provide MSMEs with the expertise needed to navigate complex digital landscapes effectively. Developing a culture of continuous learning and innovation is equally crucial, empowering employees to embrace new technologies and adapt to evolving market demands. Regular evaluation of digital transformation initiatives is essential to measure progress, identify areas for improvement, and refine strategies accordingly. Conclusion In conclusion, digital transformation is not merely a trend but a strategic imperative for MSMEs looking to thrive in the digital age. By enhancing operational efficiency, improving customer engagement, fostering scalability, harnessing data-driven insights, and gaining competitive advantage, MSMEs can position themselves for long-term success and sustainability. While challenges exist, proactive planning, investment in digital capabilities, and a commitment to innovation can enable MSMEs to overcome obstacles and capitalize on the opportunities presented by digital transformation. Embracing digital transformation today is not just an investment in technology but an investment in the future growth and resilience of MSMEs in a rapidly evolving global economy. Written By Yinebeb BahruLinkedin: https://www.linkedin.com/in/yinebeb-bahru-%E1%8B%AD%E1%8A%90%E1%89%A0%E1%89%A5-%E1%89%A3%E1%88%95%E1%88%A9-4a7573177/

R&D Group, a veteran outsourcing and enterprise development organization, has developed a new digital support hub called SHARE, targeting micro, small, and medium enterprises (MSMEs). Officially launched on May 31, 2024, SHARE seeks to address challenges faced by entrepreneurs, such as limited access to information, funding, and essential business skills. According to R&D, SHARE emerged from a perceived need to shake up the traditional support system for MSMEs. “We’ve been delivering entrepreneurship acceleration programs for over a decade,” says Rahel BoonDejene, founder and Group CEO of R&D. “But SHARE allows us to move into the digital space, streamline our services, and connect businesses with opportunities, mentors, and funding in a whole new way.” Launched at the Dare2Share event, SHARE and its launch partner, CARE, set an ambitious target: supporting 65,000 businesses within three years. These businesses will primarily be SMEs and women-owned ventures. Aligning with CARE’s Advancing Women’s Enterprise (AWE) project, SHARE focuses on empowering women entrepreneurs. The Advancing Women Enterprise (AWE) is a project that focuses on increasing women’s access to financial and entrepreneurial tools and opportunities. SHARE offers mentorship, digital skills training, face-to-face workshops, funding opportunities, business acceleration programs, and, most importantly, access to information. Though R&D focuses on supporting CARE’s AWE Project for three years, it ultimately aims to become self-sustaining through commission and subscription fees and a crowdfunding platform in the long run, according to Rahel. “SHARE is our sustainable model for private sector development, and it’s bigger than its current focus.” Wondwesen Zewdie, Managing Partner of R&D, told Shega. Wondwesen regards the platform as a new step towards making private sector development support accessible to a vast number of MSMEs in Ethiopia. SHARE also introduces the concept of fractional experts, professionals who offer their expertise and services on a part-time or project basis.  Businesses can tap into a diverse pool of specialists across various sectors, gaining access to specialized knowledge and skills to elevate growth and success. The collaboration with CARE Ethiopia has already identified 5,000 women-led businesses to benefit from the initiative. An additional 12,500 SMEs will receive various forms of support. Meanwhile, the top 250 performers will be selected for a coveted three-month acceleration program. This Blog is Written By Etenat Awol and Posted on Shega.co

Ethiopia’s economy, which is among the fastest-growing in Africa, can reach its maximum potential once a strong capital market is established. Not only is a healthy capital market a need but also the lifeblood of economic advancement, propelling entrepreneurship, innovation, and long-term prosperity. Currently, Ethiopia’s financial system is based largely on bank lending, which frequently isn’t enough to fulfill the rising demand for finance from investors looking for profitable ventures and companies looking to expand. A capital market, with its diverse range of financial instruments, can effectively bridge this gap and channel capital into productive sectors of the economy, as follows. Ethiopia’s vibrant entrepreneurial spirit and expanding industries require a mechanism to effectively mobilize domestic capital. A capital market provides a platform for businesses to raise funds through equity and debt offerings, enabling them to expand their operations, invest in new technologies, and create jobs. This mobilization of domestic capital not only reduces reliance on foreign investment but also fuels local innovation and economic growth. A capital market broadens the scope of financial participation, allowing individuals to invest their savings and grow their wealth. This financial inclusion fosters a culture of saving and investment, empowering Ethiopians to take control of their financial future and contribute to the nation’s economic prosperity. Ethiopia’s economy is currently heavily reliant on a few key sectors, such as agriculture and service. The development of the capital market can facilitate the diversification of the economy by providing funding for emerging industries and supporting the growth of Micro small and medium-sized enterprises (MSMEs). This diversification not only strengthens the economy’s resilience but also creates new employment opportunities and enhances overall economic stability. A capital market provides a fertile ground for innovation and entrepreneurship by connecting promising startups and early-stage companies with the capital they need to realize their ideas. This infusion of capital fuels research and development, leading to technological advancements and the creation of new products and services that drive economic growth. The Dutch-based consulting firm R&D Group Ethiopia office has been playing a significant role in supporting the growth of SMEs in the country.  R&D provides various services to businesses, including market research, business planning, BDS support, and capacity building. One of the ways the R&D Group has supported SMEs is through its acceleration programs. These programs provide technical support, mentorship, and training to help businesses scale and become investment-ready. The programs typically focus on areas such as business model development, financial management, marketing, and fundraising. By participating in these acceleration programs, SMEs can improve their business operations, increase their competitiveness, and access new markets. They can also become more attractive to potential investors, including those in the upcoming capital market in Ethiopia. The R&D Group’s efforts to support SMEs in Ethiopia are part of a broader strategy to promote private sector development and economic growth in the country. By helping SMEs access financing and develop their capacities, the R&D Group is contributing to the development of a vibrant and competitive private sector in Ethiopia. Overall, the R&D Group’s acceleration programs, combined with the upcoming capital market in Ethiopia, can provide SMEs with the necessary support and resources to grow and succeed in the long term. Conclusion A capital market is an engine of economic advancement, not just a financial construct. The creation of a strong capital market is essential to Ethiopia’s goals of inclusive and sustainable economic growth. Ethiopia can realize its full potential and emerge as an economic powerhouse in Africa by utilizing the strength of a large capital market.

Ethiopia’s Information Technology Park Corporation (ICT Park) is driven to play a pivotal role in driving the nation’s digital economy forward. In a recent development, executives from the R&D Group engaged in a constructive meeting with the CEO of ICT Park Corporation and the General Manager of ICT Park. The focus of this meeting was on collaborative strategies aimed at elevating Ethiopia’s digital landscape. This meeting holds significance as it aligns with ICT Park Corporation’s initiative to reinvigorate one of the park’s key original purposes: serving as a hub for promising private sectors, especially outsourcing enterprises. The objective is to provide these enterprises with a supportive environment within the park, facilitating growth through sustained assistance and market connections. ICT Park aspires to evolve into an ecosystem aggregator, streamlining services for businesses in the ICT sector and acting as a comprehensive destination for their diverse needs. Discussions also explored strategies to enhance the park’s value and attract interest from the private sector. R&D Group’s executives highlighted that Shared services should be a key consideration to streamline operations and reduce costs, ultimately enhancing efficiency for both new entrants and existing park residents. This approach is designed to alleviate administrative burdens, enabling businesses to focus on operations and contribute to economic growth through increased foreign currency income and employment. The park’s strategic location, offering proximity to affordable housing, food, and transportation options, positions it as an ideal partner for ICT Park’s initiatives. According to Mr. Henok Ahmend, the park is actively working on initiatives to make it an attractive destination for enterprises to relocate. The resident program is structured to foster partnerships between resident companies and relevant public stakeholders for onshoring opportunities and market linkages, aligning with the vision of facilitating overseas outsourcing activities. Concurrently, Ethiopia’s standing in the global outsourcing sector is gaining momentum. Despite the industry’s growth within the country, Ethiopia’s global market share remains relatively low. Mr. Henok Ahmed, CEO of ICT Park Corporation, and R&D’s founders, Rahel Boon-Dejene and Mr. Wondwesen Zewdie, share the vision of establishing Ethiopia as the preferred Business Process Outsourcing (BPO) destination in Africa. R&D Group’s executives emphasized the substantial benefits of joining ICT Park for outsourcing companies during their discussions. Collaborative support for offshore outsourcing companies in the same geographic location is deemed the most impactful way to create a significant industry influence. This support encompasses a well-functioning infrastructure, easier market linkage, and collaborative policy dialogue. The collaboration between ICT Park and R&D Group aims to attract more outsourcing companies, creating job opportunities for Ethiopians and propelling the outsourcing sector to generate immense foreign currency for the country. Mr. Henok Ahmed, CEO of ICT Park Corporation, encourages potential partners to initiate conversations and join the park resident program, provided that they align with the park’s vision. As Ethiopia’s outsourcing sector expands, it stands at a pivotal juncture with a young workforce, a conducive business environment, and a growing ICT sector. To capitalize on this growth, investments in infrastructure, training, and marketing are imperative. The proactive approach taken by ICT Park Corporation is a significant step forward in creating a conducive environment for the private sector to thrive and drive economic momentum. As a pioneer in the outsourcing sector since 2010, R&D Group is committed to propelling this movement forward and supporting initiatives that contribute to making the outsourcing industry a significant contributor to Ethiopia’s economy. Through strategic partnerships, tailored strategies, and a collective vision, Ethiopia has the potential to establish itself as a key player in the global outsourcing market, fostering economic growth and providing opportunities for businesses and individuals alike.

Agriculture is the backbone sector in Ethiopia’s economy due to its significant contributions to GDP growth, employment opportunities for a majority of citizens and substantial export earnings through key commodities like coffee and sesame seeds. The government’s unwavering commitment to promoting agricultural development through various initiatives underscores its recognition of this sector’s vital role in sustaining economic prosperity for the nation. Agricultural sector contribute to over 40% of the country’s GDP. Additionally, it serves as the primary source of employment for more than 80% of the Ethiopia’s workforce and accounts for a significant 83.9% of exports. The leading agricultural commodities in Ethiopia include coffee, sesame seeds, and pulses. The agricultural sector in Ethiopia showcases remarkable diversity, with a wide variety of crops and livestock being cultivated. Among the crops, cereals such as teff (ጤፍ), wheat, and maize are the major ones. Following closely are pulses, oilseeds, and fruits. Livestock also plays a crucial role in providing sustenance and income for the population, with cattle, sheep, goats, and poultry being prominent sources. Ethiopia boasts a rich history of agricultural production that has garnered continuous attention from the government over the years. To foster agricultural development further, numerous policies and programs have been implemented by the government. These initiatives encompass land reform measures, irrigation projects to enhance water management systems, as well as agricultural extension services aimed at providing farmers with valuable knowledge and support. The Ethiopian agricultural landscape confronts obstacles like periodic droughts, soil degradation, taxation burdens, and inadequate infrastructure. These elements contribute to reduced productivity, food insecurity and poverty. To counter these concerns, the government has pinpointed priority areas for intervention, targeting increased smallholder farm productivity and large-scale commercial farm expansion. Strategies include enhancing input access, credit availability, market reach, irrigation facilities, extension services, and land tenure security. Agriculture’s role extends beyond sustenance, propelling Ethiopia’s economic transformation. The Oxford Handbook of the Ethiopian Economy highlights the Agricultural Development-Industrialization (ADLI) approach as Ethiopia’s primary developmental strategy. By amplifying agricultural output and income, the rural sector stimulates demand and supply for urban and industrial counterparts, fostering growth and structural change. Yet, critics note ADLI’s limitations, emphasizing the need to facilitate urban and international demand for high-value crops and value-added products. Amid these dynamics, promising signals emerge. Over the past decade, the sector has achieved a consistent 5% annual growth rate, accompanied by improved productivity. Notably, the government and international donors have bolstered efforts. BIC Ethiopia represents a particularly promising development. BIC Ethiopia is a project that aims to support business incubators in Ethiopia, especially in the fields of agri-tech and agri-business. The project is funded by the European Union and implemented by a consortium of six partner organizations, led by Sequa, a German based non-profit organisation that promotes development cooperation. The project started in January 2022 and will run for four years. The main objectives of the project are: The project strengthens incubators and start-up’s innovating in agri-tech and agri-business. BIC Ethiopia will provide critical tools and resources to unlock the potential of these ventures to create jobs, incomes and sustainable growth. The R&D Group Ethiopia office collaborates closely with Sequas in this endeavour to implement the starter and catalyzer programmes, bringing essential experience. By fostering this ecosystem, BIC Ethiopia can help revitalize and advance Ethiopia’s agricultural industry. The collaborations present a promising path to revitalizing Ethiopia’s agricultural sector, offering valuable insights and avenues for sustainable growth.

By Rahel Dejene APRIL 5, 2023 I have always believed that Africa, including Ethiopia, has been too dependent on aid for the last century. However, while aid can provide necessary resources for development, sustainable growth and poverty reduction require the development of a robust private sector that can create jobs, generate income, and contribute to government revenue through taxes. As a result, for the last 15 years, I have been working towards developing tools and means to stimulate business growth and development in Ethiopia. Unfortunately, and for too long, the private sector in Ethiopia has not been given the credit it deserves. Even though job creation is a pressing issue in the continent, it is generally a by-product of entrepreneurial activities. Therefore, governments must work towards improving the business environment through policy reforms and regulatory frameworks to create a conducive environment for private sector growth. The UN defines development as a multidimensional undertaking to achieve a higher quality of life for all people. Economic development, social development, and environmental protection are interdependent and mutually reinforcing components of sustainable development[1]. Traditional development discourse gravitates between the triangle of the state, civil society, and the private sector as entry points for intervention[2]. In the international development sector and their approach to private sector development, there is widespread recognition of the urgent need for effective entrepreneurial behavior to alleviate a myriad of systemic problems including high graduate unemployment, endemic poverty, economic growth inequality, corruption, excessive bureaucracy, ineffective infrastructure, and a lack of enterprise support mechanisms[3]. According to the African Development Bank, the premier financial development institution in the continent, private sector development is identified as one of its fundamental focus areas to “reduce poverty and support sustainable growth in Africa.” Similarly, the Government of Ethiopia considers the private sector to be a driving force of societal economic well-being as it lays a strong foundation for sustainable economic development. Pragmatic policies are being put in place towards achieving broad-based social and economic development through active private sector participation. Nevertheless, being in transition Ethiopia’s private sector comprises micro and necessity entrepreneurs operating mainly in the informal sector. This group mostly consists of low-productive, low -low-competitive, and largely undifferentiated businesses. This type of entrepreneurship is usually started due to a lack of alternatives and is linked to informal activities, unemployment, underemployment, and poverty[4]. Fortunately, the last decade has shown a growing number of (women and young) individuals who choose entrepreneurship as a career path to secure financial and social stability. Different factors, especially the urge to take destiny into their hand and improved access to modern technology, has influenced the attitude of Ethiopians toward becoming more creative and solution-driven entrepreneurs with unique ideas. The flexible and compact nature of these startups and high-growth enterprises generally makes them the best place to harness innovation. As such, innovative entrepreneurs are disrupting today’s markets, creating an ever-growing chasm between them and their more traditional, established peers. These entrepreneurs can create a pro-growth business environment and instill a spirit of entrepreneurship that can transform the economic infrastructure of Ethiopia [5]. Unfortunately, most of these entrepreneurs face numerous external and internal constraints. Weak financial and internal management capacity, lack of accurate information, poor market linkages, and lack of skilled labor and adequate training leads to many businesses failing to grow. Especially Small and Medium Enterprises (SMEs) – referred to as the “missing Middle” by World Bank’s publications also experience unsatisfactory access to financial resources. In the context of Ethiopia, the majority of financing from commercial banks is forwarded to large firms, while micro-financing institutions cater to micro-loans. This leaves them to search for financing from informal sectors, such as “loan sharks” and family members. At the same time, poor quality of financial statements, lack of skills in business and risk management, the informality of business management, lack of knowledge in business management, lack of awareness on how to be bankable, and lack of adequate collateral hinders them from accessing finance formally. Despite the constraints faced, however, they are key contributors to employment creation and sites of economic diversification and innovation. As a result, more emphasis should be given to boosting innovative SMEs and startups by development aid agencies, government, and private sector actors. Because, if stimulated well, they will become the engine for delivering impacts in terms of employment generation, the country’s competitiveness, creation of backward and forward linkages, greater market access, poverty reduction, and local capacity development in Ethiopia. Relevant stakeholders should make valuable resources available in a more coordinated manner to increase businesses’ willingness to take risks and drive to scale rapidly. As much as access to finance challenges should be solved, entrepreneurs also require access to infrastructure, tailored business development support, access to business networks, industry insights, regulators, data, distribution, process excellence, and new technologies.It is with this knowledge that UNDP in partnership with NBE launched the Innovative Finance Lab (IFL) in October 2022. IFL aims to address the businesses’ challenges and contribute to Ethiopian economic development. It will foster the growth of SMEs and startups to create decent jobs and inclusive economic growth. One pillar of IFL, the Technical Assistance Facility (TAF) was officially launched on the 12th of January 2023[6]. Implemented by R&D Group and MDF, TAF’s pilot program aims to work with 100 carefully selected SMEs that are brought together to learn from one another, develop their internal capacity and accelerate their growth. It mainly focuses on businesses with significant growth potential and job-creating opportunities, that stagnate in their growth due to a lack of technical knowledge and financial resources. Through this comprehensive service, the TAF program aims to maximize the number of enterprises that offer a higher number of decent and gainful employment. While generating wealth for themselves and their families, these businesses will help expand the country’s industrial base to eventually increase foreign exchange earnings, encouraging export and substitute import activities. Since its launch, the TAF program has selected the first 50 businesses from nearly 300 applicants. In three sub-groups, these businesses

Introduction The Ethiopian outsourcing industry has been rapidly growing, thanks to the establishment of the Ethiopian Outsourcing Association (EOA) within the past year. This non-profit civil association plays a crucial role in providing global outsourcing services by representing the country’s leading service providers in offshore outsourcing.  EOA is fostering growth and replicating the success of South Asian countries by keeping Ethiopia globalized enough to attract outsourced businesses and  R & D group has played a crucial role in the establishment and promotion of such an association. The Ethiopian Outsourcing Association (EOA) and its Objectives The Ethiopian Outsourcing Association (EOA) was established by a group of industry leaders, including the R&D group, amidst changing times to boost efforts in attracting foreign investment, creating sustainable jobs, and developing the skills of the workforce. As a non-profit association, the EOA’s primary goal is to provide a platform for public-private relationships and advocacy mechanisms that foster a conducive environment for outsourcing companies and foreign investors.“We can see that it’s going to create an immense amount of jobs, and not just jobs but dignified jobs,” said Wondwessen Zewdie, President of the Association and COO of R&D group at an interview conducted by the ITC. One notable achievement in the establishment of the EOA was the support provided by The International Trade Centre (ITC) through the Netherlands Trust Fund V Ethiopia Tech project. This support included bringing in an international expert to help design the association’s strategy, as part of the ITC’s mission to work with digital businesses and business support organizations. By harmonizing regulations and the tech ecosystem, the EOA aims to attract more businesses and investment to the growing sector. Creating a Conducive Environment To keep Ethiopia globalized and attractive to outsourced businesses, the EOA and its members actively engage with government bodies and advocate for policy changes. By fostering public-private relationships, the association ensures that the necessary regulations, incentives, and support systems are in place to facilitate growth in the outsourcing industry. Harmonizing regulations is a key focus for the EOA, as it helps streamline processes and creates a predictable environment for foreign investors and outsourcing companies. This approach helps Ethiopia align with global standards and gives businesses the confidence to invest in the country. Additionally, the EOA recognizes the importance of the tech ecosystem in attracting outsourcing businesses. By working with tech hubs and business support organizations, the association aims to create a thriving digital landscape that can meet the needs of global clients. This involves providing training, support, and networking opportunities for tech entrepreneurs and professionals. Talent and Skill Development The Ethiopian Outsourcing Association (EOA) is dedicated to bolstering the competence and capacity of the outsourcing sector through effective networks. The association achieves this by establishing an institution that transforms the talent pool into highly skilled professionals. By enhancing existing institutions, the EOA revises frameworks to align with the evolving requirements of global outsourcing ventures. Moreover, the association offers a platform for professionals to connect with other members of the association and foreign investors. This networking opportunity facilitates knowledge exchange, cultivates partnerships, and fosters the growth of the Ethiopian outsourcing sector. Through its strategic initiatives, the EOA is nurturing a skilled workforce and positioning Ethiopia as a competitive player in the global outsourcing market. Marketing Services and Trade Shows The International Trade Centre (ITC) also plays a role in the EOA’s efforts to market services internationally. With a mission to promote business growth, the ITC supports the EOA in showcasing its outsourcing services in foreign countries. By participating in trade shows like GITEX Global and GITEX Africa, the EOA can attract the attention of potential clients and demonstrate the capabilities of Ethiopian outsourcing service providers. Boosting the Ethiopian Economy: R&D’s Efforts to meet the association’s objectives The growth of the outsourcing sector brings significant benefits to the Ethiopian economy. By attracting foreign investment and creating sustainable jobs, the EOA helps generate revenue and improve the livelihoods of the workforce. As outsourcing services continue to contribute to the economy, Ethiopia can enhance its economic growth and development. The Ethiopian Outsourcing Association (EOA) plays a pivotal role in fostering growth and globalization in the outsourcing industry. R&D has been and continues to be a pioneer, playing a vital role in making Ethiopia a more attractive destination for outsourcing companies. R&D’s efforts can be highlighted as such: Developing new technologies and solutions, Providing training and education, Producing research and reports, and Building partnerships Through its advocacy mechanisms, public-private relationships, and marketing efforts, the EOA is keeping Ethiopia globalized enough to attract outsourced businesses. With the support of organizations like the International Trade Centre (ITC), Ethiopia is bringing in resources and making the outsourcing sector a significant revenue generator, contributing to the overall growth of the Ethiopian economy. Visit Our Webiste: https://www.etoutsourcing.com/

Starting a new business is thrilling but securing financing can be a major obstacle for many entrepreneurs. While venture capital and angel investing receive a lot of attention, banks and financial institutions also play a key role in funding startups – especially in developing economies. However, limited collateral and lack of credit history can make accessing traditional business loans difficult for young entrepreneurs and startups. In Ethiopia, securing financing from banks without collateral is especially challenging. But new initiatives are emerging to address this gap. Recently, the Ethiopian Youth Entrepreneurs Association (EYEA) partnered with the Commercial Bank of Ethiopia (CBE) to launch two new financial products aimed at supporting startups. CBE’s new “idea finance” product provides loans to early-stage entrepreneurs and startups without requiring collateral. To qualify, applicants need a patent from the Ethiopian Intellectual Property Agency and a detailed business plan. By removing collateral requirements, this innovative loan product helps get innovative business ideas off the ground. CBE has offered similar financing for over a decade, but uptake has been low. This highlights an opportunity for expanded marketing and education to raise awareness. EYEA and CBE also initiated an advisory service called KENA to provide capacity building and mentorship to young startup founders. Programs like KENA are crucial to setting entrepreneurs up for success by building their skills. EYEA’s networking platform Zelela connects young founders with stakeholders like government officials and investors. These connections are invaluable for securing financing and other support. Zelela conferences have focused on topics from information access to policy advocacy. More institutions should follow CBE’s model and develop creative financing solutions for startups. Alleviating collateral requirements can unlock funding for young entrepreneurs to turn ideas into reality. In Ethiopia, financial technology and digital lending are expanding access to financing for small businesses and startups. Traditional collateral requirements have been a major obstacle, but new digital platforms are using alternative data for credit scoring to provide loans without collateral. Promising Progress Through Fintech Alongside these efforts, financial technology and digital lending are also expanding access to capital for small businesses and startups nationwide. New platforms are applying alternative data and algorithms to provide collateral-free loans. For example, Michu (ሚቹ) from the Cooperative Bank of Oromia leverages artificial intelligence (AI) to assess creditworthiness and offer micro, small, and medium-sized enterprise (MSME) loans without collateral. By removing this barrier, Michu helps address the unmet financing needs of underserved micro and small enterprises. Dube Ale (ዱቤ አለ) from Dashen Bank is another digital credit product reinventing lending by making it more convenient, accessible, and affordable. Customers can get approved for lines of credit up to 700,000 birr based on income and credit history, without collateral. Easy access to working capital can help MSMEs better manage cash flow. Other new platforms like Alegnta (አለኝታ) from Lion Bank also provide collateral-free loans tailored for diverse needs, from rideshare drivers to SMEs. Alegnta’s 500 million birr revolving fund demonstrates growing investment in digital finance. These innovative services showcase how fin-tech is driving financial inclusion in Ethiopia. By using alternative data and digital delivery, lenders can serve MSME segments once considered too risky. Financial regulators should continue updating frameworks to enable responsible digital credit while protecting consumers. Expanding access to finance helps MSMEs and startups invest, create jobs, and build resilience. Digital lending still has room for growth in Ethiopia, but early movers like Michu, Dube Ale, and Alegnta provide promising models for how technology can democratize financing for unserved entrepreneurs. Other countries are also pioneering collateral-free small business financing. In Kenya, microfinance institutions like Kiva leverage crowdfunding and technology to provide low-interest loans. Creative models like these help African startups access seed capital. The R&D Group, in collaboration with UNDP and the National Bank of Ethiopia (NBE), is actively engaged in capacity building for Ethiopian SMEs. As part of their efforts, they are implementing the Technical Assistance Facility (TAF) program, which aims to provide support to innovative small and medium-sized enterprises in Ethiopia. The primary objective of the TAF program is to assist SMEs in growing and developing their businesses while also contributing to job creation and the overall Ethiopian economy. To enhance their support for SMEs in Ethiopia, the Innovative Finance Lab (IFL) from UNDP and NBE have partnered with the R&D Group. This partnership aims to strengthen the implementation of the TAF program, which is a joint initiative between NBE and the UNDP. Through this collaboration, technical assistance will be provided to small and medium-sized enterprises (SMEs) across Ethiopia. Conclusion The challenges of securing financing for startups in Ethiopia are significant, but there are a number of innovative solutions emerging to address these challenges. By leveraging fintech and digital lending, entrepreneurs can gain access to capital that would otherwise be unavailable to them. This is good news for the Ethiopian economy, as it will help to spur innovation and job creation.

Tech companies have banded together to push for policy changes and to market the country as a top outsourcing destination, looking to replicate South Asia’s success in using digital skills to transform the economy. More than 10 tech companies have joined together to form the Ethiopian Outsourcing Association, driven by the firm belief that their industry can create more and better jobs than any other part of the economy. ‘Every member is very passionate about this,’ said Wondwesen Zewdie, president of the new association. The company he co-founded, R & D Ethiopia, has more than 120 employees supporting companies located around the world. He believes that’s just the beginning, with outsourcing poised to bring major changes to the national economy. ‘We can see that it’s going to create an immense amount of jobs, and not just jobs but dignified jobs,’ he said. ‘Our employees get to know technology, they get to know how development works, they get more globalized.’ There are growing pains. Until the association was formed, Ethiopia didn’t have a single license for all outsourcing companies. Instead, they were registered by the specific type of work performed — cybersecurity versus software development, for example. One early result of the association’s outreach to the government is the creation of a new license, the kind of administrative change that makes business development easier, said Tadios Tefera, chief technology officer of MMCY Tech. ‘The association gives us more power when it comes to influencing policy from government and other institutions. Our challenge was previously I would go to a certain ministry to say, for example, we’re having challenges with telecom. We always went to the government to explain how we lose business, and when we lose business we have to lay off people,’ he said. ‘Each one of the association members had a similar experience. When we create an association, we have a more powerful voice and we are taken more seriously than if we speak individually.’ Growing the impact of tech hubs The International Trade Centre (ITC), through the Netherlands Trust Fund V Ethiopia Tech project, supported the association’s creation by bringing an international expert to help design its strategy. That’s part of the program’s mission to work with digital businesses and business support organizations, including tech hubs, to increase their impact. For Ethiopia, harmonizing regulations and the tech ecosystem can help attract more business to a growing sector — key points that emerged during the strategy sessions. ‘This was a three-day course that was very beneficial to us,’ Tefera said. Their strategy boils down to two key planks. Within Ethiopia, they want to create a conducive environment for outsourcing, by engaging with the government to make sure they have the right policies for the industry. The second part is marketing outside of Ethiopia to attract business to the country. Outsourcing businesses here see a model in India, where tech companies turned the country into a back office for global businesses. Zewdie sees outsourcing as a way to create jobs in his country, where 70 percent of the population are youth and eager for decent work. ‘The domino effect is quite big,’ he said. ‘The $4 billion that Ethiopia exports every year, that is an amount that we can generate in the coming years just in this industry.’ About the project The Netherlands Trust Fund V (NTF) (July 2021 – June 2025) is based on a partnership between the Ministry of Foreign Affairs of The Netherlands and the International Trade Centre. The program supports MSMEs in the digital technologies and agribusiness sectors. Its ambition is two-fold: to contribute to an inclusive and sustainable transformation of food systems, partially through digital solutions, and drive the internationalization of tech start-ups and export of IT&BPO companies in selected Sub-Saharan African countries, including Ethiopia.

Outsourcing has become a popular business strategy for many companies around the world. Outsourcing is the practice of hiring a third party to perform services or create goods that were traditionally performed in-house by the company’s employees and staff. It is a business practice that can affect a wide range of jobs, ranging from customer service representatives/ customer support, manufacturing up to the ICT sector to the back office.  One example of outsourcing is when a company hires a third-party vendor to handle its customer service operations. Instead of managing an in-house customer support team, the company contracts with an external call center or customer service provider to handle inquiries, complaints, and other customer-related issues. This allows the company to focus on its core business functions while benefiting from the expertise and resources of the outsourced vendor. This helps enterprises to focus most of their resources on the main activity.  Why business chooses Outsourcing  · Cost savings: Outsourcing can help businesses to reduce their costs by hiring third-party providers that offer lower wages and other operating costs.  · Increased focus on core competencies: By outsourcing non-core functions, businesses can free up their resources to focus on their core competencies.  · Improved access to specialized skills: Outsourcing can give businesses access to specialized skills and expertise that they may not have in-house.  Ethiopia’s Outsourcing landscape In Ethiopia, there are various outsourcing service provider companies that have been operating for over a decade. However, many public and private companies are unaware of their existence, and the government has not provided sufficient coverage for this sector.  In 2020, the formerly Jobs Creation Commission and the now Ministry of Labor & Skills, recognizing the impact of the gig economy, established the Freelancing, Outsourcing, and Gigs (FROG) Taskforce. The aim was to place FROG at the core of Ethiopia’s service sector transformation. A significant milestone in the sector is the recent establishment of the Ethiopian Outsourcing Association, which serves as the representative body for offshore outsourcing services and providers in the country. The association’s main objective is to promote Ethiopia as a global outsourcing destination, while also focusing on enhancing the policy framework and addressing talent gaps within the industry. One of the primary advantages of outsourcing for Ethiopia lies in the creation of employment opportunities. Numerous companies from developed nations opt to outsource their work to Ethiopian companies due to lower labor costs compared to their home countries. This cost differential allows Ethiopian workers to be employed at a more affordable rate, making the outsourcing business model in Ethiopia highly attractive to foreign companies. In addition, outsourcing possesses a distinct advantage over other sectors in Ethiopia due to its minimal resource requirements and conditions. Unlike manufacturing companies that demand substantial capital, equipment, and raw materials, or the tourism sector that necessitates extensive infrastructure and world-class hospitality standards alongside stable peace and security, outsourcing companies solely rely on skilled manpower, computers, and stable telecom infrastructure. As a result, outsourcing emerges as the optimal business model for Ethiopia, offering efficiency and accessibility without the need for extensive resources. Why Ethiopia is attractive for outsourcing  Availability of abundant talent: Ethiopia has a large and young population, with more than 70% under the age of 30. It also has a high number of graduates in STEM fields, with over 200,000 students graduating each year from universities and colleges. over 42% of public university graduates are unable to secure employment after completing their studies. Of these graduates, more than 70% hold STEAM degrees, and considering that over 70% of the country’s population is under the age of 30, there is a significant need for job creation in the IT sector. These talents are eager to learn and grow in their careers and can provide quality services to global clients. Very low attrition rate: One of the challenges of outsourcing is retaining employees who may leave for better opportunities or higher salaries. However, Ethiopia has a very low attrition rate compared to other outsourcing destinations such as India, the Philippines, and China, as its workers are loyal, motivated, and committed to their employers. This reduces the cost and time of hiring and training new staff and ensures continuity and stability of service delivery. Strategic location and time zone: Ethiopia is located in the Horn of Africa, which gives it access to both African and Middle Eastern markets. It also has a favorable time zone, which allows it to work with clients from Europe, Asia, and North America with minimal overlap. This means that Ethiopian outsourcing providers can offer round-the-clock services and respond to customer needs quickly and efficiently. In conclusion: Outsourcing companies can help fill the gap in the employment market for Ethiopian youth talented graduates by offering a stable and competitive employment market. By partnering with foreign companies, graduates can gain valuable experience across industries and technologies. They also stand to benefit from salaries, professional development opportunities, and access to cutting-edge technology. In addition to creating job opportunities, outsourcing companies can boost market visibility and generate revenue for the country, making them an important player in the Ethiopian economy. 

 Africa’s Tech Talent: A Rising Force in the Global Economy Africa Has the Potential to Become a Global Leader in Technology said R&D Group CEO Mrs. Rahel Boon-Dejene GITEX Africa is an annual technology trade show that takes place in Marrakech, Morocco. Renowned as one of the largest tech events in Africa, it attracts a staggering number of over 30,000 visitors from more than 50 countries. This expo serves as a platform to showcase the latest technological innovations, ranging from artificial intelligence (AI) to cloud computing and even 5G. Additionally, the event boasts an impressive conference program featuring keynote speakers from prominent tech companies. The first-ever edition of GITEX AFRICA, which was held from May 31st to June 2nd, 2023, proved to be a resounding success. It brought together a diverse array of innovators, visionaries, and industry leaders not only from Africa but also from around the world. Among the esteemed panelists at this event was Mrs. Rahel Boon-Dejene, CEO of the R&D group, Mrs. Rahel Boon-Dejene shared her thought-provoking discussion on “Positioning Africa as a Net Exporter of Tech Talent. Key takeaways: In her remarks, Mrs. Rahel highlighted Africa’s young and growing population, abundant natural resources, and strategic location as key factors that make the continent an ideal destination for the development of the tech sector. She emphasized the potential of Africa to become a net exporter of tech talent to the rest of the world with the right investments and support. There are successful African tech companies like Andela and Flutterwave as evidence of the continent’s growing tech talent pool. With the right investments and support, Africa could become a net exporter of tech talent to the rest of the world. Mrs. Rahel debunked the misconception that AI would eliminate millions of jobs, explaining that AI still requires human input to be effective. Africa, with its large pool of potential tech talent, can leverage this need for human interaction and position itself as a leader in the tech industry. In addition to calling for investment in the tech sector, Mrs. Rahel emphasized the importance of addressing the challenges hindering Africa from becoming a net exporter of tech talent. These challenges include limited access to quality education, inadequate infrastructure, and a shortage of skilled tech workers. To overcome these challenges and establish Africa as a leading player in the global tech industry, Mrs. Rahel concluded her remarks by urging African governments and businesses to collaborate. She highlighted the need for joint efforts to invest in the tech sector, which would result in job creation, economic growth, and improved lives for the people of Africa. The panel discussion, where Mrs. Rahel Boon-Dejene served as a panelist, received positive feedback from the audience. Her insights were praised by both panelists and attendees, further solidifying the R&D Group’s commitment to helping Africa become a global leader in technology. Here are some specific examples of how Africa is already exporting tech talent: These are just a few examples of how Africa is already exporting tech talent. With the right investments and support, Africa has the potential to become a major player in the global tech industry. Here are some of the challenges that Africa faces in becoming a net exporter of tech talent: These are just some of the challenges that Africa faces in becoming a net exporter of tech talent. However, with the right investments and support, Africa can overcome these challenges and position itself as a leading player in the global tech industry.

Being the biggest event of the Smartsmart Africa and smart Africa alliance, The Transform Africa Summit is an annual forum that brings together African leaders from government, business, and international organizations to collaborate on innovative ways of shaping and accelerating Africa’s digital revolution. The 6th annual Transform Africa Summit was held in Victoria Falls, Zimbabwe from 25-28 April 2023 and has brought in global and regional leaders, heads of state, policy makers,policymakers industry leaders, development ,partners and key players in ICT, aiming to facilitate collaboration between African countries to achieve Sustainable Development Goals through information and communication technologies. The sessions that took in 3 days from the 26th of April revolved around the theme of ‘connect-innovate-transform’ and featured 5000 delegates from more than 100 countries worldwide. Meetings held deep dived in productive dialogs in policy regulation, digital infrastructure financing, capacity building, skills development, data security, and Fintech. Ethiopia’s Role: Ethiopia is going under strict transformation through a comprehensive strategy adopted by the government. The Digital Ethiopia 2025 highlights the need to bring digitization to industries and the public sector, foresee digitalization and achieve digital transformation. As Ethiopians from all over the nation connect to the internet through one streamlined system, digitization in the public sector, such as the implementation of a national ID database, would result in a boost in efficiency. The Smart Africa Alliance is a bold and innovative commitment from African Heads of State and Government to accelerate sustainable socio-economic development on the continent, ushering Africa into a knowledge economy through affordable access to Broadband and usage of Information and Communications technologies. The member countries of the alliance has reached 32 countries, as of April 2023. Ethiopia, the headquarters of the African Union (AU) since its inception in 1963 is yet to join the Smart Africa alliance. Mr. Wondwesen Zewdie, a Co-founder and CEO of the R&D group joined the 6th annual Transform Africa Summit in Victoria Falls, Zimbabwe, as part of the delegate organized by the international trade center (ITC), including industry players from Uganda, Senegal, Kenya, and Ethiopia. R&D Group, one of Ethiopia’s leading Business Process Outsourcing (BPO) companies, is making a significant impact in the industry. The company, which has been operating for over a decade, has established itself as a major player in the outsourcing ecosystem and is now undergoing further expansions to reach more global markets.   Mr. Wondwesen took part in conversations and policy dialogues on how African countries can work together to leapfrog in the digital transformation journey and how digital technologies can be harnessed to accelerate economic growth, reduce inequality, and promote environmental sustainability in Africa.  Along with delegates and country representatives, he shared insights on how technology can be utilized to improve business operations and regional growth. As African countries continue to work together to accelerate their digital transformation journey, the role of companies like R&D Group becomes increasingly important. Their expertise in BPO and digital solutions can help drive growth and create new opportunities for businesses across the continent. The R&D group’s participation in the Transform Africa summit is a testament to its commitment to driving innovation in Africa. As the company continues to grow and expand its services, it is poised to make an even greater impact in the BPO industry in Africa and beyond.