Supporting the empowerment of entrepreneurs to drive economic growth through job creation has been at the heart of the vision of my organization, Mowgli, ever since its inception in 2008. Having cultivated an alumni network of over 1680 mentors and entrepreneurs across the MENA region over the last eight years, we set out to quantify the economic impact that entrepreneurial mentoring can have by answering a key question that accompanies all investment decisions, and one that we, as providers of intangible services, seek, and yet, struggle to quantify: what is the return on investment for those who invest in mentoring as a component of human capital or capacity development?
From the impact data that we have collected from our entrepreneurs and mentors over the past eight years, we recently published a pioneering report to showcase our findings, which have been overwhelmingly positive. These results serve as evidence as to why investing in entrepreneurial mentoring needs to be a key cornerstone of any entrepreneur-serving ecosystem or support initiative to create sustainable economic growth, close the large unemployment gap and achieve a greater return on investment for those investing in this area.
International governments, financial institutions, philanthropists and corporate pioneers are predominantly the leading investors in mentoring within the MENA region. To date, there has been little visibility into whether or not their investments have generated any real and significant economic impact. Mowgli’s analysis highlights that investors have and are realizing real and significant Return On Mentoring Investment (ROMI) across the MENA region, through the economic return achieved by the sustainable creation and safeguarding of jobs; with an average ROMI of 890%.
Interestingly, of all the investments made, the greatest ROMI comes from the creation of new jobs rather than the safeguarding of existing jobs. In addition, Mowgli entrepreneurs have created and safeguarded over 3,470 jobs since 2008, which has generated and contributed over US$18 million to the region’s economies. Here are some of the key takeaways from our report:
1. Mowgli's holistic mentoring programs achieve significant returns for investors in MENA entrepreneurship
Mentoring that focuses on supporting both the business and personal aspects of the entrepreneur is key to ensuring the greatest ROMI, as compared to other support initiatives such as business skills training and financial support. Mentoring clearly needs to be a key cornerstone of any entrepreneur-serving ecosystem or support initiative.
2. Developed and harmonized entrepreneurial ecosystems enable higher ROMI
Geographies that have a developed and entrepreneur-serving ecosystem enable higher job creation levels than those that do not. The safeguarding of jobs, however, is an imperative need and achievement within these areas.
3. Capability - Interference = Success
The ROMI performance is strongly correlated to the Capability – Interference = Success formula. When capability levels are low to medium and interferences, both extrinsic and intrinsic are high, lower returns are to be expected.
4. Investment in equals ROMI out
Reduced investment in programs leads to a significant reduction in the ROMI achieved, due to core elements being marginalized.
5. Values-based project management ensures greater ROMI
Project management with aligned values and commitment to adhering to Mowgli’s program milestones is critical to optimizing the relative success of the program. Programs managed by third parties have typically produced lower returns.
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The Imperative Need for Entrepreneurial Mentoring
There is an imperative need for entrepreneurial mentoring, as Mowgli believes that it is five to ten times more difficult in the MENA region, due to the level of interferences both intrinsic (core spirit, hope, confidence) and extrinsic (culture, society) that restrict entrepreneurs from moving forward.
Whilst informal mentoring relationships between friends and family members are reasonably commonplace, true and focused holistic entrepreneurial mentoring is still in its infancy.
Mowgli believes that to effectively empower entrepreneurs in breaking through these challenges and barriers, the following steps are needed:
1. More investment needs to be dedicated to ensuring the quality of the mentoring that is offered to the entrepreneurs, through the training and preparation of mentors, effective mentor-entrepreneur matching as well as the facilitation of the ongoing supervision and support of the mentoring relationships, especially during the first year, to ensure the right foundations are built for long term engagement.
2. More attention needs to be paid to the short and long term financial and non-financial benefits that entrepreneurial mentoring offers, as a core pillar of human capital/capacity development.
From the analysis and report, it is evident that by investing in holistic entrepreneurial mentoring to complement other entrepreneurship support initiatives, one maximizes the return on investment. The results are based upon the data collected from the entrepreneurs during and at the end of their one-year Mowgli supervised and facilitated mentoring relationship. It does not include that which is created or generated afterwards. We can only assume that, like the entrepreneurial curve, it will increase exponentially as the foundations have ben set, enabling further ROMI to be realized.
Unemployment and sustainable economic growth continue to be some of the MENA region’s biggest challenges. By conducting and sharing this analysis, we look forward to engaging with those within and outside the MENA region who wish to further recognize entrepreneurial mentoring as a key component of human capacity development within the entrepreneurship ecosystem, alongside the likes of business skills training and financial support, and achieve even greater results.
To read the full report which contains more details about the analysis, takeaways, country ranking, research methodology and much more insightful information, click here.