Over the course of 2016, Shawn and I worked on a piece of research on systemic change in market systems development, funded by the BEAM Exchange. In this work, we question the utility of the concept of systemic change in market systems development (though this is valid in the wider field of economic development) as it is currently used and suggest a rethink. To do so, we went back to search for a fundamental understanding of economic change. This is what we found.
This blog post was originally published on the Website of CGAP as part of a series of blog posts on measuring change in market systems development under the title “New Funding Approaches Call for a New Way of Measuring Impact.” CGAP (the Consultative Group to Assist the Poor) is a global partnership of 34 leading organizations that seek to advance financial inclusion.
The focus of financial sector development is shifting. Development organizations funding financial inclusion now operate with a vision of sustainability, resilience and impact at scale, and their goals stretch beyond building individual institutions. Now, they aim to improve the whole ecosystem for financial services, taking a facilitative rather than a direct intervention approach. Continue reading
Economic development projects often struggle when it comes to scaling up the impacts of their successful interventions in order to reach a large number of people. Questions about how scaling up is done in a successful way have been asked in connection to various types of development interventions without finding a successful and definitive answer.
More recently, it is often said that scaling up happens quasi automatically or at least with much less effort when the interventions of a project are ‘systemic’. This can happen in economic development projects by actors copying new business models or when new business models in a specific market also benefit connected markets in a positive way. In the Making Markets Work for the Poor (M4P) literature, these phenomena are called breadth and depth of crowding in, respectively. At the same time, the M4P literature acknowledges that crowding in might only in particular cases happen by itself and needs further efforts by the projects, such as for example dissemination of information about the new and successful implementation of business models. It is then anticipated that companies learn about the successes of their peers and will try to imitate them and with that the change will proliferate through the system. Again, it is often stressed that this will only happen if the introduced changes are ‘systemic’. But what does systemic mean in this regard? There are three important aspects at play here. Continue reading