Economic Opportunity for the Poor through the Private Sector: Learning from Experience
Private Sector Development 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. (DCED PSD Synthesis Note, 2019)
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. Donors and multilateral agencies are therefore increasingly placing Private Sector Development (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. This has allowed the DCED to develop 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 400,000 page views in the last year alone (Dec 2018 – Dec 2019).
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 leading source of knowledge on PSD
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 and expanded 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 major donor agencies.
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.
Did you know? Early achievements of the DCED include the Guiding Principles for Selecting and Supporting Intermediaries in Micro- and Small-Enterprise Finance (1995), which played a pivotal role in the micro-finance ‘revolution’ and contributed to the formation of the Consultative Group to Assist the Poorest (CGAP). Similarly, the Guiding Principles for Business Development Services (2001) have shaped the debate about how to identify market-based solutions that will assist local enterprises in self-sustaining ways.
The DCED’s own research and guidance on priority themes
Many of the DCED’s own knowledge and guidance products are developed by its Working Groups on Private Sector Engagement, Market Systems, Results Measurement, Business Environment Reform, Women’s Economic Empowerment, and Green Growth.
- Donor agencies increasingly engage directly with the private sector to create economic opportunities for the poor – through 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 umbrella of the BEAM Exchange, 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 that 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.
Evidence on results in PSD
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.
Other member agency benefits
The DCED also offers many services that are exclusive 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
The DCED currently has 23 member agencies. Membership is open to all governmental and philanthropic agencies as well as multilateral agencies (UN, development banks) that fund or implement PSD in developing countries, and share the vision of making it more effective. 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 available options.