Youth and Private Sector
UNDP Mongolia has been successful in establishing partnerships with the private sector through building on UNDP’s comparative advantage in building local capacities for enhanced social inclusion of vulnerable groups among youth and women and less developed communities and tackle environmental challenges. The examples of partnerships make UNDP Mongolia as the leading agency in development partnerships with extensive experience over the past decades. UNDP’s partnerships with private sector support an inclusive economy. Inclusive business models create win-win situation for all stakeholders. The partnerships between UNDP and businesses create both social and business impact, which cultivate a healthier growing economy.
Supporting youth employability – Activated 2030 and Mongol Enterprising Adventure
Since mid-2017, UNDP Mongolia has been using a “Design Thinking” approach and “Behavioral Insight Methodologies”, in undertaking activities to understand the entrepreneurial mindset of young Mongolians. An initial activity guiding UNDP’s work has been scoping and establishment of the baseline. The baseline study, results of which are presented in this report for discussion, is based on the “General Enterprising Tendencies” (GET2) test, administered through an interactive website www.activated.mn. The five enterprising tendencies measured by the GET2 test are: “need for achievement”, “need for autonomy”, “creative tendency”, “drive and determination” and “locus of control”6.
Obtaining a representative sample from youth across the country, several important characteristics were identified. The average overall score of the enterprising tendencies was low to medium, with the average score being 34 out of 54. Female participants scored higher than males, whereas males were more likely to identify as an entrepreneur than females. The ”need for autonomy” was the lowest scoring factor for both young men and women, and “creative tendency” was the highest. The GET score of participants increased with age, as well as level of education. Nine out of ten participants are optimistic about their future earning potential. However, nearly one in three agree that within their peers, new ideas are seldom implemented. Those who seek advice or help from a relative had significantly lower GET scores than those who do not.
To complement the digital test, a series of focus groups were held in Ulaanbaatar, where the experience of young Mongolians who identify as an entrepreneur were explored and mapped using Empathy and “User Journey” Mapping tools.
The results of the digital survey, together with the focus groups and desktop research identified eleven key findings:
1. The concept of entrepreneur, entrepreneurship and enterprising are new in Mongolia and do not directly translate into Mongolian language;
2. Young people in Mongolia have low to medium enterprising tendencies;
3. Practical skills and knowledge are lacking;
4. Networks are weak;
5. Challenges around trust exist;
6. A mindset gap exists between older and younger generations;
7. Failure is not accepted as part of the learning experience;
8. Access to capital is a barrier;
9. The legal environment is not conducive to enterprising activities;
10. The education system does not actively support the development of enterprising skills;
11. The government is not considered an enabler.
This work has highlighted the need to support the development of enterprising tendencies and skills in Mongolian youth. Approaching youth income generation through an enterprising lens as opposed to a purely entrepreneurial one, offers an opportunity to address several SDGs simultaneously. Improving the enterprising tendencies, skills, behaviors and activities of young Mongolians, can increase income generation choices. Whilst supporting those who pursue self-employment, it also enables those who become employees to be more successful in getting things done and overcoming challenges. Similarly, the five enterprising tendencies are essential in active citizens who can meet their own needs and create sustainable, resilient communities. These findings and the suggested approach have implications for a broad range of stakeholders. UNDP Mongolia is seeking partners to continue the design, testing and implementation of behavioral interventions to increase the enterprising tendencies, skills, behaviors and activities of young people in Mongolia. This work provides an opportunity to drive a transformation in the way entrepreneurship is used in addressing development challenges.
Private sector participation- Sustainable Cashmere Value Chain Pilot
UNDP’s Country Investment Facility 2018-19 is a catalytic fund for growth and business development of UNDP Country Offices to diversify partnerships. The Facility targets areas of visionary interest and innovation, looking at novel approaches to digitalization technology and modernization that underpin UNDP’s work. In June 2018, UNDP Country Office in Mongolia was awarded with funding by the Facility to implement a project to address pastureland degradation while encouraging inclusive business through greater engagement with the private sector. The project accelerates SDG1 (No Poverty), SDG2 (Zero Hunger), SDG 8 (Decent Work and Economic Growth), SDG10 (Reduced Inequality), SDG13 (Climate Action) and SDG15 (Life on Land).
The project comprises three components, each of which plays complementary roles in achieving the overarching project objectives. These components are:
a. Implementation of a pilot project to test the viability of a value chain business model for sustainably produced cashmere (“Sustainable Cashmere”) in Khentii and Dornod aimags in March and April 2019;
b. Development of a roadmap to build a common understanding of Sustainable Cashmere by engaging all stakeholders to increase the private sector investment in Sustainable Cashmere; and
c. Establishment of a funding window for an investment facility to crowd in private capital in Mongolia’s livestock and agricultural sector to promote consistent supplier-buyer relationships that result in climate resilient pastureland management.
This concept note explains the objectives, inputs and value additions by UNDP, its partnering organizations, intervention areas and timelines of the first project component (Piloting the Sustainable Cashmere Value Chain Business Model in the Eastern Region).
A viable value chain model hinges on its ability to address barriers to demand. As such, UNDP plans to develop a value chain model that addresses the following buyer-facing challenges:
a. Inadequate traceability of Sustainable Cashmere, resulting in buyers’ lack of confidence in authenticity
b. Perceived quality deficiency of Sustainable Cashmere, which results from inadequate capacity of herders to sort and process Sustainable Cashmere for quality
c. Strong presence of private traders offering attractive prices and financial arrangements in a highly competitive market, resulting in herders’ high defect rates
d. Difficulty in effectively marketing Sustainable Cashmere to end-customers
The pilot attempts to assess the operational viability of a value chain model that entails solutions to these challenges. They are:
a. Deployment and utilization of an IT platform that offers an enhanced traceability functionality;
b. Provision of value-adding input such as herder training on gathering and sorting for quality Sustainable Cashmere; and
c. Provision of incentives for herders/suppliers in producing and processing quality Sustainable Cashmere.
Piloting the value chain model with these features, UNDP aims to generate insights into the model’s scalability opportunities and challenges and its developmental impacts.
UNDP inputs and value additions
UNDP is currently discussing with stakeholders various ways to address these buyer-facing challenges through:
a. Assessing the value addition of blockchain functionality that builds on existing IT system tracing animal health, pastureland management and livestock commodity;
b. Identifying ways through which herders and/or intermediaries can add a process to comb and sort Sustainable Cashmere for quality improvement;
c. Identifying the optimal combination of incentives to keep herders committed to the agreements made with buyers prior to the harvest season;
d. Providing support for marketing on Sustainable Cashmere
UNDP envisages that this pilot will produce insights into Sustainable Cashmere market growth. Dissemination of the discovered knowledge will benefit development partners, private sector firms, industry associations and governments.
This is a project directly implemented by UNDP Mongolia County Office and as such, it will leverage the capacity of existing organizations. They are (in an alphabetical order):
§ Agricultural co-ops
o Operate as a collective entity to improve members’ access to the market. UNDP will work with selected agricultural co-ops to leverage their marketing capacity when relevant.
§ Bagh governments
o Maintain relationships with herders. UNDP plans to work closely with bagh governments of the intervention areas.
§ Green Gold Project (GGP)
o Began implementation of its training programmes in the eastern region in recent years. Also, GGP is developing an IT platform (Multi-Commodity Traceability Platform (MCTP)) that allows for greater traceability of a wide range of livestock commodities and successfully piloted it in the goat meat market. UNDP plans to coordinate closely with the GGP team.
§ IT software company
o In order to build an additional functionality to the existing IT platform, UNDP plans to work with an IT software company in close coordination with other organizations that develop and maintain animal and pastureland conditions and livestock commodity data.
§ Mongolian Wool and Cashmere Association
o A key organization that connects wool and cashmere companies in Mongolia. Advice from the Association will be solicited prior to, during and following the pilot.
§ Pasture User Groups (PUG) and Community Based Organizations (CBO)
o Received trainings on sustainable management of pastureland from the GGP and UNDP. UNDP will build on development partners’ efforts.
§ Soum Governments and MOFALI
o To ensure effective coordination at the national, regional and local level during the pilot and subsequent applications of the knowledge to the cashmere sector growth strategy and data consolidation, UNDP will coordinate with all levels of governments.
§ Sustainable Fibre Alliance (SFA)
o Is among several organizations that certify Sustainable Cashmere. When relevant, UNDP plans to work with SFA, particularly given that SFA’s emerging partnership with Khan bank.
§ Wildlife Conservation Society (WCS)
o A key NGO promoting wildlife conservation in Mongolia. WCS conducted a study assessing the feasibility of the Sustainable Cashmere project in the eastern region through extensive field interviews.
Intervention areas and expected output
5-10 tons of Sustainable Cashmere collected from 200-400 herder households in approximately seven baghs. It is tentatively planned that three baghs in Tsagaan-Ovoo soum, two baghs in Nolovrin soum, and two baghs in Bayan-Uul soum will be engaged