Notes from SEEP 2015: Partnering with the Private Sector

For development practitioners, the days of shying away from the private sector are over. The discussion has evolved from whether to partner to how – a shift that was on display at this year’s SEEP Conference. The overwhelming consensus at the four-day event was that private sector partnership models have become ubiquitous.

From zero-sum to win-win

One theme that came up in a number of panels at the SEEP conference was the need to align the goals and expectations of public and private sector actors in a partnership. In this way, it can be possible to turn a zero-sum situation into one that benefits both parties. Let’s have a look at some of the main trouble spots when combining development work with business opportunities:

The clock is ticking: Development work takes time – you need to leave room for feasibility studies, research, pilot projects, and a whole lot of figuring-out-on-the-go. All of these activities come under pressure when you have a board of directors expecting a quick turnaround. And the pressure can become even more intense when multiple private-sector stakeholders are on board.

Economies of (small) scale: Companies may feel more confident operating in more established markets and smaller opportunities may not seem compelling at first blush. It can be unfamiliar territory when companies and entrepreneurs try to figure out whether a niche opportunity is viable. 

Not just one public and one private actor: Partnerships are not just between one private-sector actor (a business) and one public-sector actor (a development organization); it’s often more complicated than that. Recipients of aid, like smallholder farmers, are also private actors working to maximize their gains. Similarly, host-country governments, which are answerable to their voters, are also public-sector entities that feature prominently in this equation. 

Deal-breakers, no more

So, are these problems too thorny to handle? In an interview with Microlinks, Olaf Kula of ACDI/VOCA shares his insights on how to find middle ground. Both sectors are aware that they have to start speaking each other’s languages and aligning their goals for their work to be effective, profitable, and sustainable. For development practitioners, access to billions of dollars in funds, state-of-the-art technology, and know-how is simply not something that they can afford to pass up. Similarly, for the private sector, merely setting up a CSR department no longer makes the cut. “They need to do CSR in every step of their supply-chain,” says Olaf. Companies know this is the future, he says, especially because of the social conscience of the millennial generation, who demand sustainable, fairly-made products.