Economic Opportunity for the Poor through the Private Sector: Learning from Experience
People prefer the dignity of working their own way out of poverty, rather than depending on charity. The private sector can generate the jobs and economic opportunities that enable people to do that. Private Sector Development (PSD) is defined as the range of strategies that aim to establish markets that function vibrantly and fairly, providing economic opportunities of quality to poor people at scale.
Donors and multilateral agencies are increasingly placing PSD at the heart of their work. The Donor Committee for Enterprise Development (DCED) enhances these efforts by facilitating exchange and sharing information about what works – based on practical experience and evidence on results. DCED members agree as their vision to make the DCED:
“the independent and respected inter-agency point of reference for knowledge, data and agreed standards on the role of the private sector in development”.
The DCED has developed a substantial body of knowledge and lessons learned – as summarised on its websites. Together, the DCED’s knowledge portal on PSD at Enterprise-Development.org and platform on Market Systems Development at BeamExchange.org have attracted over 400,000 page views in the last year alone (Nov 2020 – Nov 2021).
The main DCED website includes a wide range of resources on all major PSD approaches and themes – for example on Industrial Policy, Employment Creation and Small Enterprise Development. The website is constantly updated to address emerging member priorities, for example Increasing opportunities for refugees or Innovative Finance. A particular focus of the DCED is to make knowledge easily accessible to busy readers in member agencies and the field – including through a growing library of short document summaries and synthesis notes on PSD approaches. The website also serves as a central repository of current PSD policies of donor agencies.
With PSD a priority in most agencies, policy makers are keen to learn about what works and what does not. A focus of the DCED is therefore to communicate data on results in PSD – by listing credible ‘impact stories’ that report impact at scale; organising robust field-level and academic evidence in an overarching results chain – the DCED ‘Evidence Framework’; and publishing on current research and evidence. In addition, the BEAM ‘Evidence Map’ compiles evidence on results from market systems development programmes.
News on PSD is regularly communicated through the DCED Newsletter, twitter and Linkedin. The DCED also offers webinars on member experiences in different PSD approaches and results measurement, which can be accessed on its Youtube channel.
Consisting of representatives of its members, the Annual Meeting is the DCED’s highest governing body, approving the formation of thematic groups as well as annual work plans, and defining the DCED’s strategic direction. It decides on applications for membership and elects the five members of the ExCo including the two Co-Chairs. Documentation of previous Annual Meetings can be viewed here.
The Executive Committee functions as the board of the DCED, providing oversight of the thematic groups, as well as support and guidance to the DCED Secretariat in the implementation of the DCED’s work programme. It takes all decisions which are not reserved to the Annual Meeting. The Co-Chairs in particular provide strategic and policy overview for the DCED. Click here to view the profiles of all ExCo members.
Working groups are set up to tackle specific issues in private sector development of importance to DCED member agencies. They serve as a forum to identify effective practice or promising new approaches in a defined field, and provide a space for networking for member agency staff. Currently, the DCED has six working groups covering the themes of Results Measurement, Business Environment Reform, Market Systems Development, Private Sector Engagement, Green Growth, and Women’s Economic Empowerment. Click here for an overview of the achievements and activities of each group.
The Secretariat implements the strategy of the DCED under the overall guidance of the ExCo. It manages, supports and oversees the implementation of DCED activities. Knowledge management, advocacy and external engagement with a view to raise the profile of PSD and the DCED are among its core tasks. This includes the communication of results and impacts of PSD, building on the promotion of results measurement in member agencies. Further services of the Secretariat include technical support to member agencies and coordination with field-level programmes. It is also responsible for financial management and reporting, in coordination with the IFC Trust Fund management. Meet the Secretariat team.
Many of the DCED’s own knowledge and guidance products are developed by its Working Groups:
Donor agencies increasingly engage directly with the private sector, using a variety of strategies. Recent DCED work includes a review of opportunities and obstacles for donor engagement in innovative finance, and an analysis of major changes in donor agencies to enable strategic private sector engagement.
The DCED’s work on Market Systems Development (MSD), under the BEAM Exchange banner, includes extensive resources for donors and implementers on the BEAM Exchange website. Current focus areas include capacity-building for MSD, evidence, and peer exchange through webinars.
The DCED is also well known for its guidance on results measurement in PSD; developed in consultation with field-based experts, the DCED Standard for Results Measurement provides a common framework for measuring programmes’ results in practical yet credible ways. It is now implemented by around 150 development projects globally. Extensive supporting documentation and advice are available on the DCED website.
DCED members’ common understanding of good practice in Business Environment Reform (BER) has been documented in the Practical Guidance on BER. Through publications and conferences, the Business Environment Working Group continues to tackle key issues such as BER for inclusive business or SMEs; BER to promote economic transformation; and gender-sensitive business environment reform.
The DCED’s Women’s Economic Empowerment (WEE) Working Group has spearheaded international work on how to integrate WEE considerations into PSD programming, including in results measurement.
The Green Growth Working Group has recently studied how to support green growth in fragile and conflict-affected settings, as well as synergies between BER and green growth. It is currently studying the Circular Economy, and preparing case studies.
The DCED currently (2020) has 24 member agencies. Membership is open to governmental and philanthropic agencies as well as multilateral agencies (UN, development banks) that fund PSD in developing countries, and share the vision of making it more effective.
The DCED offers many services to member agencies. Thematic discussions with international technical experts at DCED Annual Meetings, such as on PSD in the age of digitalisation at the June 2019 Annual Meeting, facilitate frank exchanges and inform members’ work. At Annual Meetings, members also vote on the DCED’s scope of work and planned activities, and elect the five members of the Executive Committee (ExCo). By joining the DCED, agencies learn from each other, and shape agreement on effective practice across various PSD approaches.
In addition to Annual Meetings, opportunities for technical exchange on substantive issues exist in particular in the DCED’s thematic Working Groups. The DCED also provides a valuable forum for members to network with other agencies, present their own agency experiences and plan joint projects.
On request, the DCED Secretariat offers presentations and tailored workshops on PSD, current trends and specific technical themes to specialists or non-specialists in member agencies. Members can also ask the Secretariat for advice on technical questions related to PSD at any time. Overall, the Secretariat provides reliable institutional memory in the fast-moving field of PSD, and facilitates coordination and exchange among DCED members on a day-to-day basis. In addition, the Secretariat also helps members share their substantive publications with a wide audience through the DCED website, DCED newsletters and social media.
How to join the DCED
In line with the DCED Charter, applications are formally considered at DCED Annual Meetings; membership requires a modest annual payment to the Trust Fund to cover running costs. In exceptional cases, in-kind funding is also possible in lieu. Additional contributions to specific work streams are also welcome. Also important is agencies’ commitment to an open sharing of knowledge with other members, attending events such as Annual Meetings, contributing to the work of the DCED where possible and promoting the DCED within the agency itself. Agency representatives interested in learning more about the DCED should contact an existing member, or the Secretariat, to further explore options.