BDS market development guide.pdf - PACA

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Figure 10: Matching Market Analysis to Intervention Options
BDS Providers
Constrained by:
Limited Information—
about market
opportunities
Skills Deficiencies—
technical or business
Operational
Deficiencies—resources,
systems, structures
Inappropriate Products
Environment—distortions
and barriers to activity
Intervention Options
Supply-side
Product
development
Venture finance
Technical
assistance
Training
EFFECTIVE
MARKET
Supply =
Demand
Market provides
solutions that
SMEs want
Demand-side
Vouchers
Matching
grants
Information
Business Linkages
BDS Consumers
Constrained by:
Limited Information
or Awareness—about
problems or solutions
Valuation Problems—
affecting willingness to
pay
Limited Resources—
to assess or purchase
services
Environment—
pervasive subsidy
reduces willingness to
pay
Figure 10 is necessarily simplistic. In reality,
interventions will often affect both supply and demand
sides. Box 6 provides an example from a pilot voucher
project in the Ukraine.
CONCLUDING COMMENTS
From the preceding discussion, and the conceptual
framework for market analysis presented, four key
points emerge:
1. SMEs live and die within a market context. Few are
actually touched by donors 18 . Designers need to
first ask why the market fails to serve SMEs with
Box 6: Interventions Affecting Demand
and Supply Sides
In a post-test survey, 17 voucher users said
that they would have paid the full cost of
training in computers and business
accounting had they known that these
services were available. This finding
indicates that vouchers were able to
overcome a demand-side problem of limited
information, which inhibited SMEs to
recognize a business problem and seek an
appropriate solution. The value of the
voucher was as much in the information it
conveyed as the discount it offered
consumers to try to services once
consumers learned about their availability.
The same survey revealed that providers of
computer training were encouraged to
develop new courses based on the feedback
they received from the trainees. The
injection of demand stimulated and
17 Field et al., Report on NewBizNet Pilot Voucher Scheme, 1999. motivated suppliers to develop products,
18 “The Application of Market Led Tools in the Design of BDS Interventions enter new (Influencing markets, the and Price develop of Soup new in
Nepal)” by Jim Tomecko of GTZ presented at the Donor Committee’s relationships. Asia conference The in survey Hanoi results reported illustrates the
finding from a nationwide survey of BDS consumption across multiple the sectors twin effects and learned of some that instruments.
“free
services” – those offered by donor partners – were a fraction of the overall BDS market estimated at
$320,000 per year.
Chapter Two—Where We Are Now—A Framework for
Market Assessment and Intervention Choice