THE BULGARIAN EXPERIENCE

United Nations Development

Programme

Ministry of Labour and Social Policy

Local Public Private Partnerships

What is JOBS?

• Joint MLSP/UNDP business support model promoting sustainable employment

• Viable network of 39 Business Centres (BCs), 10 Business Incubators (BIs) and 5 window offices across Bulgaria

• Timeframe: 2000 – 2006

• Overall budget: US$ 20,669,520

Overall objective

To support the growth of micro and small businesses throughout Bulgaria in order to

create long-term sustainable jobs and boost local economic development

The key partners

• UNDP: developed JOBS model, advocated for its adoption as national policy, supports and monitors implementation

• The Bulgarian Government: serves as project implementation agency (MLSP), integrated JOBS model into national policy, provided 96% of project budget

• 44 local municipalities: closely involved in BC/BI establishment and development, provide non-financial and financial contribution to project implementation

• Over 200 local companies: closely involved in BC/BI establishment and development; actively participate in the BCs initiatives; closely involved in the process of financial and non-financial services delivered to the entrepreneurs

The JOBS methodology

• Establishment of BCs on the basis of public private partnerships

operating as locally-based NGO; founding members: public and private sector partners; facilitating the dialogue between the public and the private

sector.

• Local ownership: management of the NGO through the local partners

• Broad partnership between public and private interests: guarantees that the BCs will adequately serve the entire community

Main project phases

• Inception: integration of successful UNDP business

support models (2000) • Demonstration: JOBS project implementation (2001-

2002)

• Streamline with the ALM policy: project expansion as part of national policy and consolidation of new components (2003-2004)

• Exit strategy: development of capacity to ensure BCs viability through a national association of the BCs (2003-2006)

Lessons learnt: Carefully select target areas

• Assess the assistance absorption capacity of the target communities

• Initial approach to establish business service providers in remote and underdeveloped communities could not always ensure the desired impact

• Selection methodology revised for project expansion based on lessons learnt

• Criteria refocused to identify active communities committed to local development: places that have basic capacities in place and entrepreneurial potential to make full use of project intervention

Lessons learnt: Viability vs. Sustainability

• Major consideration since project outset, ingrained in project methodology

• A variety of mechanisms put in place to prepare BCs to function independently within a timescale of three to four years

• Emphasis on enhancing BC ability to generate revenues and attract external resources

• Experience shows that 100% cost-recovery from services may be un unfeasible target, if it creates a conflict with BC developmental mission

• Currently BCs organizationally and financially viable, combining a variety of income sources

Challenges: Exit strategy

• Exit strategy designed as early as second year of implementation

• Development of adequate tools and capacity to ensure BC viability and implement exit strategy

• Gradual reduction of project subsidy: – 100% in the first year, 70% in the second year, 40% in the

third year, 20% in the fourth year• BC association established (2003) to take over key strategic

functions long term and ensure continued impact• Government committed and willing to use BC capacity

beyond project end

Key success factors

• Strategic long-term support from the central and local governments

• Local ownership: reliance on local resources, development of human capital and capacity

• Flexibility to adapt and stand up to new challenges• Networking between the BCs to maximize the

strengths of scope• Partnerships with a broad range of players

Key risks

• Balance between mission and viability• Capacity of local stakeholders to adequately

support and provide strategic guidance to BC development

• Sustained impact: need to stay in touch with the local reality and respond to emerging new needs in the community

• Capacity of the BC association to safeguard capacity, build on achievements and advocate for micro and small businesses on a policy level

Things to remember

1. Start small and slow, adjust, show results and then fund raise for larger amounts of money

2. Hire the appropriate staff (risk takers, pro-active, committed, well respected in the community)

3. Provide hands-on assistance and the necessary mechanisms for business support

4. Establish strong local and national partnerships

5. Balance between servicing the original target group and surviving as an NGO