BDS market development guide.pdf - PACA

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• Advocacy: for the business community as a whole (rather than for individual businesses);
and
• Buying services: in which the provider buys products from SMEs (rather than the other way
around).
[stopped 8/2]
There are some exceptions to the above discussion. Although the definition above provides a
basis for understanding BDS, it would be foolhardy to strive for a “watertight” definition of
BDS. When services are such a vital component of economies, linked closely with
manufacture and trade, there will always be blurred edges around any definition. For
example:
• Some services are part of a trading relationship in physical goods—for example, design
advice and market information between retailers and manufacturers or the advice and
services offered in a managed workspace environment. To unbundle services from
products in these situations may be pointless.
• Technology development (and privatization) has allowed a range of new services to be
developed associated with utilities.
It is also important to distinguish between buyer-seller relationships for goods—which we
have classified here as not BDS—and commission-sales relationships—which we have
classified as BDS. In the former, the buyer pays the money, takes title and ownership of a
product; in the latter, products are sold on behalf of a producer without title passing to the
other party. Clearly, this is a fine line—but while the latter is providing a service (and being
paid for it) the former is buying a product (and paying for it). 9
This element of looseness in definition is inevitable (and to be welcomed) if our notion of
BDS is one that has practical meaning in business environments. This sets the context for
donor interventions. However, it is important that this is not interpreted as a blanket
justification for donor interventions “everywhere”; on the contrary, interventions need to be
justified on the basis of rigorous analysis and criteria.
Main Objective
The Old: donor-supported approaches to BDS have focused on building the capacity of
organizations—partners of donor agencies—to deliver improved services or on delivering
services directly.
The New: from a market development perspective, the main objective of interventions
should be improved functioning of BDS markets.
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A further complication arises here because often buyers of products provide services—design, market
information, and access—bundled within their purchase. However, this does not contradict the basic
difference between providing a service and buying a product.
Microenterprise Best Practices
Development Alternatives, Inc.