BDS market development guide.pdf - PACA

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30 • A Failure to Place BDS in a Market Context: related to the above point, most BDS interventions have not tried to place their work in a market context and their view of sustainability, therefore, is inappropriate. • The Breadth of the Term: BDS as defined here covers a wide variety of services. This means that interventions need to be clear about what kind of services are being considered. • Some Areas of Legitimate Government Involvement …….: there are some services and functions that are likely to remain within the legitimate remit of governments. For example, basic research and development and some types of information provision are close to the education and knowledge base justifying state involvement. More capable governments may see themselves as the only actor capable of wider cluster development or network coordination and brokering. However, the list is not especially long. • ……… But a History of Messy Government Involvement: partially stemming from public goods arguments but more often for other social and political factors, governments have been (and are) involved in BDS as subsidizers or organizers. The often-troubled history of interventions that have supported government in this role has been a key factor in leading agencies to market development. Governments in industrialized countries do often intervene extensively in BDS, and this agreement is sometimes used for continued efforts to raise low-income country governments’ capacity to provide BDS directly (rather than facilitate BDS markets). However, as we discuss below, this argument is fundamentally flawed. 21 The above factors complicate the BDS context but none excuse failure to develop a sustainability picture for BDS. On the contrary, it is precisely because of this prevailing complexity that striving for a transparent view of the future in BDS is so important. A TRANSPARENT FRAMEWORK FOR SUSTAINABILITY IN BDS To overcome these problems, interventions should develop explicit, transparent views of sustainability in BDS. Figure 11 offers a simple framework for a transparent sustainability picture. This graphic builds on the earlier definition in BDS and in particular on four key questions: what needs to be done, who are the main players, who does, and who pays. 22 Each is discussed below. 21 See R. Bennett and P. Robson (1999); The market for external business advice services in Britain; ESRC. The Centre for Business Research for an example of a BDS market in a high-income country where the rationale for government involvement is very unclear. 22 There are some parallels here with mapping exercises in sub-sector analysis. Microenterprise Best Practices Development Alternatives, Inc.
31 What Needs to Be Done?—Key Supply-side Functions Markets are dynamic because the factors influencing them are changing and SMEs needs and circumstances change. For markets to be sustainable—to meet the changing needs of and to deliver benefits to their SME consumers through transactions—a number of support functions need to be undertaken. In thinking about what needs to be done in a market, we need to identify these key functions. Our perspective here is supply side; the demand-side function is consumption of services. In reality, most interventions focus on the supply side. Figure 11: Sustainability in BDS 1. Market Functions Delivery of Services Product Development Coordination Research and Development Information Skills Enhancement Regulation Advocacy Facilitating interventions from government or donors 3. Who Does? 4. Who Pays? State Private sector (for-profit) Not-for-profit sector 2. Key Supply-side Players Business membership organization s Business networks In order of priority, the main supply-side functions that need to be undertaken in any market are: • Delivery of Services: the supply-side of the transaction—the central function in any market; • Product Development: ranging from adaptation of products to existing markets to new products for new markets; responding to new customer requirements or using new information to pro-actively offer services in advance of customer recognition; • Skills/Capacity Enhancement: for providers of BDS, services to ensure that skills and knowledge in developing and delivering BDS are updated and refreshed; Chapter Three—Where Do We Want to Go?— Developing a Clear Picture of Sustainability
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 12 and 13: 2 • To address poverty, governmen
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: 29 Markets are institutions. Develo
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
Page 63 and 64: 53 Existing MARKET (sub-sector, ent
Page 65 and 66: 55 To Reach Female-Owned Businesses
Page 67 and 68: 57 C Informal, and C Individuals. T
Page 69 and 70: 59 The drawbacks of tender-based se
Page 71 and 72: 61 CHAPTER FIVE HOW DO WE ASSESS OU
Page 73 and 74: 63 • How well?—the quality dime
Page 75 and 76: 65 day income * This highlights key
Page 77 and 78: 67 Beyond SMEs—Unchanged Indicato
Page 79 and 80: 69 Figure 16: Measurement Methods i
Page 81 and 82: 71 • Donors may be interested in
Page 83 and 84: 73 and poverty reduction? Or is the
Page 86 and 87: A-3 KEY REFERENCES Anderson, Gavin,
Page 88 and 89: A-5 Hitchins, R and Gibson, A; "The

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