This p
age lists some of the most interesting recent blog posts on Private Sector Development and related issues. It gets updated regularly and aims to show the insightful things people are talking about right now. Let us know if you have any suggestions on what should be included, or any comments on the blogs.
to contact the DCED Secretariat
The bottom of the period (BoP) approach notes that the poorest in society are potentially both significant economic consumers and producers. It sees a win-win situation, where businesses can improve their performance and help the poor, by offering employment and selling tailored products. In a recent public debate 'The 'Bottom of the Pyramid' Approach: Responsible Capitalism or Business as Usual?' in Oxford, this and the counter-argument was compared, that businesses are not committed to the approach, continue to exploit the poor and do not add value (as the products are often luxuries and jobs provided are low-value). The debate was part of a wider new project by the Centre for New Economies of Development to look at the evidence for and against the development value of the approach. With this in mind, two recent blogs that challenge the counter-argument are particularly interesting- Caroline Schramm looks at the poor as producers and Grant Tudor shows how BoP products can be life-changing.
- Caroline Schramm on the Business Innovation Facility’s Practitioner Hub- A Clear win for Responsible Capitalism. Caroline Schramm reviews the debate, and is critical of the ‘Business as Usual’ argument, argues that it hasn’t noted the many new initiatives incorporating the BoP approach. In particular she focuses on the BoP approach helping the poor not just as consumers, but as producers, suppliers, workers and distributors, in inclusive business models. She argues that the BoP approach creates jobs, and that these are often high-value and high-skill jobs. Companies have an incentive to, and increasingly are, train up their staff and develop staff skill in order to increase staff productivity and motivation. She offers some examples of this and notes how organisations, such as the Business Innovation Facility, are supporting this process.
- Grant Tudor on NextBillion.Net – Ripe for Innovation: Democratized Diagnostics for the BoP. Grant Tudor looks at two new health diagnostic products designed for poorer consumers. ‘Diagnostics for all’ is a new tool to test liver health, developed by a social enterprise in India. It is the size of a postage stamp, comes with no equipment, and is cheap enough to make and sell to make it a sustainable product for the social enterprise and affordable for the poor. He notes that its design also makes it particularly useful for people far away from clinics, as it quickly provides a diagnostic itself rather than requiring a sample to be sent off to a lab. Project Masiluleke, noting the stigma many men in South Africa feel in going to a health centre to take an HIV test, have packaged together an at-home HIV test. This new design has had to be consumer-oriented, with a focus on affordabilty, accessibility, ease of use and compelling desirability. These two innovative products help show how BoP oriented products can address vital needs of the poor. Grant Tudor also notes that the diagnostics offer product ‘democratization’, moving information, and the tools to produce information, away from centralized bodies to individuals.
Added: 11 May 2012
Development Value of Public-Private Partnerships (PPP) – Two recent blogs posts assess the importance of PPPs for development and poverty reduction. Whereas Jane Nelson powerfully highlights the value of development partnerships, Porter McConell questions how much they directly help the poor. Notably, both refer to the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) PPP to back up their views.
- Jane Nelson on USAID.gov - The Power of Development Partnerships.
Jane Nelson highlights why PPPs are increasingly popular, and what corporations can get out of the partnership: donors can help businesses overcome market failure (such as by providing training or funding research) and governance gaps in developing countries, and also improve corporate capacity for operating in developing countries and external relations. She notes obstacles for PPPs, next steps and the importance of innovative financing partnerships. Successes are most evident in three areas: partnerships focused on specific issues or products (e.g. the Global Alliance for Vaciness and Immunisation), project-based partnerships and country alliances that build national governance capacity (e.g. SAGCOT).
- Porter McConnell on Oxfamamerica.org- What if we held a private sector initiative and nobody came? Porter McConnell challenges the optimism around PPPs in development. Porter notes a report by the German Marshall Fund’s Translatlantic Experts Group, which highlights key problems with SAGCOT. One, private companies are not investing as much as expected, which in turn questions the use of public funds to leverage them. Secondly, SAGCOT seems to benefit large agri-businesses over small scale agriculture producers. As such Porter McConell argues that SAGCOT, and potentially other PPPs, are unlikely to be pro-poor.
Added: 26 April 2012
Two articles in the Economist and Guardian review increasing MNC attempts to support development needs in low and middle income countries. Though Kyle Peterson notes positive developments in how the health sector is addressing its consumers, the Economist takes a more critical view, focusing on worker conditions.
- On Economist.com- When the jobs inspector calls. Do campaigns for “ethical supply chains” help workers?
The Economist reviews worker treatment in supply chains over the last twenty years, and the effects of the ‘ethical supply chain’ movement that has targeted prominent brands such as Nike, and, more recently, Apple. Though supply changes have improved in some areas, most notably in regards to forced and child labor, significant issues still remain. The article suggests that new measures such as codes of conduct and factory audits don’t come quality guaranteed. Significant improvements in supply chain standards may require firms to go even further, to share more wealth down the supply chain and move away from just-in-time supply models.
-
Kyle Peterson on the Guardian Sustainability Blog- Healthy competition can save lives through shared value. Kyle Peterson blogs on a recent event hosted by FSG and GBC Health for around 100 pharmaceutical and medical device company representatives and global health stakeholders. He notes a shift in the attitude of health sector companies to development needs- away from a focus on philanthropic giving and towards supporting such needs as a core business activity. He notes three mechanisms for this. Firms are developing their products to make them cheaper and easier to use, reconfiguring their value chains and strengthening local health systems.
A number of new PSD approaches have been emphasized recently in the blogosphere, in part following from the recent Skoll World Forum on Social Entrepreneurship and also from ongoing criticisms of microfinance.
- Ignacio Mas and David del Ser on Worldbank.org- A Perfect Storm for Social Enterprises? Ignacio Mas and David del Ser note the growing popularity of social enterprises, which they suggest might become the next big development trend and take the mantle from insufficiently flexible and adaptive microfinance. They note several important trends within social enterprise: the importance of technology; the manner in which social enterprises both compete and collaborate with other social enterprises at the same time; and a growing business trend to consider socioeconomic as well as financial success, especially in business schools.
-
Jonathan Glennie on the Guardian’s Poverty Matters Blog- Is sustainable local development a persuasive alternative to microfinance? Jonathan Glennie notes the growing criticisms of microfinance and concern over lack of proof that it reduces poverty. He asks though what can replace it and how to better help poor communities, and highlights an approach from Milford Bateman, that for the development of a local private sector, strong local government support is needed. From Europe post world war two, to Vietnam currently, this local administrative support has been key to local private sector success/ In contrast, the buildup of a large NGO microfinance sector can be to the detriment of state capacity.
Added: 3 April 2012
Erinch Sahan on the From Poverty to Power blog- What have we learned from trying to help poor farmers use markets better? Erinch Sahan provides an analysis of the philosophy behind Oxfam’s livelihood and market programmes. He notes the different aspects of Oxfam’s work and argues that Oxfam’s work is not based on just one model. Rather it draws from many models, and adds its own ideas, to help focus its programmes specifically on the poorest, while keeping them context-relevant. Linda Jones, from the Coady Institute’s International Centre for Women’s Leadership, in a comment, agrees that in complex situations, one approach is unlikely to resolve all issues. Practitioners tend to use the models as starting not ending points, making toolkits still useful. The key issue, she notes, is to find ways to be flexible and to take the best from each approach.
Added: 30 March 2012
Public Private Partnerships (PPPs) are becoming increasingly important within development. They were significant topics of the 4th High-Level Forum on Aid Effectiveness in Busan and the recent World Water Forum, and will be addressed at the upcoming Rio+20 conference. With this in mind, two interesting posts are highlighted:
-
Zack Taylor on USAID.gov - In Senegal, Response to Nature’s Call Gets a Clean Makeover. Zack taylor outlines an impressive PPP between USAID and Coca-Cola to support community-led total sanitation in southern Senegal. With funding from Coca-Cola and technical support and delivery from USAID, the project has invested in new sanitary facilities in rural areas, such as straw covered latrines and, to encourage hand washing, ‘tippy tappys’. Results have been significant, with large community support and big drops in the incidence of diarrhea and malaria.
Added: 30 March 2012
- Grant Tudor on NextBillion.net- Welcoming the 'Zeronauts': Pushing Problems Toward Zero. The author notes that though increasingly businesses are aiming to embed sustainability in their operations, further concerns. These include that businesses could be supporting sustainability in words over action, and that though businesses may aim to make their operations more efficient, they would still remain polluting. This matches a concern of Ulrich Hoffman in ‘Some Reflections on Climate Change, Green Growth Illusions and Development Space’ that current moves to green growth may not be enough to combat current climate change threats. It is suggested a new paradigm for businesses is needed. As such the author interviews John Elkington and highlights his new initiative ‘Enter, the Zeronauts’, an attempt by a number of enterprises working towards “zero: zero pollution, zero poverty, zero pandemics, zero population growth and zero nuclear proliferation.”
Added: 15 March 2012
-
Scott Gilmore on the Globe and Mail: Poverty reduction depends on entrepreneurs, not aid: The author argues that the private sector, while once seen as a necessary evil, is now "recognised as the main means of sustainable economic growth". He notes that aid agencies are increasingly "funding mechanisms to make markets more efficient, to connect local exporters to global buyers, and to provide finance to small and medium-sized businesses.” He concludes that "sooner than we realize, the future of aid will be no aid. Other than urgent humanitarian assistance, donors will no longer be needed or wanted, as entrepreneurs in such countries as Liberia and Haiti create what donors cannot: prosperity
."
Added: 12 March 2012
Two recent blog posts discuss partnerships between NGOs and big companies to achieve development goals.
- Christine
Sraver on Business fights Poverty: Out of
poverty and into profit: Are development partnerships a force for good?: Christine Sraver of Care International UK describes the reasons why Care is partnering with Barclays to help poor people get access to financial services: "The private sector is key – (...) it is important that
the big ones like Barclays come on board (...). Why? Because, in addition
to their responsibility to truly serve the markets where they are
present, they operate at a scale that NGOs could not even dream of." While mutual learning and cooperation is required to make such partnerships work, the author reframes concerns about development organisations
loosing control if business takes new development models to scale. On the contrary, she asks" as NGOs, shouldn’t our job be to help put in place systems that
Governments, local civil society and - yes maybe also - the private
sector can take forward?"