How to Stop Making the Rich Richer at the Expense of Participants

It is quite simple, really, line up answers to these three questions; 

1.     Why is it necessary to get the private sector involved?

2.     What do you need them to do?

3.     How do you get them to do it?

Why is it necessary to partner with private-sector actors?

 We know there are four main reasons participants are not involved profitably in the economy or market system; they are either;

1.     Not aware of how to get involved or how to get involved profitably

2.     They do not have access to channels to get involved

3.     the means to get involved in is not available to them

4.     they simply cannot afford to get involved.

 These are the four As we typically use in market systems development to define the root cause of constraints.

Humanitarian responses will typically solve these root causes directly, but they need more resources at the scale required to resolve these issues for the participants' populations.

 Development practitioners, such as MSD professionals, aim to address the underlying causes of problems by aligning the interests of market actors with those of the participants. This involves defining the function that needs to be fulfilled, identifying potential market actors who can perform the function, and creating a continuous relationship between the participants' demand and the market actor's supply.

 This is why development professionals involve private sector actors—their interest is aligned with resolving the root causes profitably.

In addition to their aligned interests, they have more resources, technology, creativity, and market intelligence than development programmes, which will ensure sustainability.

What do you need them to do?involve private sector actors—

You need them to resolve the underlying causes profitably for them and the participants. The primary objective of these partnerships is to make sure that participants are involved profitably; it is, therefore, important to ensure that the market actor you are partnering with is clear that the participants must be involved in ways that enhance their profitability. This can take different forms;

As consumers, they use whatever the product or service is to enhance their well-being. As suppliers, they use it to enhance their livelihood and income. As employees or workers, they use it to ensure decent work and increased income.

How do you get them to do it?

For these market actors to know how interests align with the interests of the participants, the MSD professional needs to do a lot of work before engaging with the private sector;

1.     Learn the language of the private sector

2.     Investigate the extent to which resolving these constraints is profitable

3.     Learn the cost of performing the function you wish them to perform

4.     Put together a compelling case for investment – compelling to the extent that any investor will feel they are missing out if they do not invest.

5.     Negotiate the level of investment and the period of investment

6.     Only invest if the private sector’s investment is not at your programme's required time and scale.

Our work is essentially this: We look for business opportunities, investigate their feasibility and viability, and put together a clear proposal to the business partners and the participants so it is clear what each party will gain from the proposition.

 This is hard, time-consuming work that requires a deep understanding of the context and the conditions.

 If we do this, everybody will get richer, and the private sector will not get richer at the participants' expense.