Promoting inclusive innovation in small and medium-sized enterprises: evidence from Zambia and Zimbabwe

 

Zambia and Zimbabwe are devoting significant resources to the development of small and medium-sized businesses (SMEs), given their importance to job creation, economic growth and poverty alleviation. The two countries have devised and experimented with various innovation support programs to enhance the contribution of SMEs to economic and social development. Thes programs have included policies and services to formalize firms, deepen market and financial linkages, strengthen management capacity, increase access to capital and develop value chains. These efforts are often designed to increase the economic participation of women, youth and groups who have been historically under-represented or marginalized from the private sector. Despite this history, the effectiveness of these programs have not been well studied.

This project, co-led by the Southern African Institute for Policy Analysis and Research (SAIPAR) and Zimbabwe Economic Policy Analysis Research Unit (ZEPARU), seeks to understand the impact of select innovation support programs and analyze them through an equity, diversity and inclusion lens. The team will make use of administrative data provided by Zambia’s Ministry of SME Development and the Zambia Development Agency and by Zimbabwe’s Small and Medium Enterprises Development Corporation. In addition, primary data collection will target SMEs that have benefited from their programs and compare outcomes with a control group.
This collaborative project provides a unique learning opportunity for researchers and innovation agencies in both countries to compare findings and formulate policy responses. Zambia and Zimbabwe are fiscally constrained with competing social and economic agendas. This context elevates the importance of understanding the impact of their SME support programs and how to improve them.
This project received Stage 1 funding through the 2020 Evidence for Innovation open competition and a Stage 2 grant in 2022.