Economic development: introducing options, not bringing solutions

3 August 2015

In this blog, Marcus Jenal and Shawn Cunningham, contributors to the Business, State and Society: Changing Perspectives, Roles and Approaches, call for a more exploratory approach to achieve locally adapted solutions.

Indian carpenter. Credit:

The company we work for, Mesopartner, supports development organisations to address the challenge of innovation and change towards economic development, cluster and value chain promotion and the strengthening of local innovation systems.

In our work in economic development, we often find ourselves in situations where we don't know which interventions will work and what exactly a good outcome will look like.

As a result, those working to plan and deliver development interventions may have divergent views on what must be done and why. These situations are complex (PDF)  and uncertain (following Frank Knight's definition of uncertainty).

Under conditions of uncertainty, traditional approaches for planning and risk management don't work

This is not down to incompetence or lack of adequate resources.

Rather, it's due to high risk of unanticipated consequences when introducing external solutions to a highly interconnected systems.

Externally designed solutions cannot anticipate all the influences they face once they are put into practice because the economy is not static, agents are constantly adjusting their behaviour.

Many development programmes are shaped by head office or funder preferences for a specific impact, for example reduced inequality, focus, for example on micro and small enterprises, or even instruments to be applied, for example value chain development. Such an approach is likely to create local optima producing the asked for impact for the particular focus group in unsustainable ways.

In contrast, solutions that get developed locally are constantly tested and shaped by the system they are exposed to. Bottlenecks are not selected based on funder preferences but on their effectiveness in tackling system-wide issues.

To find locally adapted solutions, a more exploratory approach is called for.

In our view, development programmes and practitioners should see their role as working with local counterparts to introduce options and variety into a given context. This must be done with sensitivity and care to ensure that local confidence and understanding is built and not destroyed. Some of these options can evolve into locally adapted solutions. Such an approach encourages development actors to help stakeholders explore options beyond what seems to be optimal or silver bullets from the donor's perspective.

A theoretical example - a development programme aiming to strengthen small enterprises in a particular sector

Imagine a development programme hosted by a regional development agency in a developing country supporting the strengthening of small enterprises in a particular sector, for example wooden furniture production.

Let's say that, in this case, the agency has a broadly framed objective to "support the creation and increased competitiveness of small enterprises". Its implementation team then interprets this intent into plans that are focused mainly on a selected group of small enterprises and on the provision of capacity building activities.

After a while the team realise that, while their interventions aimed at their target group are showing positive results (for example new designs, better quality, lower wastage), the larger network that these enterprises are supposed to form part of (for instance, a national retail network; service providers such as transport, design or export brokerage) is not responding to these changes.

This means that the target enterprises will not be able to uphold the improved work for long and will most likely fall back into previous patterns.

In such a situation, a role of an external development programme could be to assist this development agency to:

  • explore different ways to introduce options for smaller companies to be linked into regional or international supply chains 
  • work with existing successful enterprises and key vocational institutions to strengthen the basic technical curricula in order to improve basic ability of new entrants to the labour market and with this anchor the improved capabilities in the region, or;
  • work with key buyers to make buyers’ demands and standards more explicit so that smaller enterprises can enter these supply chains.

Three phases to an exploratory, evolving approach to development

As an alternative to the classical analysis-design-implementation logic, we suggest an approach that is based on three closely inter-knit phases that organically evolve into each other and might overlap at times, which is outlined in our article ‘Explore, Scale Up, Move Out – Three Phases to Managing Change under Conditions of Uncertainty’ published in the latest issue of the IDS Bulletin.

  1. Instead of starting with an analysis, an initial exploratory phase focuses on developing and implementing a portfolio of exploratory activities.
  2. Evolving out of the exploratory phase, we can scale up interventions and solutions that were found to work in a consistent way, spending more resources on them to see wider spread change, amplifying what seems to work best while dampening down what seems not to work so well.
  3. A move-out phase can subsequently focus on capitalisation and communication with the intent to capture learning and communicate achievements, or letting go and allowing local stakeholders take the lead while we support their efforts.

To give direction to such a process and enable development projects and their stakeholders to make a judgement on whether the change that is observed is positive, we suggest agreeing on a strategic intent rather than a fixed goal or target. This means that we set out in a broad direction, open to more precise objectives and targets that may become possible or visible along the way as our understanding of what is possible and what is desirable develops.

These suggestions are based on our experience in working in economic development and our study of complex systems sciences and complexity thinking. Again - opportunity for example here.

Until now, Mesopartner's work has predominantly focused on helping existing projects based in developing countries when they are stuck, or when they acknowledge that their original planned approach is not yielding the desired results. In a sense, this is easier than trying to set up a completely new project that is following all principles and heuristics of emergent approaches. Thus, we need to take an experimental approach to introducing three phases of exploration, scaling-up and moving out as well.

To be able to do this, we need to find a donor that is ready to test these ideas and can also absorb some failure before we have come to a fine-tuned approach that works. Management and steering arrangements have to be developed and tested.

The relationship between donor and implementer has to shift significantly from one based on top-down control to one that is marked with the motivation to achieve change together.

Image credit: Dipayan Bhattacharjee - Flickr (CC BY-NC-ND 2.0)

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