APEC Project Database

Supporting Documents

Project Title

Study on the impact and sustainability of inclusive rural enterprises in remote areas

Project Year

2024

Project Number

CN_SMEWG_103_2024

Project Session

Session 1

Project Type

Standard

Project Status

Concept Note

Project Number

CN_SMEWG_103_2024

Project Title

Study on the impact and sustainability of inclusive rural enterprises in remote areas

Concept Note Status

Approved In-Principle

Fund Account

General Project Account

Sub-fund

None

Project Year

2024

Project Session

Session 1

APEC Funding

70,000

Co-funding Amount

Total Project Value

70,000

Sponsoring Forum

Small and Medium Enterprises Working Group (SMEWG)

Topics

Micro, Small and Medium Enterprises; Agriculture; Market Access

Committee

SOM Steering Committee on Economic and Technical Cooperation (SCE)

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Peru

Co-Sponsoring Economies

Canada; Chile; China; Korea; Philippines; Russia; Thailand

Expected Start Date

01/08/2025

Expected Completion Date

31/12/2025

Project Proponent Name 1

José Enrique Velásquez Hurtado

Job Title 1

General Director of Monitoring and Evaluation

Organization 1

Ministry of Development and Social Inclusion

Telephone 1

5116318000

Email 1

jvelasquez@midis.gob.pe

Project Proponent Name 2

Not Applicable

Job Title 2

Not Applicable

Organization 2

Not Applicable

Telephone 2

Not Applicable

Email 2

Not Applicable

Declaration

José Enrique Velásquez Hurtado

Project Summary

The purpose of the study is to generate evidence based on primary and secondary information that allows different instances of the APEC member for decision-making regarding the improvement of the livelihoods in households in subsistence economies in remote areas.

Since it has been identified that Households with rural subsistence economies have limited opportunities to access local markets. Likewise, it has been identified the low capacity for small enterprises to prosper in rural areas.

Likewise, it is proposed that that supports public policy decision-making in favor of the productivity and sustainability of rural productive enterprises, mainly based on family activity in order to achieve strong growth, balanced, safe, sustainable and inclusive of all people in APEC member economies.

Finally, it seeks to know the elements of the most important social, cultural, economic and geographical contexts that influence and/or determine the creation, implementation and sustainability of inclusive rural enterprises in the economy.

Relevance

Issues

Entrepreneurship is a crucial driver of micro economic growth, especially in rural and poor areas. Rural entrepreneurs have less capital of their own and they have difficulties accessing to formal insurance, banks and other sources of financing that are not very expensive. Despite this social issue, worldwide there is are few statistics that show number of rural people engaged in small business, even less in the APEC economies.

According to World Bank Statistics, rural percentage of rural population in APEC economies varies between 8 % (Japan) up to 87 % (Papua New Guinea). However, small and medium enterprises are the engines of growth and innovation in the APEC region. They account for over 97 percent of all businesses and employ over half of the workforce across APEC economies.

Nonetheless, there is little evidence of impact evaluations of social interventions that aim small business. For example, according to the systematic review of Banerjee & Duflo (2012)[1], rural enterprises face many challenges, difficulties and barriers that limit their productivity. In this sense, most micro-entrepreneurs are not fully committed to the goal of maximize their earnings because it wouldn't be worth dedicating all their energy to achieve it. This fact may explain the disappointing results of the training programs that seeks to increase rural productivity through rural enterprises.

Due to the aforementioned, it is fundamental to study the factors that limit the sustainability of rural enterprises. What does the literature say about rural ventures with poor populations, specifically about the challenges of market access and sustainability? What public policy recommendations must be taken in accounts in order to design this type of interventions, based on the problem it seeks to solve and the available public policy options? How much of that literature has been taken into account in the design of these type of program? Investing resources in improving the quality of life of the people who manage these areas will ensure that the APEC economies to contribute in the generation of employment in rural areas leading to better development.

Eligibility and Fund Priorities

The project meets the eligibility criteria because the study scope is relevant to the APEC economies, its objective is aligned to the APEC forum (Putrajaya Vision 2040 and APEC 2024 Priorities), and its modality is a case study (research). The results of the project could lead to policy recommendations to improve the economic and social well-being of the rural people living in the APEC economies through the design and the implementation of public interventions that seeks the sustainability of rural enterprises. In this sense, this project is aligned to The GPA funding priorities for 2024, specifically by “affirming an equitable and inclusive future for all”.

Capacity Building

The results of the project are transformed into “policy recommendations[1]” to improve the economic and social well-being of the rural population living in the APEC economies through the optimization of public interventions that seek the sustainability of rural companies in the APEC area.

To this end, the project complies with the following principles:

(i) In the long term: the “policy recommendations” will constitute a methodological guide to design or redesign policy interventions to improve the effectiveness and sustainability of rural enterprises in APEC economies;

(ii) Driven by needs/opportunities: the “policy recommendations” allow increasing opportunities to improve the domestic economies of rural households in APEC economies.

(iii) Internal and regional replicability: The “policy recommendations” may be used and/or replicated throughout the rural areas of the APEC member economies.

(vii) Inclusivity: The “policy recommendations” are aimed mainly at households in rural areas; it is expected that the recommendations will have gender and intercultural components.

(v) Transparency: the project will be carried out by independent consultants;

(vi) Innovation: the “policy recommendations” are expected to lead to better practices in implementation and new approaches to solve existing problems of the rural population in APEC economies;

Finally, the “policy recommendations” will be disseminated in the various instances of the central, provincial and district governments through workshops and seminars in person and virtually. Also, it is planned to prepare a document that details the research, as well as the methodological note prepared and the policy recommendations derived from the study.

[1] The term “policy recommendations” is one that describes the type of recommendations linked to the design, implementation, modification or change in the different tools of public policy, projects, interventions, programs, plans, sectoral, or multisectoral public policies.

These recommendations are present in the “Policy Brief” or brief policy document, which is constituted as a document that synthesizes the evidence on a particular topic and is characterized by emphasizing the practicality of the knowledge generated from an investigation in a specific context and with clear recommendations.

[1] Banerjee, A. & E. Duflo (2012). “Poor Economics. A Radical Rethinking of the Way to Fight Global Poverty”. New York: PublicAffairs.

Objectives

The objective of the study is identify, analyze and assess the most important elements and factors that significantly impact decision-making regarding rural and remote areas of the APEC economies, both in favor of the development and success of rural enterprises and those that do not allow their optimal development and sustainability.

Alignment

Alignment to APEC

The project is aligned directly with the APEC objective[1] “Trade and investment for inclusive and interconnected growth”. Furthermore, the project is linked to the Putrajaya 2040 vision by recognizing the importance for the Asia-Pacific region to focus its efforts on a strong, balanced, secure, sustainable and inclusive growth. This is because the study's target population commonly faces difficulties accessing social services and infrastructure and has lower employment rates.

The project aims to generate policy recommendations based of evidence that allow policy makers to design and start up public interventions that improve the rural productivity in remote areas. In the long run, it is expected to promote economic growth that encompasses various sectors of society, including the most vulnerable (for example, rural population), by promoting interconnection, inclusion and guaranteeing sustainability. Indirectly, the project is aligned with the APEC objective “Innovation and digitalization to promote the transition to the formal and global economy”, by the promoting the formalization of rural businesses, and the objective “Sustainable growth for resilient development”, by promoting food safety.

At the meeting of the leaders of APEC economies in 2023, they set the goal of advancing sustainable and inclusive economic policies, ensuring that they also address environmental challenges. For this purpose, is necessary to build public policies based on rigorous evidence.

Alignment to Forum

According to the current SMEWG Strategic Plan 2021-2024, the proposed project will be engaged to the Priority Area “Entrepreneurship, innovation and start-ups”, specifically with the objectives of (i) “improved business environment for start-ups and entrepreneurs”; (ii) “Promote entrepreneurship and business development opportunities for youth and female entrepreneurs and amongst traditionally disadvantaged communities”; and (iii) “Promote social entrepreneurship”.

This study of rural households that participate in productive enterprises, mainly based on family activities, emerges as a crucial component to promote inclusive growth. Understanding the complexities surrounding these small businesses not only contributes to the creation of more accessible and competitive environments, but also triggers a positive impact on the sustainable development of communities. It is also important to mention that inclusive growth goes beyond economic figures; It involves the active and meaningful participation of all people. Addressing this issue can be synonymous with an engine of progress.

[1] https://apecperu.pe/2024/ and https://www.apec.org/press/news-releases/2023/peru-spotlights-social-dimension-for-its-apec-2024-priorities#

Methodology

Work Plan
No.	Start From		Finish By	Activity	Deliverables �
1.	01-08-2025		28-02-2026	Delimit the sample of study. Apply the survey	Methodology paper Survey form
2.	01-08-2025		28-02-2026	Construction of the survey and instruments.	Survey form
3.	01-08-2025		28-02-2026	Meeting with stakeholders	Preliminar report
4.	01-08-2025		28-02-2026	Field work	Preliminar report
5.	02-03-2026		31-05-2026	Cleaning data	Preliminar report
6.	02-03-2026		31-05-2026	Writing a report	Preliminar report
7.	02-03-2026		31-05-2026	Analysis of results	Preliminar report
8.	01-06-2026		30-09-2026	Report on public policy interventions on households that participate in rural productive enterprises, based mainly on family activity	Final report with results.

Beneficiaries		Direct beneficiaries - Users: Households that participate in rural productive enterprises, mainly based on family activity. Indirect beneficiaries - Rural economically active population - Rural micro and small enterprises (MSPE) - Technical staff of the Ministry of Development and Social Inclusion and Ministry of Agrarian Development and Irrigation of the APEC member economies. - Technical staff and officials of the APEC member economies. - Policy makers of the APEC economies. - Research centers and university students of economics, law, etc.
Evaluation		- Field work: Number of surveys applied (divided by gender). - Analysis: Report approved by all partners (inclusion of gender approach in the Analysis). - Intervention proposal: proposal of intervention project approved by all partners and inclusion of gender approach in the project. - Diffusion: Number of seminars and diffusion events of the project results.
Linkages		This study could take into consideration information and the participation of various public and private organizations (MIDIS, FONCODES, and MIDAGRI of Peru) that work in favor of rural productive enterprises, mainly based on family activity.

Are there any supporting document attached? (Please do not include supporting documents at the Concept Note stage)

Project Number
Project Title
Concept Note Status
Fund Account
Sub-fund
Project Year
Project Session
APEC Funding
Co-funding Amount
Total Project Value
Sponsoring Forum
Topics
Committee
Other Fora Involved
Other Non-APEC Stakeholders Involved
Proposing Economy(ies)
Co-Sponsoring Economies
Expected Start Date
Expected Completion Date
Project Proponent Name 1
Job Title 1
Organization 1
Telephone 1
Email 1
Project Proponent Name 2
Job Title 2
Organization 2
Telephone 2
Email 2
Declaration
Project Summary
Relevance
Objectives
Alignment
Methodology
Are there any supporting document attached? (Please do not include supporting documents at the Concept Note stage)
hdFldAdmin
Previous Fora
Secretariat Comments
Endorsement By Fora
PD Sign Off
Forum Priority
Committee Ranking Category
Committee Priority
PDM Priority
Priority Within Funding Category
PMU Field 1
PMU Field 2
PMU Field 3
On Behalf Of
APEC Budget Approved in Principle (US$)
Approval Status
Attachments

Content Type: Standard Concept Note