One of the biggest challenges facing market systems development (MSD or M4P) projects is designing and implementing interventions that consistently achieve sustainable, systemic change in market systems as the foundation for development impact at scale. Engagement with stakeholders throughout this research project showed that many market systems practitioners share the perception that examples of successful projects and evidence of impact at scale is limited, and that they are looking for ways to increase success rates of pilot interventions and of project interventions moving from successful pilots to impact at scale.
This report is based on a research project which focuses on interventions that work with and through private sector partners. We wanted to understand whether:
- MSD projects are using robust scale-focused business/investment analysis to guide the selection, design and implementation of pilot interventions, and
- Does using such analysis increase pilot-to-scale success rates? We also wanted to consider how such analysis might help MSD projects to engage more successfully further up the value chain and leverage third party finance.
The findings provide new and compelling evidence of the need to pay more attention to the commercial aspects of business innovation, and the value of more rigorous commercial analysis and strategic thinking, before investing in pilot interventions. In accordance with these findings, and drawing on concepts and methods of commercial investment analysis, the report provides recommendations on how the selection of sector interventions, intervention partners and target beneficiaries can be improved in MSD practice. A conceptual model can help MSD programmes better understand pathways to scale and explain how the project will build on a successful pilot through supplementary interventions. Third party finance plays a vital role in this process, hence the report also explains how MSD practitioners can pay more attention to third party development, impact and commercial finance for investment in the design and implementation of their programmes. Further and more detailed guidance on these aspects will be provided in a forthcoming toolkit for MSD practitioners and donor agencies.
Taken together, the research findings, recommendations and tools will lead to an increased success rate of MSD pilot interventions and of pilots leading to impact at scale; allow MSD projects to engage with more sophisticated, value adding businesses higher up value chains; and allow MSD projects to successfully leverage third party development, impact and commercial growth finance.
The report is based on the Maxwell Stamp led research project on scaling up.