INCUBATING INCLUSIVE COMMUNITY BUSINESSES AS A LONG-TERM RECOVERY SOLUTION
April 2021 – UNDP Thailand; with support of the Citi Foundation, has conducted a program on “Strengthening Community Entrepreneurship and Localizing Social Incubation in the Southern Border Provinces in the Context of COVID-19 Crisis” to assist local-level institutions in creating employment opportunities and income-generating businesses targeting low-income households, women groups, youth, and unemployed persons in the aftermath of COVID-19 crisis by strengthening capacities of local men and women to become community business incubators equipped with skills and knowledge necessary to start or develop their own viable and sustainable community enterprises. The program was designed through consultations among local communities, respective local governments, Business Incubation Center of Prince of Songkhla University Science Park, Citi Foundation, and UNDP. It follows three stages from December 2020 – August 2021:
STAGE 1: Engage key stakeholders to conduct group commitment, team building, and enterprise planning exercise. – UNDP in partnership with Business Incubation Center of Prince of Songkla University Science Park provides technical assistance for locally-based incubators to establish community commitment and governance structure for a community enterprise, conduct baseline livelihood survey among community members, develop product ideas, business and marketing plans, and conduct marketing survey to seek purchase orders from potential customers.
STAGE 2: Develop prototype, provide capacity building, and oversee testing operation – After the planning stage, the program supports local incubators and community members with technical guidance, mentoring process, and seed funding to develop and test product prototypes with targeted market, enhance specific skill sets for enterprise members, and oversee testing operation.
STAGE 3: Oversee scaling operation and impact assessment – the program with Citi Foundation’s financial expertise and experiences in strengthening micro-entrepreneurship will support the subsequent development of community enterprises to scale up operation, design simple financial projections, future scenario planning, and learning networks centred around gender responsiveness, inclusion, and economic empowerment. UNDP with local governments and Prince of Songkla University will support each community to conduct simple socioeconomic impact assessment. This should inform longer-term support for further capacity building and concrete initiatives by respective local agencies.
Since launching in early December 2020 until February 2021, the program has provided technical support and capacity building to five communities through business incubation activities including impact business planning workshop, follow-up mentoring process, and product development and design.
In December 2020, sixteen (16) men and eighteen (18) women from Yala and Pattani were trained in the first incubation workshop at CS Pattani Hotel in Pattani province. They brainstormed and developed business and community ideas using ‘Impact Business Model Canvas’, ‘Simple Financial Model’, ‘Design Thinking’, ‘Risk Management Plan’ and ‘SDG Integration Framework’. Youth and female members of community enterprises were empowered to work alongside and with male members/ leaders to develop community business plans that are inclusive of all gender, ages, religions, and abilities. Apart from that, UNDP has introduced the sustainable development framework which can be integrated into business planning and operation through ‘training the trainers’ workshop for six (6) professional business incubators from Business Incubation Center, Prince of Songkla University.
Human Story Testimony:
“Normally, when we invested 500 Baht producing goods which can be sold at 700 Baht, for us that basically means I am making a good profit. After trying the simple financial model, I realized that I have not yet accounted for my labor or other variable costs incurred along the production and marketing lines. Our curry paste recipes are locally formulated, ingredients are locally sourced, and currently sold within the southern border provinces. Scaling up our business may be done easily through financial investment, but a viable business plan is very important if we want to grow sustainably and exponentially.”
“The course taught us to analyze our strengths and weaknesses and be more comprehensive in planning. Baan Nam Bor has a number of unemployed persons as well as drug problems, so with this new way of thinking and doing things our community can innovate new solutions that suit our skills, culture and ways of life. In this workshop, the facilitator emphasized that we should ‘test ideas with least cost’ in order to make sure we have the right targeted markets. As a student and part time worker, I am a cloth seller, but most of the time I have never really analyze my customers. Apart from that, I like the concept that business can also be a tool to solve social problems. I myself as a young person gained experiences and inspiration from this workshop, am so eager to move our community enterprise forward.”Muhammad Gaddafi, youth member of Khon Rak Nam Bor Textile Producer Group, Baan Nam Bor subdistrict, Panarae District, Pattani Province.
“The workshop is very interactive, we have a chance to try using new tools, brainstorming with community leaders, youth, and food producers. As a local government official, this workshop opened new experiences and perspectives. We can adopt some of them to incubate livelihood groups in our respective areas. Baan Rae Coffee has a long history and traditions, but it cannot be scaled up, does not have standards, so producers should be open for new technology and markets so that they can catch up with fast-changing trends. Value can be added, but ways of thinking and doing should be improved like what we were encouraged to do in this workshop.”Fatimah Puteh, Head of Permanent Secretary Office, Baan Rae Subdistrict Administrative Organization, Than To District, Yala Province.
“As a busines incubation center in the south, we have direct mandates to support community enterprises and SMEs to develop new and current products derived from natural and cultural assets in their own communities. It is critical especially during COVID-19 outbreak, economic decline, and high unemployment rate in the region. From our experiences, the successful community enterprises should have strong leadership, continuously seek for knowledge, and build community engagement. These five community groups demonstrated a very strong determination to develop an income-generating business which benefits their own communities. Most of them want to be self-sustained and engage community members as leading role in their enterprises. It is important that communities are always open to new technology and innovation.”Kanchana Madathawi, Professional Business Incubator, Business Incubation Center, Prince of Songkla University Science Park
In February 2021, this group of well-equipped local incubators began setting up and developing five community enterprises with support from Citi Foundation, PSUSP Business Incubation Center, and UNDP. They are currently following first and second stages of the program implementation.
BAAN THA DAN CURRY PASTE COMMUNITY ENTERPRISE
@Thalokapo Sub-district, Yaring District, Pattani Province
Situated in the coastal plain areas, the lifestyles of community members in Thalokapo subdistrict in the past were tied to land and water. The main occupation in the community for both Thai Buddhists and Muslims is rice farming. Almost every household will have a small vegetable garden for household consumption. Some households make a living by fishing in canals, raising sea bass, black tiger shrimp, and white shrimp. During the past decade, community members came together and founded a community enterprise, Ban Tha Dan curry paste which generated income to community members including youth, women and men, and the elderly. However, the business cannot expand and scale up to include more people due to the lack of sustainable business model and capacity to reach new market opportunities.
In February 2021, the food production and packaging specialist from Business Incubation Center, Prince of Songkla University Science Park visited the Baan Tha Dan Community Enterprise to assess the product quality, production process, facilities, and current business model. The group was advised on how to improve production process and facilities to obtain the food certification standards like GMP and Halal. Curry pastes were tested in the PSU’s laboratory, and found that certain product quality, tastes, and packaging should be improved to prolong the shelf life, upgrade the food safety standards, and meet the wider target markets. PSU and the specialist will work with the community enterprise in the product development and design, while UNDP and Citi Foundation are providing seed funding and technical advice for product testing, market analysis, and business planning.
BAAN RAE TRADITIONAL COFFEE ROASTERS
@Baan Rae Sub-district, Thanto district, Yala province
Situated in the mountainous areas, most of the villagers rely on income from agricultural products such as durian, rubber, long gong, and other fruits with small number of shop keepers and trading service. Due to its richness of natural resources, the local economy in Baanrae subdistrict benefits largely from agricultural business and trading, but most income are concentrated to owners of large-scale plantation and only generated during a few months of each year. Thus, some women groups, youth, and low-income households opted for processing agricultural crops that exist in the area, such as seasoning fried banana, fried durian, durian paste, coffee, etc. to make additional income. The COVID-19 crisis in 2020 decreased the number of visitors to the district and surrounding areas; subsequently, it resulted in less opportunities for them to sell their products to regular visitors.
In February 2021, the food production and packaging specialist from Prince of Songkla University Science Park visited the Baan Rae Coffee Community Enterprise to assess the product quality, production process, facilities, and current business model. Traditionally roasted coffee were tested in the PSU’s laboratory, and found that certain product quality, tastes, and packaging should be improved to prolong the shelf life, upgrade the food safety standards, and meet the wider target markets. PSU and the specialist will work with the community enterprise in the product development and design, while UNDP and Citi Foundation are providing seed funding and technical advice for product testing, market analysis, and business planning.
The program encouraged the communities to ensure participation of youth as both team leaders and beneficiaries in activities with UNDP as well as with their own groups. During the first incubation workshop, youth group and women group from Baanrae subdistrict of Than To district in Yala were invited and learned about impact business model and design thinking. Both groups are coffee roaster producers in the same subdistrict which have separately conducted their production and selling. Since the impact model trained in the workshop portrayed the power of collaboration in making a successful community business, two groups have decided to join forces in developing their common products and business by combining different sets of skills and networks, scaling their production volume, and leveraging with the market.
KHON RAK NAM BOR COMMUNITY TEXTILE ENTERPRISE
@Baan Nam Bor Sub-district, Panarae district, Pattani Province
Situated in the coastal plain areas, most of the villagers in Baan Nam Bor subdistrict in Panarae district of Pattani province have a traditional fisherman’s lifestyle, farming, general employment, and some have migrated to Malaysia for employment. During the recent COVID crisis, around 500 villagers from Ban Nam Bo working in Malaysia returned to the community, about 150 people are from a village with 282 households alone. They no longer have farming or fishing skills. Several villagers rely on income from goat cattle and selling hawk fish to the middleman. Poor families and unskilled youth earn less than 100 Baht per day from unwrapping cockapoo fish. Thus, creating jobs to increase local income and well-being is essential to lighten the burden of community members during this crisis.
In February 2021, Khon Rak Nam Bor Group has gathered and designed how their community enterprise should be inclusively structured with technical advisory from UNDP. The group began to reach out to potential customers in their own communities. The idea of testing was then being implemented through confirmed purchase orders from local schools, product design (pyjamas and school graduation uniforms), and testing with local market consumers.