Accelerating and incubating business for the SDGs, A Q&A with Artak Melkonyan, COO of UNDP SDG Innovative Finance
By Marley Tinnock
Social enterprises and impact ventures are critical to the achievement of the SDGs, offering innovative technological solutions and sustainable business models that address the numerous social and environmental challenges we face today. But how can we support their set-up, scale-up and successful operation?
This week, as UNDP Geneva welcomes the finalists of two business acceleration and incubation initiatives to pitch in front of potential investors and impact partners – through Accelerate2030 and the Growth Stage Impact Venture Initiative, we consider what role UNDP plays in facilitating business growth for the SDGs. Whilst in fact, UNDP has many avenues for exploring innovation for the SDGs, the direct involvement of the UN has been limited in scope thus far, including mostly network linkages and training.
Ahead of his presentation on October 9 - Boosting SMEs Acceleration Efforts in Developing Countries, Artak Melkonyan,Chief Operating Officer, UNDP SDG Innovative Finance (UNSIF), explains to us how UNDP taking the next step toward helping entrepreneurs from around the world, bring their innovation to scale and support a sustainable future for all.
What is an ‘accelerator’ and an ‘incubator’ and why are they important?
Business incubators and accelerators aim to prepare companies for growth by providing guidance and mentorship at different stages in the life of the business, with an aim to accelerate sales, operations, and investments. To that set of goals, impact accelerators add-up straightening and scaling of social, environmental and other impacts.
UNDP considers impact venture accelerators as one of the practical approaches to help businesses to both become SDG impact aligned and offer solutions directly addressing SDG challenges, hence contributing to the vision of engaging private sector in the 2030 Agenda.
What is UNDP doing in this space?
UNDP has experimented with initiatives related to business venture accelerators infused with impact in the context of SDGs. While these pilot initiatives have implementation, particularities designed to meet the needs of country environments, they have been built on a set of universal fundamental elements. Those include prioritizing impact along with business performance, defining impact in the context of SDGs, using well-structured curriculums followed by advisory and mentorship inputs to stimulate and implement innovations, scale up business and along with its impact and align business processes to align with SDGs.
UNDP through its new global initiative – Financial Service Hub (FSH) is focused on introducing service lines that aim to support enterprises at different growth stages by intensifying and enhancing innovation for sustainability and SDG impact. While those services could relate to wide range of private sector players, UNDP’s impact accelerators target start-ups, companies in the growth stage and as well as established SMEs.
After piloting acceleration programmes in Armenia and Denmark, UNDP has replicated those models in several other countries worldwide currently having operational accelerators also inIndonesia, Philippines, Turkey, Serbia, Philippines and planning new ones in Singapore, Thailand, India, Moldova, Ukraine etc.
ImpactAIM is an accelerator that works with social enterprises and impact ventures at the growth and early growth stages. The accelerator prioritizes the ventures that contribute to the mission and programmatic priorities of the UNDP CO in Armenia.
The SDG Accelerator works with SMEs with a strong SDG and business potential for a ‘6-month innovation journey’. The accelerator uses sustainable innovation to create replicable business models for the profitable integration of the SDGs.
As the notion of private sector includes businesses at various stage of their maturity, each of the models better fit one of those clusters. In general, ImpactAIM is better suited to address start-ups, ventures in early growth or growth stage, while SDG Accelerator is built to primarily address established companies but may also be effective to the companies in the growth stage.
UNDP’s impact venture accelerators should be distinguished from UNDP’s AcceleratorLabs - a recently announced initiative of UNDP in 60 countries. Those approaches are complimentary but different. AcceleratorLabs are specialized in exploring solutions for sustainable development through innovatively structured processes in wide range of domains. Whilst impact venture accelerators primarily target solutions economically feasible for businesses and implemented by private sector.
What does UNDP provide exactly?
Conceptually, an impact accelerator combines business acceleration with robust dedicated efforts for social innovation and SDG impact alignment, including impact measurement and management practice.
Impact venture accelerator supports the impact ventures by:
Aligning business growth strategies with impact scaling approaches;
Helping to–define, parametrize and target impact in an SDG context;
Providing understanding and access to developing country markets;
Sensitizing Impact Story of Impact Ventures - verbalizing and visualizing impact;
Assisting in fundraising & pitching with impact Investors, including focused coaching.
In the set-up of impact accelerators, the major success factor is harmonized combination of impact and business guidance. Hence, in those settings UNDP plays the role of catalyzer and impact expertise source, while business expertise is sourced in through established business accelerator or VC fund e.g. in ImpactAIM Indonesia our partner is 500Startups, a prominent global VC firm.
How do events like the SDG Finance Geneva Summit play in supporting UNDP’s efforts?
SGS Geneva is a global platform for knowledge exchange. It’s here that all the stakeholders – impact investors, financial institutions, development and humanitarian actors and entrepreneurs can come together and learn from one another about the successes – and failures, of their own journeys.
Not only does the event encourage learning, but it’s also a match-making forum that could quite possibly lead to a successful venture’s next steps toward globally addressing the SDGs.
In 2016, after successfully participating in the first acceleration in ImpactAIM Armenia, education venture, Dasaran was selected as a finalist in the first annual Accelerate2030 – an initiative for start-ups. Today over 1 million users now using their cloud-based education platform and they target the markets in Africa and South-East Asia.
So what’s next?
A number of UNDP COs are following either ImpactAIM or SDG Accelerator models in setting up venture accelerator operations or are planning similar set-ups to be implemented in the coming few years. In almost all these cases, the impact accelerator is considered to be an integral element of wider programs e.g. in Indonesia the accelerator is to be part of larger Innovative Finance Lab; and in India the accelerator will be targeting women related impact ventures and will be an element of CO’s wider gender related initiative.
The UNDP Global Center for Technology, Innovation and Sustainable Development (GCTISD) is working on setting-up an impact venture accelerator in Singapore with a quite special context – building on and piggybacking Singapore ecosystem it plans to create a platform structure for finding, developing and scaling SDG impact targeting venture level solutions for developed and developing countries.
Our team, UNDP SDG Innovative Finance (UNSIF), also works on developing a facility to support impact accelerators and combine them into a network of interconnected, complimentary and synergizing elements. The facility will serve as a knowledge and resource centre as well as cross-border solution transfer medium to catalyse scaled impact.
Overall plan is to continue expanding the network of impact accelerators globally through partnerships with major stakeholders working at convergence of business and impact investment ecosystems.