Private Sector Development
Private Sector Development

MSME Development arrow

Micro-, small- and medium-sized enterprise (MSME) development projects aim to enhance the inclusive growth and advancement of companies, and to address the core constraints faced by MSMEs such as access to finance, entrepreneurial skills, availability of a skilled workforce, and market size. ACT helps businesses by providing advice on strategy, organization, market expansion, and internalization. The techniques and methods applied to these problems are diverse, including capacity-building and the preparation of various analytical documents.

ACT assists MSMEs to become more globally competitive, more regionally integrated, more sustainable, more resilient, and more innovative, all of which enables them to become key drivers of inclusive economic growth.

Strengthening Entrepreneurship and Economic Empowerment arrow

We provide an external perspective on local entrepreneurship environments for our local and international public and private sector partners. By identifying imminent policy changes, we contribute to strengthening entrepreneurship, establishing essential business development services, enhancing financial literacy and management, and stimulating discussion of the possible implementation of new policy recommendations. ACT helps to catalyze economic empowerment by facilitating information exchanges to allow developing countries to learn from the innovations and good practices of developed countries.

Feasibility Study arrow

ACT’s feasibility studies help projects at the initial stage and bring together important elements of expertise, in order to assess whether or not a given project is realizable. Taking all of the project’s relevant factors into account, such as economic, legal, technical, and scheduling considerations, allows project managers to distinguish the prospects and drawbacks of undertaking a project before they invest significant time and money into it.

BSO/BMO Development arrow

Business support organizations (BSOs), also known as business membership organizations (BMOs), can serve as platforms for the promotion of a better investment climate in developing countries, can play an intermediary role between the private sector and the government, and can offer strong representation of the private sector, especially SMEs. . However, in many cases BSOs have not yet attained sustainability and are dependent on donor funding. ACT contributes to the development of BSOs by supporting them to achieve financial sustainability, to improve product development, and to build capacity, all of which will contribute to economic development and growth.

Start-Up Support arrow

ACT works with start-ups and supports them to survive in a competitive environment, by conducting feasibility studies and research-based consulting for them. ACT offers services such as identifying factors that influence growth at each stage of development, assessing the needs of target audiences, and sharing international best practices.

PPP Enforcement arrow

Public-private dialogue is an instrument used by governments, businesses, civil society, and donors to promote private sector development and open governance. Although the concept is not new, it remains a powerful means of promoting the private sector and of ensuring integration of relevant actors with reform processes. Designing policy reforms, promoting better diagnosis of the business climate, as well as transparency and good governance are all among the many benefits offered by PPD.


ACT supports the development of PPD in many forms, forming strong linkages between forward-thinking governments, entrepreneurs, and third parties such as international donor organizations at local, national or international levels. In most cases, facilitating such platforms allows for a more effective response to economic and social challenges, as well as market developments, in the country.

New Market Development arrow

ACT works on projects related to new market development. In this regard, the identification and development of new market directions for the private sector conceptually overlap with the feasibility studies. Ultimately, this product concentrates on the exploitation of new opportunities and the evaluation thereof.


Boosting the effectiveness and expected impact of the private sector as well as of donors, identifying lessons learned, and making recommendations are all among the core services we offer here.

Organizational Development arrow

ACT contributes to organizational development by forming a systematic approach to understand and work with organizational structures, policies, and procedures, as well as human facets such as culture, morale, and leadership. We perceive organizational development as a planned and managed process, intended to improve the performance of an organization; our projects cover a variety of issues that have a bearing on the structural and/or human elements of an organization. Our efforts in this direction include workforce development and working collaboratively to simplify complex systems in order to achieve the goals of the given organization.

International and Domestic Trade arrow

We provide an external perspective to assist projects on international and domestic trade. Simultaneously with the emergence of globalization, trade has become an instrument for growth, creating jobs and economic opportunities as well. ACT enhances international and domestic trade development by promoting inclusiveness, and by addressing trade-related constraints and policy issues affecting the given company. We devise various analytical documents and organize projects on trade as well as offering valuable recommendations and insights.

Product
Our Team
Featured Insights
26.05.2021

Public opinion polls conducted in recent years clearly show the positive attitude of the Georgian population towards European and North Atlantic integration. At the same time, for the last two decades, the Georgian authorities have always confirmed the country's aspirations towards European institutions. Moreover, the current government has loudly stated that the country is preparing to apply for EU membership by 2024. There is an expectation that this promise was made in advance coordination with European partners, which increases the expectation of a positive outcome.


One of the most effective tools for rapprochement with the EU is the Eastern European Partnership political initiative, which aims to deepen and strengthen relations between the EU member states and their six eastern neighbors: Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine. The Eastern Partnership platform, on the one hand, enables countries to join efforts to move closer to European institutions, on the other hand, is an effective tool for the EU to assess countries' progress and plan appropriate policies.


At the same time, the European institutions are actively monitoring the population of the Partnership member states and their attitudes towards both European integration and these institutions themselves. Since 2016, ACT has been actively cooperating with international organizations and monitoring public opinion in the Eastern Partnership countries. One such study was conducted in the spring of 2021, the results of which allow us to draw interesting conclusions about the attitudes and preferences of the population, as well as the different picture in these six countries.


63% of Georgia's adult population is positive about the EU


According to a survey conducted by ACT in all six Eastern Partnership countries in March 2021, the majority of Georgia's adult population (aged 15 and older) is positive towards the EU and, as it turns out, Positive attitude of Georgian population is the highesе among the six Eastern Partnership countries. Interestingly, the number of neutrals is not small either (35%), while only 1% evaluate this institution negatively.


What is your attitude towards the European Union? (%)


Source: Eastern Partnership Public Opinion Survey, 

Sampling Size - 6000 Respondents, March 2021, ACT

 

The majority of Georgia's adult population (76%) trust the EU, regardless of whether they like the institution Interestingly, there are even more people who may not like this European institution, although the fact is, they still trust it. In this regard, the level of trust in the European Union is the highest among the population of Georgia.


The results of the public opinion poll in the Eastern Partnership countries have already been heard in Brussels, at the Eastern Partnership and EU headquarters. It is also planned that by 2024, ACT and its international partners will provide Brussels with the results of a survey of the population of all six countries each spring. Ultimately, time will tell the results of the Eastern Partnership countries in fulfilling their commitments to the European institutions.









Confidence in the EU (%)

10.05.2021

Crisis caused by new Coronavirus accelerated pace of digital transformation even more and forced businesses to include remote work and development of e-commerce into the “agenda”. The other side of the market – consumers remained without digital influence. E-commerce became a replacement or filler of physical shopping for them and presumably, these changes will make deep roots in their behavior and will continue in post-pandemic period as well. However, background of these processes is even more interesting – did every business mange to timely and properly respond to digital challenges, what do international statistics say and what is the vision – did the pandemic landscape of retail trade give businesses time and resources to adapt?


International trends – are businesses ready for digitalization? 

It’s been a long time since change in consumer behavior and their readiness to engage in e-commerce processes became one of the main focus of studies conducted by international organizations. For example, United Nations Conference on Trade and Development (UNICTAD) annually measures B2C e-commerce index, which combines levels of internet consumption by individuals, share of protected internet servers and data on owning accounts in financial institutions. Similarly, International Tele-communication Union (ITU) offers information and communication technologies (ITC) development index [1], which is also oriented on online shopping behaviors of consumers and channels utilized in this process. This list also includes statistical data gathered by Organization of Economic Cooperation and Development (OECD).

If we have a look at e-commerce report called “E-commerce during the COVID-19 pandemic” conducted by OECD in October of 2020, we will clearly see that online commerce is very quickly developing. According to the report, retail sales (orders) made through e-mail and internet in EU member countries increased by 30% in April of 2020 compared to the previous year. Trends are similar in USA, where e-commerce orders increase by 14%-16% (see chart N1). The said report also highlights dynamic development of e-commerce in Europe, Northern America and Asia-Oceania regions in the first half of 2020.

[1] The ICT Development Index (IDI)


Source: OECD, E-commerce during the COVID-19 pandemic, 2020, October. Calculations are based on EUROSTAT statistics. 

UNICTAD report “COVID-19 and E-commerce” published in summer of 2020 shows quite an interesting picture, incorporating experience of 257 companies from 23 less developed countries [1]. Some of the identified trends truly deserve our attention:

  • Fully digital business models (60% of third party online marketplaces) turned out to be more resistant to the pandemic than e-commerce companies that appeared relatively less prepared for new challenges.

  • Use of social media and number of web-pages definitely increased in focus countries. Rapid growth of these sales channels started in the beginning of the pandemic crisis. In this direction, Facebook platform turned out to be particularly important.

  • The pandemic intensified problems previously existing in the ecosystem of e-commerce. Delays in supply chains and logistic processes, absence of internet access appeared to be main challenge for more than 60% of respondents.

  • As noted by more than half of inquired respondents, improvement of e-commerce development policy and strategy is the top priority and needs to be actively handled.

  • The pandemic challenges affected investment capacities of companies in ICT direction. Respectively, company representatives believe that out of all support programs offered by their governments, update of the national e-commerce strategy and its promotion in the society is the most important one.

[1] These countries mostly cover Africa and Asia – Pacific Oceania regions.


Source: UNICTAD, COVID-19 and its impact on e-commerce of businesses, 2020

ACT’s role – experience from even broader geographic area 

The 2020 pandemic and economic crisis enabled ACT through cooperation with different countries and international organizations (EBRD, World Bank, UNDP, USAID) in various projects to contribute globally in increasing sustainability of business sector and identifying pandemic channels affecting them. The said projects enabled us to study e-commerce development issues in focus regions (Caucasus, Western Balkans, South-East Europe, Central Asia and South and East Mediterranean) and do a research on the impact of the pandemic on businesses. As expected, business operating in focus regions shows different types of readiness for digitalization (chart 3). However, regardless of such different results, it is important to mention the overall attitude inquired respondents had in common – small and medium-size businesses have a desire to involve in e-commerce but they hesitate because of lack or complete absence of information and digital tools.


Source: ACT Research, 345 SMEs inquired in Caucasus, 827 SMEs inquired in the Western Balkan region 

Our team had a chance to additionally study challenges of small and medium business operating in Central Asia, South-East Europe and SEMED countries during the pandemic within the scopes of the EBRD-sponsored project “Impact of COVID-19 on small and medium businesses”. As a part of the given study, we asked respondents representing small and medium-size businesses what percentage share of the company’s sales switched to online platforms after the pandemic started. Overall picture is also very interesting, as declared by the majority of small and medium businesses from the listed regions, sales did not switch to online shopping at all, while only a very small part of companies managed full digitalization. Businesses operating in South-East Europe (chart 4) appeared to be the most prepared for such transformations, this can be explained by the fact that logistic services were already well-developed and organized in this region and already established practice of e-commerce.


Source: ACT Research, 570 SMEs inquired in SEMED, 598 SMEs inquired in Central Asia and 184 SME inquired in South-East European region 

Unplanned changes with long-term results 

The new Coronavirus pandemic turned digital development into inevitable reality. When searching for answers, we clearly saw that this seemingly simple way is actually quite complex process and to pass this road, only “desire to digitalize” is not enough. Businesses had to cope with all the problems which already accompanied the process of switching to a new platform: absence of relevant experience, lack of resources or infrastructure. Even though supporting business became main migraine for every government, the majority (more than 50%) of businesses participating in different studies unanimously admit that unfortunately, their government, when working on development of priority sectors, left this part behind and online commerce still remains as unsolved issue.

It’s a fact – digitalization has not entered our lives just temporarily. These are more unplanned changes which will bring prolonged, long-term results.



Author: Lika Goderdzishvili

Portfolio lead, development consulting