Economic Opportunity for the Poor through the Private Sector: Learning from Experience
A definition: 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 around the world 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 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 sharing information about what works – based on practical experience and evidence on results.
Founded in 1979, the DCED has developed a substantial body of knowledge about the rapidly expanding field of PSD – as summarised on its website at Enterprise-Development.org. A Secretariat, in collaboration with policy advisors, researchers and field practitioners, ensures the quality and cutting-edge character of its contents. In the last year, enterprise-development.org had over 155,000 page views from more than 65,000 users.
The DCED’s members – governmental and philanthropic donors organisations as well as multilateral agencies – share the vision of making PSD more effective by:
- Sharing experience between agencies and field programmes;
- Developing and disseminating knowledge and guidance on good practice in PSD; and
- Communicating evidence on results in PSD.
Knowledge and Guidance for PSD Practitioners
The DCED website includes a wide range of resources on all major PSD approaches and themes – such as Industrial Policy, Employment Creation and Small Enterprise Development. New resource areas are being developed in line with member priorities, for example on Increasing opportunities for refugees or Innovative Finance. The DCED also has a growing library of short document summaries and synthesis notes on PSD approaches, to make knowledge accessible to busy readers at Headquarters and the field.
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.
- Many agencies currently emphasise the opportunities of engaging directly with businesses to create economic opportunities for the poor – through a variety of formats. Recent DCED work includes a review of opportunities and obstacles for donor engagement in innovative finance; an analysis of major institutional changes in donor agencies to enable strategic private sector engagement; and a review of multi-stakeholder platforms.
- The DCED’s work on Market Systems Development (MSD), under the umbrella of the BEAM Exchange, includes extensive resources for donors and implementers of the approach on the BEAM Exchange website. Current focus areas include capacity-building for MSD and reviewing links between MSD and structural transformation.
- The DCED is also well known for its guidance on results measurement in PSD: In consultation with field-based experts, it has developed 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 many development programmes 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 the informal economy, BER for inclusive business and SMEs; or 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. It has also reviewed WEE in the context of migration and forced displacement.
- 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.
News on PSD is regularly communicated through the DCED Newsletter, and 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.
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 mail-outs on the Latest Research and Evidence. In addition, the BEAM ‘Evidence Map’ compiles evidence on results from market systems development programmes.
Other member agency benefits
The DCED website offers a rich set of information to newcomers and more advanced practitioners in PSD and also serves as a central repository of current PSD policies of major donor agencies. In addition, the DCED Secretariat offers support to member agencies on request, such as through advice on any technical questions on PSD, and agency-based workshops and presentations. DCED Annual Meetings include technical exchanges on a chosen theme, most recently on PSD in the Age of Digitalisation and Youth Employment. To find out more about member benefits, please refer to our webpage on Why and How to Join the DCED.