On 31 December 1992, Czechoslovakia was dissolved, with its constituent states becoming the independent states of the Czech Republic and Slovakia. Thirty one years later, and the Czech Republic (known as Czechia) and Slovakia rest at #35 and #42, respectively, on today’s GDP list of ranked country’s (based on IMF’s gross domestic product scores).
It won’t surprise the loyal readers of this blog (all three of them) to hear that I’ve not become an overnight economic boffin. Instead, I wanted to share some thoughts about Czechia and, more specifically, STRIVE Czechia, an initiative I’m working on, which supports small businesses in a country that I knew very little about, until now.
Whilst GDP calculations are not typically an accurate picture of personal earnings, these rankings suggest that individual annual earnings in Czechia and Slovakia are in the ballpark of $31,000 and $23,000.
For comparison’s sake, the UK is ranked at #22 with $46,000, and Burundi is at #192 with $249 (which seems too low to be correct, but I’m not the IMF).
I’ve visited Czechia’s capital, Prague, a few times, first in the late 1990’s, and subsequently in the early 2000’s, and I remember it being a very easy city to get to grips with.
Literally being the part of the world from which the concept of “bohemian” originated, the blend of old and new, of traditional and modern, the city’s architecture, its stylish sweep of cafe-lined streets, cobblestone bridges, sculpted lampposts and spires, the wafts of wine-soaked stews coating the senses – all of these things and more (the beer, for starters!) left indelible watermarks on the memory of my formative years, stepping out and into new adventures.
The countryside, I recall, was like a framed antique painting: colourfully etched, and stuck somewhat in time. Long, empty lanes scoring through forests. Wide open blue skies.
After a dozen years living in Saigon, drinking in these memories is a mental tonic, to the daily cauldron of heat and vapors that epitomizes urban Asia.
Anyway, nostalgia relived. To business. Small business, to be more specific.
STRIVE Czechia is a three-year initiative, run by CARE Czechia, and supported by Mastercard, plus an array of partner entities.
And STRIVE is on a mission quite unlike a CARE International programme of old. Why? Because it is not the poorest, or most vulnerable population groups in the country that STRIVE is solely targeting (a criteria that CARE, for many decades, held up as key).
Rather, this work is about economic gains on a macro level, and it is about growing and advancing the country’s private sector.
As a CARE initiative, STRIVE is focused on MSEs (micro and small enterprises) run by women – it hopes to reach 100,000 women run MSEs, out of a total of 250,000 – but it also has ambitions to support at least 10,000 MSEs led, or owned, by displaced Ukrainian entrepreneurs.
STRIVE’s goals are to positively influence the development of the country’s MSEs because, collectively, they make up 99% of Czechia’s economy, and provide employment for 67% of the country’s population. It is MSEs on whom the Government is reliant, when it comes to inching Czechia higher up in next year’s IMF rankings.
Economic gains made by MSEs will support the wider communities and citizens of Czechia. Economic gains made by MSEs will open up opportunities for young people, as well as those more disadvantaged for various reasons.
A core part for the programme is helping MSEs access and benefit from digitalization, given the current situation in the country, whereby low numbers of MSEs are fully benefiting from digitalization, and where many also lack the necessary proficiencies to utilize digital tools and financial products.
Many also don’t have connectivity with peer networks and face the challenges (as most small businesses do) of juggling responsibilities of work and home life. A dynamic that is of particular resonance for women, given the social norms that place them, over men, in positions of responsibility in the household – the systemic “duty of care” that, the world over, prevents women from advancing at the same pace as men, in terms of earning income and having control over resources.
Whilst the modality of how STRIVE is seeking to intervene in Czechia might, on the surface, seem different to how “development” programmes have in the past been delivered (ie targeting the poorest communities) CARE is not new to engaging MSEs, nor to working in partnership with the private sector to do so.
I’ve written continuously about CARE’s collaborations with business for over ten years now, and the tie-up with Mastercard is fast becoming one of the confederation’s signature partnerships.
As part of CARE’s global commitment to support female entrepreneurs, they have already delivered some fantastic outcomes for entrepreneurs in Vietnam, Peru and Pakistan, as part of the IGNITE Programme – an initiative also supported by Mastercard and seeking to close the digital divide for female entrepreneurs.
CARE’s experience in “financial inclusion” (finding ways of reaching the many millions of people cut off from formal financial services) is deep-rooted and has evolved over the past thirty years.
Bringing some of the world’s largest financiers to the table as part of that, has been essential.
The “Banking on Change” partnership (circa. 2009) between CARE, Plan and Barclays was a watershed moment, both for operationally linking up local savings groups to formal structures, and then for how this partnership lobbied, at an institutional level, for a more unilateral banking “Charter” – supported by the World Economic Forum at the time and influencing multiple other business industries.
Not unsurprisingly, in 2014, Mastercard signed up to the Linking for Change Savings Charter (to give it its full title back then) and have continued to promote linkages, as well as the opportunities that digitalization can bring, in terms of confronting income and wealth inequalities.
Returning to STRIVE Czechia, I look forward to sharing more over the summer, as the second year of activities rolls out, including: the creation of a ‘One-Stop Shop’ facility for MSEs to leverage digital and financial resources; and launching further deep-dive research into the challenges and opportunities encountered by Czechian MSEs. All of which will serve to fine-tune how STRIVE best supports the country’s private sector in the future.
Many of the MSEs already engaged in STRIVE speak of the benefits they’ve accessed from the programme. Plastenco (featured in the youtube clip, below) is a sustainable design MSE, and one of the first wave businesses to collaborate with the STRIVE team – sharing their needs, and optimizing the space that STRIVE is holding for open dialogue between private, public, civil society and academia in Czechia (STRIVE is in discussions with the Academy of Sciences currently, to address some of the multi-dimensional issues about gender, mentioned above).
It is through the collaboration with the likes of Plastenco, as well as the combined time and effort of openly engaging other MSEs, that STRIVE can shine a light on just how critical MSEs are to the country’s future economic and social gains.
In closing, and returning to the intricate connection between Czechia and Slovakia, a recent report by the firm sapie, conducted in Slovakia, is worth highlighting, for comparison’s sake to the eco-system inside which STRIVE Czechia is navigating.
To summarize it, Slovak companies – both SMEs and micro-companies – have a “long way to go to close the gap with the digital frontrunners”. As STRIVE has also documented for Czechian MSEs, Slovak entrepreneurs realise the necessity to digitalize, but lack sufficient knowledge, experience and simple financial tools to be able to fully benefit from digitalization.
Raising awareness in Slovakia, the report concludes, about the benefits of harnessing digital tools and platforms, and demonstrating how such tools can help small businesses to “survive, save money, save time, at least retain their position on the market, as well as increase profitability and competitiveness” are perhaps the very cornerstones required in curating a more robust, and enabling, environment for small businesses and enterprises to function.
This needn’t be very different in Czechia, for MSEs. Each country shares similar economic characteristics and societal constructs.
And it is this, and these areas, around which STRIVE – in partnership with others – will concentrate all of its assets and resources going forward.
So, watch this space!