Response to Mary's questions

Mary, thank you so much for your questions, and apologies for the delay in responding (am currently on holiday, but never so far from the computer!). To answer your questions: 1. As well as the research findings, we will be separately publishing a toolkit for practitioners, which will include a suggested framework and guidance for a process of pre-intervention analysis. This is currently work in progress. Without being prescriptive, we will draw on our experience and the research findings in order to set out an approach (steps and tools) that we hope will help programmes to assess the scale potential of an intervention before identifying partners or investing in a pilot. 2. Our "unit of analysis" for the research is at the sector level, and we believe that this is a very useful way of looking at programme results in other contexts. Sometimes, programmes will undertake one intervention, but often multiple interventions, designed to achieve sector-wide change. By portfolio approach, what we mean is that programme funders and implementing partners should explicitly acknowledge that some sector interventions are likely to work better than others, and (more importantly) that some sectors will respond more than others to those interventions. Of course, we invest in sector interventions because we believe that they will achieve results, but at the programme level we should have in mind that there is likely to be a wide distribution of actual results around the intended results. With a portfolio approach, we hope that there would be no "shame" in reporting individual intervention "failure" in the context of the whole programme results, which should be judged as a whole rather than on an intervention by intervention basis. This clearly has implications for the way in which we assess and report programme results, with much more emphasis on indirect sector wide impacts. 3. On private sector engagement, our underlying observation is that MSD programmes are generally much better at articulating the "development case" for a sector intervention than they are at setting out the "business case". I suppose that this is to be expected considering that interventions are funded by donor agencies and implemented by development professionals? I absolutely agree that there are many components to the business case (and thank you very much for the link to the Canvas). But at the end of the day, private sector investment is driven by risk adjusted returns. This is especially relevant to scale, which crucially requires indirect effects arising from competitive/non-competitive response. If we do not have a clear view of what those likely returns might be, we will continue to shoot in the dark. DCF is a very useful tool, but certainly not the only one! I hope that these responses go some way towards answering your questions? There is still a lot more thinking to go into our deliverables and your questions and challenges are most welcome - thank you!

Feedback on Research

HI there James this is really exciting the research you are conducting. Thanks for sharing an update. Just a couple of comments: 1. Under Strategic Planning you state: "We need more rigorous pre-investment analysis of the human and economic parameters, dynamics and potential at a sector level." I certainly agree with you here. I am curious as to whether in your recommendations or conclusions you will be able to provide some frameworks with formulas that will guide us in conducting a pre-investment analysis? 2. What a brilliant term-- portfolio approach-- to explain the necessity of several interventions to address the root cause of market failure that afflicts the markets that we often work in. Addressing market failure in complex markets involves several responses necessary to address the root cause of the market failure-- your portfolio approach is a great way to describe addressing market failure in a complex market But I don’t really understand how a portfolio approach would ‘recognize the inevitable variation in intervention results’. It seems to me that in a complex market, market failure requires diverse interventions to be facilitated to respond to the runaway market failure. So then the various interventions within the portfolio of interventions are addressing distinct aspects of the market failure—thus of course there is going to be variation in intervention results. Maybe I am missing something, so could you please explain better what you mean how a portfolio approach “would recognize the inevitable variation in intervention results, help to manage expectations and allow greater transparency.” 3. Under the section private sector perspective, is it really just a case of calculating net present value of future cash-flows for a private sector partner? That seems to be a bit limited. For sure it would make a business case for a private sector actor or firm to get on board, but what about a collaborative discussion about the value the participation would bring to both partners (NGO/donor & private sector actor/firm)? And to achieve this value what activities do the partners need to engage in (promotion, offering of TA, distribution, production) and then what value is attributed to these activities (financial, human resources, time)? The Partnership Canvas provides a nice framework for this https://valuechaingeneration.com/2014/10/17/the-partnership-canvas/ Cheers Mary