BDS market development guide.pdf - PACA

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2 • To address poverty, governments and development agencies need to pursue a marketfriendly approach to development, based on sound macroeconomic management, competent delivery of public services, structural reform, and open trade. • Inherent in this approach are two implications: that government focus on its areas of core competence and that the private sector be recognized and encouraged as the prime engine of economic growth. 1 • Private-sector development—of which SME development is an important part—is therefore an intrinsic part of any effective poverty-reduction strategy. Business Need for Services A focus on private-sector and SME development grows directly from development agencies’ commitment to an environment promoting the private sector. Key aspects of this environment are the macroeconomic context and public investment in people. However, more immediately for SMEs, access to services is a vitally important dimension in their business environment (see Figure 1) and a key factor in determining the competitiveness of economies. • SMEs have a range of different “needs” that are critical to their survival and growth. 2 The nature of these needs will be influenced by sector and stage of SME development but will also relate to their ability to, for example, find customers, design products, enhance productivity, reduce fixed costs, improve administration, communicate effectively, and access new technology. The degree to which these needs are met will have a major influence on business success. • Although business needs differ, needs can be understood as basic, practical questions (such as how to, with whom, where to, and what about) in relation to essential business functions. These are questions faced by all businesses. Indeed, businesses, and SMEs in particular, are associated with independence. Yet, to a considerable degree, success as a small business stems from the owner–manager’s ability to manage his or her business in an interdependent manner and to develop appropriate working relationships with providers of services (and other stakeholders) in the environment. • Financial services are a critical part of this immediate environment but cannot meet all business needs. • Environments that are conducive to SME development provide relevant, differentiated services to meet these needs on an informal or formal basis. 1 Economic growth is not seen as a guarantee of poverty reduction but as a necessary condition for it. 2 Needs are concerned with inputs to (administration, people, technology) and outputs from (access to markets, customers) SMEs. Microenterprise Best Practices Development Alternatives, Inc.
3 Figure 1: Bringing Coherence to BDS: Needs, Services, and Providers PROVIDERS FAMILY FRIENDS CUSTOMERS BUSINESS NETWORKS NETWORKS (FORMAL AND INFORMAL) INSPECTION AND TESTING TECHNOLOGY SERVICES NEEDS IN RELATION TO: PRODUCTION FOR-PROFIT PRIVATE SECTOR FINANCE BANKS FINANCE COMPANIES ACCOUNTANTS CONSULTANTS DESIGNERS OTHER SUPPLIERS (EQUIPMENT + SERVICES) ACCOUNTANCY/ AUDIT TRAINING PERSONNEL BUSINESS SPACE SMEs RAW MATERIALS SECURITY MARKETS TECHNICAL INFORMATION COURIER DELIVERY STATE NATIONAL GOVT. LOCAL GOVT. PARASTATALS CONSULTANCY REPAIR AND MAINTENANCE LINKAGES LAWS/ REGULATIONS COMPUTER SERVICES BROKERING/ LINKING ADMINISTRATION TRANSPORT TELECOMMUNICATION SERVICES WEB-SITE DESIGN AND MANAGEMENT LEGAL SERVICES ASSOCIATIONS UNIVERSITIES/ COLLEGES MUTUAL GUARANTEE ASSOCIATIONS NOT-FOR- PROFIT SECTOR NGOs CLUBS Chapter One—Why BDS Market Development? Why It Is Important and What Is New about It
Page 1 and 2: BDS Market Development: A Guide for
Page 3: Alan Gibson is a co-founder of The
Page 6 and 7: ii CHAPTER FOUR HOW DO WE GET THERE
Page 8 and 9: iv Table 1 Implications of Differen
Page 10 and 11: vi How to Use This Guide: A Quick R
Page 14 and 15: 4 • Potentially, a range of provi
Page 16 and 17: 6 Figure 2: Flows of Services in th
Page 18 and 19: 8 • Efficiency—The cost bases o
Page 20 and 21: 10 • Advocacy: for the business c
Page 23 and 24: 13 CHAPTER TWO WHERE WE ARE NOW—A
Page 25 and 26: 15 The flow diagram of an effective
Page 27 and 28: 17 KEY CHARACTERISTICS OF EFFECTIVE
Page 29 and 30: 19 Figure 7: Quadrant of Supply-sid
Page 31 and 32: 21 • Consumers—such as female-o
Page 33 and 34: 23 WHERE SHOULD INTERVENTIONS FOCUS
Page 35 and 36: 25 Figure 10: Matching Market Analy
Page 37 and 38: 27 CHAPTER THREE WHERE DO WE WANT T
Page 39 and 40: 29 Markets are institutions. Develo
Page 41 and 42: 31 What Needs to Be Done?—Key Sup
Page 43 and 44: 33 Box 7: Key Considerations in Ass
Page 45 and 46: 35 Figure 12: Functions of the Stat
Page 47 and 48: 37 Table 2: Sustainability Framewor
Page 49 and 50: 39 CHAPTER FOUR HOW DO WE GET THERE
Page 51 and 52: 41 Figure 13: Where to Intervene to
Page 53 and 54: 43 • Consistent Policies and Appr
Page 55 and 56: 45 • Have been developed to be pe
Page 57 and 58: 47 Avoiding overloading may involve
Page 59 and 60: 49 C For new product development, a
Page 61 and 62: 51 • Precisely, what are they goi
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53 Existing MARKET (sub-sector, ent
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55 To Reach Female-Owned Businesses
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57 C Informal, and C Individuals. T
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59 The drawbacks of tender-based se
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61 CHAPTER FIVE HOW DO WE ASSESS OU
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63 • How well?—the quality dime
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65 day income * This highlights key
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67 Beyond SMEs—Unchanged Indicato
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69 Figure 16: Measurement Methods i
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71 • Donors may be interested in
Page 83 and 84:
73 and poverty reduction? Or is the
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A-3 KEY REFERENCES Anderson, Gavin,
Page 88 and 89:
A-5 Hitchins, R and Gibson, A; "The
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