market systems approach
TRANSCRIPT
Session 6: Market Systems Approach
Group Task
SUPPORTING FUNCTIONS
RULES
Laws Standards
Informa.on
Demand Supply CORE
1. Revisit your donuts from day 1
2. IdenHfy the areas where you are working in the market system – these are the funcHons of the system you circled in the day 1 exercise. Focus on the two funcHons you think are most important for inclusive growth
3. For each of the two funcHons, define the three most important changes in these funcHons you would like to see over the next three years.
4. How do you think these changes will contribute to inclusive growth over Hme?
Strategic Framework: Musika
Systemic interven-on
Poverty reduc-on
Improved enterprise performance
Market system change
Economic ac-vi-es of the poor are yielding be=er returns (income + jobs) because they are part of a market system that is growing, inclusively
Be=er markets – rela-onships, rules, incen-ves and capaci-es -‐-‐ allows economic ac-vi-es of the poor to be managed for be=er returns.
Markets with stronger capaci-es to learn, adapt and change increases growth and access to opportuni-es among poor people (and everyone in the market).
Systemic constraints
Specific market system
The poor and their context
The basic diagnosHc process
Focus of intervenHon
Diagnosis
Symptoms
Causes
Why?
Feasibility
Springfield Centre|Making Markets Work
Systemic interven-on
Poverty reduc-on
Improved enterprise performance
Market system change
RULES
SUPPORTING FUNCTIONS
Laws
Informal rules & norms Standards
Regulations
CORE
Community enterprises
Local tourism industry
Wider tourism industry
Information
Infrastructure
Mediation
Negotiation
Finance
Booking
Marketing
Maintenance & construction
A story: Community based tourism in Africa
Functions
Business training/advice Advocacy Finance Construction & maintenance Joint venture mediation Booking Marketing and branding Information Standards Market research Legal services Conflict arbitration Regional planning Advice to government
Players Who does? Who pays NGO / PS Donor/PS internship
NGO Donor / members NGO Donor PS Donor
NGO / PS Donor NGO Donor
NGO / PS Donor NGO Donor NGO Donor
NGO / PS Donor PS Donor
NGO Donor NGO/PS/Govt Donor / Govt
NGO Donor
What’s going on?
Sustainability Strategy
Springfield Centre | Making markets work
Systemic interven-on
Poverty reduc-on
Improved enterprise performance
Market system change
Resources Ac.vi.es
interventions often miss this link
Who Does/Who Pays
• Musika matrix • Set up slide for exercise
To increase the performance of the whole industry over time to:
o Meet/exceed changing market requirements (REFER BACK earlier slide on performance)
o Foster a systemic change process towards: § Broader and deeper commercial relationships § Ongoing innovation and upgrading § Benefit flows that drive better relationships and innovation
o Bring about inclusive growth
FacilitaHon Principles: Why
Is this facilitaHon of market system change?
• Task (class discussion) – Patrick Boateng, project manager of the Rice Value Chain Project, reports to donor Shiela Quayson on the project’s achievements in meeHng annual targets and what lies behind their success
– Can this case be described as “facilitaHon”? Give reasons why/why not?
FacilitaHon Principles STRATEGY: Use levers to catalyze behaviour change:
– Players see the value (incenHves) of playing by different rules/norms – Players have the capacity and willingness to iniHate the change
Build momentum to sustain a beder performing system
– Breadth (more coverage) – Depth (norms more deeply rooted)
TACTICS: Foster effecHve market rela-onships and ownership by:
- Buying down risks in the short term
- Encouraging self selecHon to test ownership
- ConHnually test durability of changes
Deploy resources of appropriate intensity:
- Roles in relaHon to market actors
- Resources in relaHon to market norms
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Finding Leverage: • Points in the market system than can affect behavior of the whole industry
• TargeHng feasible opHons for change
Intervening here
Should affect here
Facilitation Strategy: Leverage
RULES
Input Supply ProducHon Processing Retailers
Wholesale
SUPPORTING FUNCTIONS
CORE RELATIONSHIPS
CORE FUNCTIONS
…and here
…and here
Leverage: Finding It Rela-onship Structures
§ Economic (geographic nodes in the system) § Social (local leaders, key influencers)
Rules § Formal (standards, regulaHons) § Informal (aftudes, norms)
Knowledge Flows § Exchange mechanisms for knowledge and skills embedded in commercial transacHons
§ Media § Formal/informal networks
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Exercise: Working with Leverage Orienta-on: There are four (4) different scenarios. Each scenario describes an opportunity or a problem that could offer the project a means to leverage wider systemic change in favor of market system improvement while also decreasing the need for project resources.
§ Maize Farmers with Cash Flow Problem § Maize Trader Needs to Source Much Larger Volumes of Maize § Government Mandate to Increase Food Security in Rural Areas § Large Maize Miller Enforcing Outgrower Contracts
Task: Read, discuss the scenarios and answer two quesHons. 1. What type of leverage does the scenario present? 2. Which opHon will leverage pro-‐poor systemic change?
– a beder choice – no clear choice – no feasible opHon
3. Be prepared to present your choices in plenary.
Facilitate Market System Change
Market not working for the poor
Market working better for the poor
Entry ExitTrial and pilot Crowding-in
Outreach & inclusion
Transactions & benefit flows
BREA
DTH
Appropriate functions/players
Innovation & responsiveness
DEPT
H
MOMENTUM Towards CROWDING IN
MulH-‐faceted LEVERAGED IntervenHons
Enabling Rules
CapaciHes/PracHces
RelaHonships Aligned
IncenHves & Ownership
FacilitaHon tacHcs WHY: To leverage a change process à crowding in
HOW: Facilitators must influence behaviour of market players
TACTICS
Iden-fica-on
Rules of Engagement
Offer
Smart tacHcs are crucial to successful facilitaHon
Iden.fying the right ‘partners’
Intensity of Resource Use
Suppor.ng partners in ways which alter behaviour posi.vely
OBJECTIVE
INFLUENCE
Partner SelecHon Exercise (1)
TASK: • Revisit your donuts, again • Frame the objecHve of one of your intervenHon areas
• What changes do you want to bring about? • Who are your partners for this intervenHon?
– IdenHfy up to 3 exisHng partners. • Why did you choose these partners?
– List your partner selecHon criteria.
SelecHng a partner
Momentum Poten-al 2. Indicates support for/or resistance to desired change 3. Indicates competence 4. Indicates influence on broader system change
Leverage Poten-al 1. Point for achieving large-‐scale change
WILL
SKILL
high
high
low
low
Capacity problem?
Incen2ve problem?
Why aren’t they doing it already?
Can’t avoid them?
Why aren’t they influen2al in the system ?
HIGH WILL | LOW SKILL HIGH WILL | HIGH SKILL
LOW WILL | LOW SKILL LOW WILL | HIGH SKILL
Partner SelecHon Exercise (2)
• Re-‐assess your 3 partners using the will/skill matrix
• Re-‐consider your choice of partner: – ConHnue as is – ConHnue but change – Drop/Add
• Will the focus of your partnership change? • Use worksheet (2) to record your discussion
Summary: Using Partner SelecHon Criteria
• To understand partner’s posiHon to…
– Leverage wider system change thru firm behavior – Versus leverage project outcomes.
• To assess partner’s readiness to test new business aftudes/pracHces… – Longer term growth vs. short term gain. – Build relaHonships vs. win the transacHon – Separate business from family dynamics