What have I learnt working with the private sector in market
systems projects?
Identify the systemic
constraint and address the change at that leverage point. It is important
to identify what is stopping the private sector from already reaching out to
these markets. In one project, we found that livestock inputs suppliers were
interested in developing distribution networks in very poor marginalised pastoralist
communities but what had stopped them in the past was a lack of experience in in
these markets. For them, lack of experience made the cost of market entry and
market testing too high. The project therefore supported a market entry testing
process for the firms. Each one carried out market research, tested their own distribution
models and learnt from successes and failures. Over time, specific firms saw
market potential and fully immersed themselves in the process, often evolving
their strategies to respond to their insights on market dynamics.
From the outset, build
in a pathway to market outreach with the private sector. In one project, we
solicited proposals from firms to provide business services to agriculture
firms working with smallholder farmers. We added a question asking firms to
describe a) what they would try and find out about the market through the grant
and b) how they would design market outreach and development strategies beyond
the grant to continue interactions with market actors. The outcome was that firms
better understood the catalyst nature of the grant. This also aligned
expectations and incentives and all subsequent discussions between the firms
and the project focussed on what was being learnt about the market and how the
firm would scale out in the future.
Look at the market
actor and seek out evidence of internal leverage points. Many firms will
have engaged with hard-to-reach markets in the past. They may have made
investments that have not worked out, or at least, invested in some basic
research (codified or tacit) to test the water. When talking to firms about partnerships,
look for resources that are vestiges of this history (a person, a report, a
process, etc.). These can be put into the mix. A project can layer in additional
resources, or improve the functioning of the resource, or help scale out out
the resource, etc. In one project, we found that a university had set up an
internship programme for agribusinesses students. However, this internship was
not very successful because the university did not have the networks and
knowledge to develop relationships with the private sector in rural areas. The
project helped build these relationships. At the same time, the project helped train
the interns who then on-trained rural firms> Over time, the university gathered
enough knowledge to develop appropriate short courses for these rural firms –
incorporating the expertise from the project as well as through the interns.
