Sources of Ethiopian Agrodealer Enterprise Resilience
Explore how resilience capacities at the enterprise level promote resilience for critical market system actors in response to a shock.
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Current literature on resilience focuses on how households cope with shocks, with an increasing recognition that market systems play a vital role in supporting household resilience. While this has led to a growing focus on system-level resilience capacities, research is limited on the resilience capacities of micro, small and medium enterprises (MSMEs) that operate at the interface between households and broader agricultural market systems. Building on the current literature, this project aimed to identify and explore resilience capacities at the enterprise level to increase the understanding of what promotes resilience for critical market system actors, such as agrodealers, to continue to address the needs of a market system during a shock such as COVID-19.
Objectives and Research Questions
The objectives of this independent research project were to develop a framework to guide understanding of what makes MSMEs resilient to shocks in low resource environments (such as lower- and middle-income countries), and to assess the relevance and usefulness of the framework by using it to evaluate the resilience of agrodealer MSMEs in the Amhara and Oromia regions of Ethiopia, where the COVID-19 pandemic had substantial impacts on the availability of farm inputs.
This study aims to answer two main questions:
- What characteristics and behaviors of MSMEs support resilience to shocks such as COVID-19?
- Can assessing the resilience of agrodealer MSMEs in Ethiopia provide useful information for agricultural development programming in shock-affected contexts?
Methods
To inform the understanding of the impacts and responses to the pandemic-related disruptions to input markets in Ethiopia and comparable resilience countries, the researchers conducted a comprehensive desk review of existing literature regarding the impacts of COVID-19 on resilience, agrodealer MSME’s resilience capacities and enterprise resilience.
From the desk review, the researchers constructed a framework for MSME resilience that identified behaviors and characteristics of enterprises that would support agrodealer MSMEs’ resilience. They then developed a quantitative tool to assess whether the framework and resilience capacities provide insights into variations between different types of agrodealers. They engaged local data collection firm Frontieri Consult to implement a face-to-face survey of 385 agrodealer MSMEs in the target regions, and then analyzed the results to draw conclusions and generate recommendations for agricultural programming in Ethiopia.
MSME Resilience Framework
Following the desk review, the team identified five domains of enterprise resilience to focus the assessment of MSME resilience capacities:
- Connectivity.
- Cooperation.
- Business Strategy.
- Evidence-Based Decision-Making.
- Entrepreneurial Orientation.
Key Insights
- Future studies should calculate “scores” for each domain (rather than an overall resilience score) and explore whether behaviors and characteristics associated with certain domains contribute more to resilience over others for various types of enterprises.
- There is a need for further research into and testing of appropriate measures for entrepreneurial orientation.
- Future studies should consider the domains of MSME resilience when designing programming approaches and activities that aim to build the resilience of agricultural and food systems.