PART I.A. SITUATION ANALYSIS A.1. The current market for Business Development Services

B. 2 Strategy for the use of AEP resources

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  As part of preparatory phase, a market study will be conducted to evaluate the demand for services, analyze the capacity of providers and investigate (due diligence) potential partners. Also, a feasibility study for Business Incubators will be contracted.
  

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  Pilot business service centres and incubators will then be launched in a number of provinces, utilising a variety of methodologies, and delivery mechanisms.
  

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  After 18 months the pilots will be assessed. Successful experiences will be extended and expanded throughout the country according to available resources.
  

The BDS component seeks to replicate successful Incubator models in other countries, but which are adapted to the needs of Angolan micro, small and medium enterprises. BDS centres and BIs should be organized as part of a network, working together to strengthen Angolan enterprises, and contributing towards the reduction of unemployment and poverty.

Two Business Centres, focussing on small and medium size enterprises, will be launched, 1 in Luanda and 1 in a Province to be determined by the market study. UNCTAD will provide the benefit of their experience with more than 50 business service centres around the world, supported by technical assistance from SEBRAE/Brazil, who has already worked with the Angolan government in this area. The pilots will initially focus on ‘Training of Trainers’, with the participation of experienced Angolan professionals, employees of the centres, and international consultants. UNCTAD will monitor and guide the activities of the BDS component until sustainable local capacity has been established.

After the pilot phase new BDS centres will be installed - one per year - in selected geographic areas creating a national network of public and private BDS providers that will be able to offer updated expertise. These Business Centres will act simultaneously providing services for entrepreneurs as well as delivering "on-the-job" training for BDS providers. It is anticipated that in the first three years, these business centres will train a total of 3,200 entrepreneurs, and advise and certify 50 BDS providers on updated methodologies, through the use of established training techniques and counselling tools. In accordance with available funding, by the 5^th year the centres are expected to have trained 7,200 entrepreneurs, while 120 new or renewed BDS providers will be certified in updated methodologies.

For micro and informal enterprises the CEFE methodology, will be used, as experiences in other countries has demonstrated its effectiveness in training entrepreneurs with low levels of literacy. An Angolan NGO will be selected by the market study, according to its capacity and understanding of the micro-enterprise sector. International consultants will be utilised to train the NGO in the effective use of this methodology.

After 18 months, the results of this pilot will be evaluated. Should it be considered a success, special attention will be given to a Training of Trainers strategy, working in conjunction with local NGOs, in order to guarantee a rapid expansion of CEFE licensed teachers throughout the country.

In Angola, there are a sufficient number of individuals with entrepreneurial vocation and innovating projects with a commercial potential that would justify supporting new ventures. Based upon the results of the feasibility studies, two Business Incubators will be established.

In this pilot, the incubator is installed, planned, led, directed and monitored by a university. Its objectives usually include technology transfer to industry and commerce, revenue generation from consultancy, research and development, and the fostering of spin-off companies. Management functions may be sub-contracted. It is usually owned by the university and is based in or close to the campus.

In this pilot, a public institution is a partner with other institutions, agencies or local groups, including local government, community organizations, commercial developers and professional bodies. Many legal structures are possible (e.g. NGO, Foundation, etc.). The overall objective of the partnership model is the local and regional economic development and the fostering of enterprises.

The tenants will have to pay for their private space and also cost-share for common spaces (offices, meeting room, etc.). The price of the rental fees should be increased each year as to guarantee a "healthy" environment, where tenants that enter the Incubator will "graduate" as successful entrepreneurs and leave room for new tenants. Experience shows that 80% of tenants, when the selection process has been applied, begin to generate income within the second year of incubation. A key aspect that is to be considered in the proposed market-study, is the price of the initial rent. This should be a realistic price for the target market.

The project depends upon the motivation and commitment of the national counterparts, in order to implement and manage the BDS component in a successful manner. It is expected that these counterparts will make available to the beneficiaries of the program, entrepreneurs and BDS providers who are under going a learning process, the best of their support capacity. Therefore, the BDS component makes the following assumptions:

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   INEFOP Tangible Inputs
   

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  A "focal point" office with a dynamic and professional Manager that will interact with the Program Coordinator of the program on all strategic and implementing aspects, such as logistical arrangements for the agreed activities, promotional actions, etc.
  
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  Secretarial/ Administrative support for the "focal point" office.
  
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  Office space, including basic equipment (furniture, PCs, telephone, fax and photocopier)
  
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  Communication lines (telephone, internet, fax).
  
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  Access to appropriate training rooms for all planned workshops.
  
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  Two or three offices for business counseling activities.
  
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  Maintenance (cleaning, security) for all areas to be used by the Program.
  
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  Training materials for workshops, produced locally, and sold to trainees when possible.
  

2. 
   INEFOP Non-Tangible Inputs
   

These centers will target mainly micro and informal business entrepreneurs. This important segment of the Angolan society should feel that these centers offer supportive environments for their initiatives.

1. 
   Tangible Inputs Of Licensed CEFE Centers
   

2. 
   Non-Tangible Inputs of Licensed CEFE Centers
   

a) Host Counterpart

-The institution selected should have a clear understanding of the need of this kind of initiative, and should offer as a minimum: i) business space, ii) an environment that stimulates creativity and innovation, iii) clear terms of acceptance and permanence of users, iv) support for the solution of micro and small enterprises problems.
INEFOP has shown interest in establishing a BI in one or more of their Centres, where synergies can be created among the clients of vocational training, users of BDS, and tenants of the BI facilities. INEFOP has offered their Centre in Viana (a municipality close to Luanda and a Industrial Park) for the implementation of a pilot-project that later could be replicated in other Centres around the country.
b) Management

-Most of the success of an Incubator is based on the identification of an appropriate Manager for the Incubator. The manager has overall responsibility for the planning and day-to-day operations of the Incubator.

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  The tenant selection is a critical aspect for the incubator success in order to guarantee the migration of the enterprises to the "real-world-stage" within the agreed terms of time (3^rd year on average). Emphasis should be given to the "entrepreneurial" profile of the candidates and the commercial possibilities of his/her project/enterprise.
  

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  Space: The tenants will have approx. 50 sqm. each, to install necessary equipment and to develop their products/services. They also will have at their disposal a common room for meetings with clients and suppliers, a cafeteria and rest rooms.
  
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  Facilities: The tenants will also have, water and electricity for the normal operations of their enterprises, as well as fax, telephone, computer and photocopy machine.
  
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  Administrative Assistance: The Incubators will provide to the tenants, assistance in the administrative and legal organization of their enterprises, formulation of their business and marketing plans, and promotion of their business.
  
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  Financing: As it is reflected in the corresponding budget, they will be expected to financially assist the tenants in the acquisition of technical equipment (e.g. by leasing). However it will be important to create a seed capital fund that could financially assist the enterprises with small loans for initial expenditures. This will depend upon availability of funds.
  

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  The results of the Market Study will be disseminated.
  
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  2 or more BDS centres functioning.
  
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  A Business Plan will be prepared for increasing the number of potential BDS providers.
  

Upon conclusion of the project it is expected to have a MSMEs strategy in place, effectively reaching formal and informal entrepreneurs in the rural and urban areas. Staff, trainers and counsellors working in public and private BDS outlets will have been trained in updated and tailored methods for Angola, and prepared to work in a competitive basis.

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  7,200 entrepreneurs will be trained from which 750 will have received special business development services (counselling) in 7 Business Centres located in Luanda and other Provinces. 50% of participants will be women entrepreneurs.
  
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  A small group, 350, of these entrepreneurs, will have received support to become ready for profitable linkages with large companies.
  

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  7 associations and/or formal groups of micro, small and medium enterprises will be created, one per each Business Centre.
  
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  A least two Business Incubators will be assisting 60 (30 each) promising companies.
  
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  By the end of the project, training material and experiences will have been made available to most of the suppliers country-wide. Know-how from UNCTAD/SEBRAE and CEFE will be transferred and expanded to selected local experts and institutions.