Private Sector Development

06May09

How can the private sector be part of the drive to alleviate global challenges? 

Some broad categories for thought:

  1. Public-private partnerships and Corporate social responsibility – PPPs help private sector reduce risk in providing goods/service/aid to achieve MDGs.  The public sector cannot do it alone and the private sector brings management and discipline to the MDG endeavour. CSR (at least for public companies) is a value-added trait that should be pushed by the institutional investors. Average investors already clamour for more transparent and impactful CSR, but the powerful institutional investors should demand it.
  2. Local economic development – concept of clusters in developing countries. Has been a successful tool historically (ie. silk cluster of Florence, steel cluster of Pittsburgh) – should consider implementation and evaluation in emerging/developing markets.
  3. Social enterprise – Base of Pyramid (BoP) – see post below on Professor Yunus brave and new business models.
  4. Fairtrade – need to be visible to consumers
  5. Microfinance and micro-insurance (in health)
  6. Business development services and training
  7. Business environment reform (ease of commercial activity – ie. setting up and closing down businesses – encouragement of risk, but also a safety net in place) 
  8. Value chain development – making markets for the poor (M4P) – Advanced market commitments (AMC) for vaccines and GAVI alliance. Bringing predictability of market demand for private sector businesses interested in development. 

And after reading – you are probably going to google “private sector development” . Let me share the bet hits from the results page on this topic: 

PSD Blog 

Rapid Response Group – World Bank 

Private sector is crucial to poverty reduction for two reasons:

1) poverty reduction is accelerated by growth of business, esp. small domestic businesses which need access to teh world: to markets, credit, technology – all facilirated by private sector

2) poverty reduction requires systematic change and private sector driven growth is the world’s most efficient and sustainable engine of change

 

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