The Blog

view all

New USAID Report on Private Sector’s Role in Sustainability and Scale: 5 key takeaways from the Enduring Results Study

The recently released Enduring Results Study 3.0 led by CRS takes on a task that few projects have the luxury of doing – it takes a retrospective look at project outcomes two years after funding has ended to evaluate drivers of sustainability and scale. Drawn from 29 USAID partnerships with the private sector, the ERS 3.0 is the third iteration of this study and examines the characteristics of partnerships that sustained their outcomes and the role of all partners in enabling enduring results. The results that emerge point practitioners in new directions for engaging with the private sector and suggest best practices for anyone – private sector, public sector, or civil society – engaged in work with value chains.

Background

USAID has committed to a major cultural and operational transformation in the way it collaborates with the private sector. The 2018 Private-Sector Engagement Policy calls on implementing partners to “be at the forefront of seeking and proposing market-based approaches to address development and humanitarian challenges” and, as part of this cultural shift, has committed to a Private  Sector Engagement Evidence and Learning Plan to deepen the body of evidence about what works – and doesn’t – in engaging with the private sector.

The Enduring Results Studies have focused on the continuity of intended activities and/or outcomes that begin while USAID is actively funding and supporting the partnership and that sustain for at least two years after USAID’s assistance has formally ended. The first two studies (ERS 1.0 and ERS 2.0) collectively focused on 50 USAID private sector partnerships that ended in fiscal year 2014 and 2015, respectively, while the ERS 3.0 performed a detailed analysis on 29 private sector partnerships that ended in 2017.

Of these 29 partnerships, 28 demonstrated sustained results by the definition above while 18 were able to scale their results following the end of the project. While the full summary report provides more detailed information, these five key takeaway messages provide practical recommendations to practitioners in the field.

  1. Market-oriented approaches drive scale post-partnership

It may come as little surprise that when private sector partners are involved in partnerships that advance their market interests, they are more likely to scale and sustain. Within the study sample, 12 of the 17 (71%) market-oriented partnerships scaled outcomes or activities once USAID funding ended, unlike the non-market-oriented partnerships where only 6 of 11 (54%) scaled. Unlike more philanthropic-oriented projects, private sector partners had a vested interest in seeing the success of the partnership continue long-term and often achieved this scale in project outcomes by establishing new market linkages or enabling new customer segments. In addition, partnerships with market-oriented approaches often scaled without involvement of additional partners or donors, instead relying on private sector actors and beneficiaries alone. This suggests that engaging actors directly involved in value chains, especially those that benefit directly from them, can be a good way to ensure sustainability and scale post-project. 

2. Private sector actors that contribute their most distinctive assets support scaling

For the ERS 3.0 study, partnerships were categorized according to the types of assets that each actor contributed. Highly distinctive assets were defined as assets that were unlikely to have been as effective coming from other partners, such as relationships, brand value, or proprietary information that are unique to a private sector partner. In contrast, less distinctive assets include contributions that could have come from any actor and had the same effect, such as funding. 

Partnerships where the private sector partner contributed highly distinctive assets scaled more often than partnerships where less distinctive assets came from the private sector. For example, in the Ghana Advanced Maize Seed Adoption partnership, the private sector actor contributed a highly distinctive asset in the form of its white hybrid variety maize seeds. Of the partnerships where private sector actors contributed distinctive assets, 76% (13 out of 17) scaled, far more than the 45% (5 out of 11) of projects where private sector actors contributed less distinctive assets such as capital.

This suggests that private sector actors have a large variety of contributions to bring to the table – focusing exclusively on their monetary contributions is not likely to yield the best results. Instead, consider highly distinctive assets that private sector actors could contribute when engaging with potential partners across value chains. 

3. Local private sector partners were more likely to continue their contributions to sustaining success

The ERS 3.0 study included a mix of projects with local or international private sector actors; 14 projects included local private sector partners while 15 included global private sector partners. The difference in contributions post-partnership was dramatic – 93% of the local private sector partners continued their contributions (of all kinds of assets, see above), while only 57% of global private sector partners continued their involvement. In many cases, partnerships that involved global private sector partners were able to sustain their outcomes through the continued involvement of beneficiaries or government partners, rather than through the private sector. 

It is easy to understand local private sector actors’ motivation for continuing their involvement as 100% of these partnerships were aligned with their commercial interests. These partnerships often sustained through establishing or expanding market linkages, as many value chains projects attempt to do. This finding suggests that the best place to start looking for private sector partners is usually close to target communities. While international private sector partners have an important role to play in creating global market linkages, the commercial interests of local, national, and/or regional private sector actors may be key drivers of success in sustaining linkages and benefits post-project. 

4. Engaging government and beneficiaries in private sector partnerships also facilitated enduring results

Alongside private sector actors, government and target community actors were also critical to the success of many of the partnerships studied. Of the 28 partnerships that sustained results, 19 (68%) engaged beneficiaries in the design or implementation of activities. For example, the Low Emissions Cattle Farming partnership in Costa Rica worked with farmers to trial and demonstrate livestock emissions reduction initiatives, who then gave their feedback and recommendations to the national government for the new practices to be included in their national strategy. Government actors play a critical role in scaling partnerships as well, which can happen when government stakeholders scale partnerships through funding, policy change, or integration into systems and structures. Public sector actors played a role in scaling 10 of the 18 (56%) partnerships that achieved scale after USAID involvement ended.

Engaging government actors and beneficiaries in project design are best practices that apply to private sector partnerships as well. These findings suggest that achieving buy-in and a common vision between private, public, and community stakeholders can be an important step in creating successful projects that produce sustainable results.

5. In the most successful projects, private sector partners were included from the beginning 

In the partnerships included in ERS 3.0, private sector actors played a key role in developing project activities, with 17 of the 29 (59%) partnerships initiated by private sector actors. These projects were more likely to sustain and scale than those initiated by other actors, as seen below. In addition, 75% of sustained partnerships and 78% of scaled partnerships were based on pre-existing relationships between the private sector and implementing partners or USAID. 

This result is suggestive of the increasing role of private sector actors in driving the development of their communities. Including their perspectives from the outset – rather than bringing them to the table at the last minute – is more likely to achieve success. In addition, cultivating relationships with private sector actors that do not revolve around the project cycle can create opportunities for ongoing dialogue and private sector-initiated projects. Evidence from the ERS 3.0 report suggests that these types of partnerships are more likely to sustain and scale.

Acknowledgements

This report was produced for review by the United States Agency for International Development. It was prepared by Accenture Development Partnerships with input from the United States Agency for International Development and Catholic Relief Services as part of the LASER Buy-In: Building the Evidence Base on Effective Private Sector Engagement Phase 2 Project and does not necessarily reflect the views of the United States Agency for International Development or the United States Government. This study is conducted under the Long-term Assistance and Services for Research Partners for University-led Solutions Engine (LASER PULSE) project. The project is funded by the United States Agency for International Development (USAID), under Cooperative Agreement AID-7200AA18CA00009.

Leave a Reply

Your email address will not be published.

Note: You can use basic XHTML in your comments. Your email address will never be published.

Subscribe to this comment feed via RSS