The Market Corner: Charting the Evolution of the Market Systems Approach

This blogpost is one in a series of blogs sharing insights gained from the Market Systems Symposium 2023. The MSS blogpost provides a brief snapshot of key insights shared across a number of different sessions in MSS 2023 held in Cape Town between 13-15 November 2023.

In the vast expanse of global development, where complexity too often reigns alongside chaos, a symphony of collaboration is playing out, weaving together diverse contexts and perspectives. The 6th annual Market Systems Symposium 2023 is bringing esteemed practitioners of Market Systems Development (MSD) to share insights and experiences, shedding light on the intersections of MSD with the three key themes this year: food security, conflict, and climate change. Kristin O'Planick, Market Systems Team Lead at USAID, and Elisabet Montgomery, Senior Policy Specialist Market Development at SIDA—both key figures in the donor working group on MSD—offered opening remarks and a glimpse into the evolving space of market systems development.

Ms. O'Planick highlighted the evolution in the space of MSD within USAID. From what was once akin to what she describes as a “guerilla warfare" at USAID, the focus has shifted to a more visible and accepted approach across the agency. Systems development is gaining recognition, prompting more inquiries about integrating a systems approach across other development efforts. The concept of market systems development is gaining traction beyond its initial narrow focus, encouraging a broader systems-thinking lens in the design and implementation of development programs. The emphasis is also no longer solely on achieving individual donor victories but on institutionalizing this approach across programs.

SIDA’s journey was similar, according to Ms. Montgomery. Just a decade ago, MSD was a novel approach with limited buy-in at the management levels within the agency. Today, it has become a cornerstone, with projects spanning diverse areas such as labor markets, conflict, climate change, and others, including global initiatives with organizations such as the International Labor Organization (ILO) on systems change. The conversation around MSD has deepened over the years, with more textured and nuanced discussions on practical examples.

Both representatives acknowledged the challenges inherent in MSD approaches. Ms. O’Planick highlighted the complexity of holding space as a donor, given the inherent limitations of a five-year project cycle. MSD approaches often take time before results are apparent, which is not easily captured in the short-term reporting requirements of most donor organizations. Storytelling becomes challenging when results take time to manifest. Rapid uptake and understanding among agency staff are crucial, and there are increasingly effective training curricula on market systems approaches.

Ms. Montgomery emphasized the technical complexity and the open-ended nature of MSD approaches, leading to a need for patience among donors. Communicating the approach, its intricacies, and the time required for results is vital. The conversation highlighted the importance of fostering knowledge and capacity on both sides of the donor-implementer partnership. Ms. Montgomery underscored the need for the donor organizations to work closely with the implementing partners and enable them to experiment and facilitate learning from applying the MSD approach in different contexts.

The opening remarks from the two donor representatives at MSS 2023 revealed a transformative and still evolving journey from skepticism to acceptance, from narrow focus to systems thinking. It emphasized the necessity of patience, learning, experimentation, and effective communication to navigate the challenges posed by complex, short-term development projects applying the MSD approach that often manifests results in the long term.