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There is time for all things. Back in 2016, when we first introduced Kapatid Angat Lahat, we saw that for MSMEs to grow and evolve from micro to small, small to medium, and medium to large, they need – in addition to the three M’s of money, market and mentoring – the help of medium and large corporations. We are not talking here of doleouts, but of a sustainable and inclusive way where both parties can benefit and prosper.
As an initiative of the Philippine Center for Entrepreneurship, Kapatid Angat Lahat aims to set the stage and encourage medium and large corporations to help micro and small enterprises by including them in their value chain.
This is not a novel idea. Some companies have already realized the benefit of including in their value chain the small companies that support their operations; that the health of the whole depends on the health of its parts. For close to three decades now, for example, Universal Leaf Phils. successfully turned a moribund tobacco industry into an exporting powerhouse by examining the value chain in its industry, asking itself about the socio-economic structures surrounding the production of its raw materials, how they can help create lesser volatility to farmers’ incomes, and if the tiers before market are adding value.
More recently, technology played a big part in creating a whole new class of entrepreneurs. Ride-hailing apps made entrepreneurs out of drivers and motorcycle riders, enabling them to become their own bosses and take control of their hours and workload. This is thanks to the giant tech companies that developed the apps and telco networks that made data connectivity possible in major urban areas. Again, we see here that if the drivers and motorcycle riders are happy and do well, it means more business for the app and the telcos.
Uplifting small entrepreneurs by giving them a running start is inherent in franchising, as we have seen in how the Philippine Franchise Association has successfully nurtured thousands of budding entrepreneurs over the last three decades. Then you have organizations like Philippine Retailers Association, Philippine Marketing Association and Direct Selling Association of the Philippines, which have helped many people – professionals and entrepreneurs alike – get their start or hone essential skills in any business. At the 2022 MSME Summit, these organizations were among the 37 that committed to the ideals of Kapatid Angat Lahat, and I am truly grateful that they did because the time, I believe, is right for big-brother and big-sister companies to reach out to the small and medium enterprises.
The pandemic, as we now know, accelerated digitalization of MSMEs. Fintech, especially, enjoyed a boom during this time, and it was indeed a long time coming. With the restrictions in movement, people saw how technology could make things like grocery shopping, paying government revenues, and utility bills could be completed without even leaving the house.
Many small businesses were born during the pandemic, not a few of whom capitalized on the advantages offered by technology that were heretofore inaccessible. Digitalization enabled MSMEs to reach more people and made accessible tools like design and advertising through user-friendly templates that easily create professional-looking brand identity. Small entrepreneurs can even DIY a promotional video and then propagate it cheaply over social media. The digital payments systems put buyer and seller closer together, making instantaneous transactions that, no doubt, helped ease the cash flow issues for most small businesses.
These small entrepreneurs are now leveraging what they’ve learned, and they will need more digital tools for other aspects of their operation.
Several startups have seen the potential of the humble sari-sari store, the ubiquitous Filipino neighborhood fixture. Startups are packaging solutions that can increase efficiencies in sari-sari stores, especially when it comes to professionalizing the back-end of the operations, including supply and logistics, inventory management, even automating accounting tasks. We may yet see the mom-and-pop operations scale up within the next few years, further propelling small entrepreneurs to growth and increasing sales for even the large manufacturing companies.
Kapatid Angat Lahat tries to help the MSMEs by encouraging big corporations to integrate them into their value chain. We already have proof that it works. Many big corporations in the country started out this way, supplying to big corporations and in the process upgrading their processes to keep up with the requisites of playing in a bigger field. Some of them have been our big-brother and big-sister companies in Go Negosyo for many years now.
These generous companies are already among us. Agriculture companies like Universal Leaf, Bounty Fresh and SL Agritech are models of how it is possible to include everybody in the value chain, while local fintech companies like Maya and GCash are already cognizant of the limitless possibilities of the MSME sector. The MSMEs are waiting for tech companies for solutions, and have proven that they are ready to try out the tools. Tech companies only need to provide these tools.
The possibilities are limitless when big comes to the aid of the small. It requires an abundance mentality that there is enough for everyone, and that growth will be much more sustained and satisfying, if it is shared with all.