Issue Paper 5: Executive Summary

Developing Markets for Business Development Services: Designing and Implementing More Effective Interventions

Executive Summary

The recent, intensive scrutiny of business development services (BDS) has resulted in what some observers have referred to as a paradigm shift. While the extent to which such a climactic or monumental change has taken place may be justifiably challenged, unquestionably a change in thinking has taken place. This change can be characterised by:

Recognition that 'something is not right' with current approaches to BDS promotion;
Concern that diverse, appropriate, sustainable BDS remains an elusive objective;
Acceptance that market mechanisms may offer a more effective route to achieving this objective.

The paradigm shift, at its core therefore, is about development of BDS markets. The market development approach represents a move away from supply-driven state or donor-subsidised services towards developing more effective market environments that permit the delivery of demand-led services for small businesses.

The challenge for development organisations is to comprehend the implications of this shift and then translate new thinking into practical guidelines that ultimately will lead to more effective interventions. The journey will be a long and difficult one. The purpose of this issue paper is to try and bridge this gap between new thinking and improved future practice. In some respects therefore it is part-issue paper - considering the theory and rationale of intervention, and part-guideline, focusing on the practical implications for intervention design and implementation of BDS programmes.

The paper:

Establishes the basic rationale for BDS market development and summarises its distinctive features compared with previous approaches. In doing so it examines the role of BDS in small enterprise or private sector development, its relation to the wider enterprise environment, and offers a new definition of BDS.
Considers the dynamics of BDS markets and the constraints to BDS market development. It develops a conceptual framework for assessing BDS markets, and outlines how market assessment should be used as the basis for intervention design.
Defines sustainability in BDS and sets out the reasons why an explicit view of sustainability in BDS is important. It presents a framework linking key actors with supply-side functions and summarises what this sustainability picture should look like.
Addresses the practical issues of how interventions might be designed more effectively in response to these changes in thinking, rationale and objectives: conducting market analysis, structuring support for BDS, selecting and working with partners.

The paper is written for those involved in the funding, design and implementation of programmes that facilitate the delivery of BDS to small businesses. It should assist them in critically examining current, and shaping future, policy and practice.