29 April 2014

Profitable Development Solutions: How the Private Sector Can Contribute to the Post-2015 Agenda

Report | April 2014

Deliberations around the expiration of the Millennium Development Goals and what comes after them are infused with optimism that the end of extreme poverty is within the world’s grasp. 

When United Nations secretary-general Ban Ki-moon convened a high-level panel to forge a new global post-2015 Development Agenda, the centerpiece of the group’s final report called for “eradicating extreme poverty from the face of the earth by 2030.” The prospects for achieving this goal do not seem so far-fetched; half a billion people have been lifted out of extreme poverty (those living under $1.25 per day) since 2000 alone. However, further progress will require broad-based and sustainable economic growth across the developing world, innovative and affordable ways to deliver basic needs for the poor as well as major new investments to tackle global challenges such as climate change. Addressing these issues will require an all-hands-on-deck approach from all the players involved in international development. Notably, the private sector—from small and medium-sized enterprises to major global corporations— must play an expanded role if this vision is to be realized.

By some measures, this shift is well underway. In 2011, the combined private flows of the 23 traditional donor countries (members of the Organization for Economic Cooperation and Development’s Development Assistance Committee) were four times larger than their official development assistance. Private equity funds have become increasingly significant players in the developing world, even in Sub-Saharan Africa, where the size of investment funds and private capital investment in the region expanded 15-fold and 5-fold respectively in the 2000s. Meanwhile, the developing world is benefiting from the proliferation of thousands of social enterprises that seek to lower the price and increase the accessibility of a range of goods and services for the very poor while still turning a (modest) profit. 


This essay identifies actionable areas that can enhance the development impact of private sector activity while overcoming the mistrust of other development stakeholders. It presents a taxonomy of various private sector actors that distinguishes among the range of constraints they face in contributing to poverty alleviation.




This essay argues that investments in individual enterprises serving low-income customers can be complemented by focused efforts to foster the industry “ecosystem” within which enterprises operate. It suggests that this approach may offer the most promising path for accelerating the discovery of enterprise solutions and the speed with which they are brought to scale.




This essay explores the key issues facing the US government as it engages with the private sector in pursuit of development goals. It offers suggestions for the US government as it deepens such engagement in the post-2015 Development Agenda process..


Download


3.6 MB

No comments: