BGI Final Report - Economic Growth - usaid

The Enterprise Development DiagnosticStatement of Purpose, Use and Potential IterationsThe Enterprise Development Diagnostic (MEASURE) provides USAID missions with a focusedunderstanding of the country-level business performance and decisions and the microeconomicenvironment that affects businesses’ performance and choices. MEASURE’s target is todescribe how business decision-making and results within an economy are influenced by themicroenvironment (including access to skills, services and knowledge).The MEASURE tool can be used to inform the design and implementation of programs thattarget enterprise growth as core or contributing outcomes. The diagnostic allows missions tobenchmark many of the focus country’s performance and characteristics against those ofcomparator countries. 3 Such comparisons provide opportunity to assess the enterprise-levelimpacts of various patterns and characteristics of micro environments, and offer opportunities tolearn and draw from model project activities and designs. It is designed as a measurement toolto serve USAID missions, particularly those missions with scarce access to economic analysis.The tool is designed to assist USAID Economic Growth Officers in program design activities byidentifying issues in the enterprises themselves, and in the relevant microenvironment in whichthey operate. This provides insights into the impacts that issues in the microenvironment haveon enterprise, and provides insight into actions and results that can be addressed throughprogram interventions.MEASURE is comprised of a menu of relevant indicators, appropriate for segmentation,interpretation and analysis. The indicators have also been selected for ease of measurement.The diagnostic can be customized to meet the special needs of specific country-contextscenarios, such as rebuilding states (including post-conflict and or fragile states, developingstates, transforming states) and states of sustaining partnerships.Although numerous indices already exist (from the World Economic Forum’s GlobalCompetitiveness Report to the Heritage Foundation’s Index of Economic Freedom to the WorldBank’s Doing Business indicators) that have a direct or indirect bearing on enterprisedevelopment, no index that enables the user to understand and measure the impact of thesefactors and project activities on enterprise development and the choices that enterprise make –i.e. their progress in growing in a healthy, sustainable way.BGI has developed a working definition for enterprise development drawing from an extensiveliterature review, along with input from thought leaders in economic and private sectordevelopment 4 .Definition: Enterprise development (ED) aims to improve business opportunitiesand incentives for individual firms and the private sector generally and tostrengthen their capacity to create, expand, and operate in the formal economy.ED enhances private sector performance as a means to reduce poverty andfoster more equitable distribution of income by increasing rates of economic3 Comparator countries can be selected based on characteristics such as: regional significance, income-based,economic or structural similarities, countries of special interest, etc.4 Literature sources include reports from USAID, the ILO, UNDP, the World Bank, FIAS, and DFID. Thoughtleadership provided by Don Snodgrass. This definition is intended for further peer review.34