Smallholder forest and farm producers make up an estimated 1.5 billion people globally. The collective value of their production of food, timber, non-timber forest products (NTFPs), and biomass energy is valued at up to an estimated US$ 1.3 trillion annually. Additionally, their collective locally controlled forest and farm businesses are thought to create economic multiplier effects and non-market values that increase those overall values tenfold. These businesses are key to growing rural economies and generating rural income.
When managed sustainably, forest-related businesses also help people mitigate climate change. Against a backdrop of falling net global forest cover due mainly to deforestation in the tropics, several countries are bucking the trend. Where forest cover is increasing, such as in China or Sweden, it is cooperative locally controlled forest businesses, which are granted secure commercial rights, that are driving the change. They are making it profitable for their members to grow or manage trees for a wide range of products and services. Thus, locally controlled forest businesses are key to incentivising forest restoration and sustainable management at scale.
Globally there is a gap in support structures for locally controlled forest businesses that could drive forest restoration and conservation and also provide sustainable livelihood incomes for local people. Research carried out on the impact of business incubation on business outcomes finds that survival rates after four years of incubated firms (87 per cent) are double that of non-incubated firms (44 per cent) (Molnar et al., 1997; SBA, n.d.). Impacts on social and environmental outcomes are also likely to be higher, as many business incubators seek to install practices with their clients that go far beyond the single bottom line. Improving access to business incubation services for locally controlled forest business represents a significant opportunity for forest restoration and rural income generation.
Successful forest business incubators (FBIs) are shown to address two key challenges: how to support the scaling-up of sustainable business models, and how to institutionalise that support (beyond typical project cycles). Forest business incubators are better placed to address the challenge of scaling-up — both at the level of enabling individual businesses to grow, but also at a landscape level in the number of businesses they are likely to support. Secondly, they address the problem of how to institutionalise this kind of support (beyond the period of a project) by developing their own financing structures. Enabling sustainable and socially beneficial forest businesses to grow is their core mandate.