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UNDPs approach to private sector development

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Stephan Schmitt-Degenhardt

on 28 September 2012

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Transcript of UNDPs approach to private sector development

UNDP's Private Sector Structure Teams:
Inclusive Green Growth
Inclusive Globalisation (~ Trade)
Economic Governance (~ Employment)
MDG Support Priority Action Areas

Action area 1: Strengthen global regional and country level work with private sector actors related to key UNDP medium term priorities and outcomes. Strengthen UNDP’s outreach and advocacy to the private sector, including by senior management, around key strategic UNDP priorities. Engage in and facilitate private sector participation in relevant national/regional/global policy dialogues e.g. post BUSAN, G20, Post 2015. Track and incorporate private sector perspectives’ and expertise in all thematic areas.

Action area 2: Streamline procedures and improve reporting to ensure more strategic and efficient engagement with private sector. Review and update UNDP’s processes for due diligence of potential private sector partners . Monitor, support and report to senior management on the implementation. Review of prescriptive content (POPP) and appropriate instruments that allow for effective and innovative engagement with the private sector.
ntroduce an indicator on private sector engagement to better track UNDP’s private sector engagement and collaboration across focus areas in the ROAR.

Action area 3: Strengthen internal knowledge and capacities to work and partner with private sector through investment in staff capacity and knowledge support to country offices. Ensure that designated staff in UNDP’s practice areas, Central/Regional Bureaux including desk officers to serve as focal points / advisors on private sector engagement and development are trained and equipped to do so.Provide designated staff with training, guidance notes, case studies and appropriate tools to strengthen staff capacities in engaging with the private sector. Incorporate private sector segment in senior management induction courses (RC, CD).Refine the role of the Istanbul Center (IICPSD) regarding the interphase with COs, central (BDP, BCPR) and regional bureaux, regional centers. The IICPSD will support capacity development stakeholders for inclusive business planning and inclusive partnership platforms. Strengthen the existing UNDP Private Sector Community of Practice (COP) launched in 2008 (470 members). Strategy for Working with the Private Sector (2012) PSE part of PS strategy 2007 'needs updating'
- focuses primarily on strengthening the PS and inclusive markets for economic development and poverty reduction but does not sufficiently articulate how the work with the PS links to other UNDP focus areas
- a balance between PSE and PSD is necessary in order to bring about paradigm shifts in the way business is done to encourage the creation of inclusive markets for sustainable growth.

PS strategy 2007 still valid - 2012 strategy complements Key corporate principles for UNDP’s engagement with the private sector

Sustainable human development, inclusion and equity

Multi-stakeholder approach and civil society involvement

Results and measurability

Specificity and strategic significance

Relevance to core interests of the private sector

Value for money

Limit global initiatives which do not closely link to country level results

Visibility and branding

Risks and due diligence All UNDP’s work with the private sector ultimately aims to contribute to the achievement of sustainable human development and more inclusive and sustainable markets, including the following key aspects of human development: Social progress, Economic empowerment and equity, Gender equality, Resource efficiency, Participation and freedom

UNDP’s engagement with the private sector will be based on a multi-stakeholder approach, engaging government, civil society as well as private sector.

The private sector is results focused and UNDP is committed to being a results-based organization. The organization will follow the standards for results measurement developed by the Donor Committee on Enterprise Development (DCED) and other relevant Results Based Management (RBM) tools.

Achieving measurable results requires focus and specificity. In our work with business we will focus on UNDP’s strategic priority areas where we offer expertise. We will avoid open-ended general engagements. We will take a pro-active and targeted approach in our outreach and will clearly communicate our priorities.

To ensure sustained engagement and in order to maximize development impact, UNDP will prioritize its work with the private sector in areas that are of relevance to the common core interests of both UNDP and the private sector partners.

UNDP will ensure engagement with the private sector is of sufficient scale to deliver impact and value for money. We will seek to consolidate small or ad hoc projects and aim to engage with more strategic private sector coalitions, moving beyond one-on-one partnerships with individual companies that are of limited scope. Partnerships with potential for multi-country interventions will be encouraged to harness economies of scale and shared risks.

Exceptions will be made when initiatives support the corporate agenda for change and/or leverage UNDP’s leadership roles.

We understand the importance to the private sector of visibility and recognition and will give due recognition to our private partners and highlight our work with the private sector, in line with our rules and regulations and in keeping with UNDP’s impartiality.

UNDP partner companies (particularly large and international companies) must comply with environmental, social and governance standards based on UNDP Guidelines for private sector engagement and the 2009 Guidelines on Cooperation between the United Nations and the Business Sector. Outcome 1: Sustainable and Inclusive Economic Growth (with special focus on key pro poor economic sectors, markets and geographic regions)

Outcome 2: Economic Strengthening in Fragile States and Regions 1. Engaging with and supporting the development of the private sector 2. Partnerships with UN organizations, IFIs and new development actors to leverage additional technical capacity and resources and to foster innovation for its private sector engagement and development work. 3. Signature alliances and programs Private Sector Engagement
•Public-private policy dialogue and collaboration platforms
•Partnerships directly between UNDP and companies/alliances/coalitions, including South-South
•Advocacy and Awareness Raising
•Innovative use of finance and grants Private Sector Development
•Supporting the policy and institutional infrastructure for enterprise and inclusive market development
•Facilitating integration of poor producers/other market actors in key value chains / economic sectors
•Brokering private investments in pro-poor goods and services
•Supporting and stimulating entrepreneurship development Signature Alliances related to Outcome 1: Sustainable and Inclusive Economic Growth

“Building Tomorrow’s Markets”
Energy Access for Productive Use (linked to Sustainable Energy for All)
African Facility for Inclusive Markets (AFIM)
Significantly strengthen and improve Sustainable Development Impact of Extractive Industry (UNDP corporate strategy under development) Promoting Inclusive Market Development (2007) Major global private sector programmes:
- Growing Inclusive Markets (GIM)
- Growing Sustainable Business (GSB)
- Public-Private Partnerships for Service Delivery (PPPSD) Figure 2. Contrasting Approaches to the Private Sector and Development

The Current Portfolio The New Approach

Many small projects Fewer larger projects

Focus on downstream delivery Greater focus on upstream policy
reform and systemic market facilitation

Indirect or indeterminate poverty reduction Direct, measurable poverty reduction
impact impact

Focus on enterprises, especially micro- Greater focus on integrated value-
enterprises and SMEs chains and pro-poor market outcomes

‘Single factor focused interventions’ (e.g. Multi-faceted, multi-factor
BDS, micro-credit) approaches to value chain blockages

Implicit objective to create employment Explicit objective to expand choice
opportunities for the poor and opportunity for the poor as
producers, employees and consumers

Emphasis on ‘cross-cutting’ enterprise Greater emphasis on sectoral
support measures targeting - working in specific market
sectors that offer ‘decent work’
opportunities, and expanded range of
goods and services to the poor

Partnerships with companies based mainly Strategic partnerships focusing on
on ‘traditional’ CSR interests i.e. social core business activities and
investment and philanthropy competencies that contribute to
inclusive market development and
empower the poor as entrepreneurs,
employees and consumers

Relationship to PSE coincidental / PSE as a conscious and deliberate
overlapping (‘PSE for PSD’) modality for pro-poor market
facilitation based on viable and hence
sustainable ‘win-win’ investments Priority 1 – Establishing the Policy and Institutional Infrastructure.


Priority 2 - Facilitating Pro-Poor Value Chain Integration.

Priority 3 - Brokering Investments in Pro-Poor Goods and Services.

Priority 4 - Fostering Inclusive Entrepreneurship.

Priority 5 - Encouraging Corporate Social Responsibility in support of Inclusive Organisational anchoring Private sector CoP Country Offices RBEC/BRC Poverty practice
- Private sector advisor
- Trade advisor
- Rural development advisor New York BDP
- Poverty practice BERA Strategic anchoring Knowledge hubs / Centres of excellence Singapore: Global Centre for Public Service Excellence (Sep 2012) Turkey: Istanbul International Centre for Private Sector in Development (2011) Poland: Knowledge hub on social innovation (under BRC) Brazil: International Policy Centre for Inclusive Growth (under BDP) Switzerland: Trade and Human Development Unit (under BDP) Objectives:

1) Support the development of inclusive and competitive markets and inclusive business models that engage poor people into value chains as producers, employees, consumers and entrepreneurs, with the end goal of economic development.

2) Foster private sector engagement and advocacy with for example, the UN system for achievement of MDG targets (especially on focus sectors like health, agriculture, education, housing and water and themes like youth, gender, environment) and other internationally agreed development goals (e.g. climate change)

3) Become a center of excellence in terms of capacity development activities that harness Trilateral Development Cooperation and South-South partnership, and promotes skill-building, access to enterprise-related finance, entrepreneurship and assistance to enabling actors4) Convene business and supporting actors to expand dialogue and create actionable partnerships between themselves, in support of a development agenda

The objectives will be achieved as a one stop shop service delivery center through research, policy advisory and advocacy, knowledge development and management, MDGs-based partnerships, programme support and capacity development.

PS Strategy 2012: IICPSD will play a key role in providing additional support and guidance across strategy areas, with particular focus on catalyzing partnerships, supporting research and advocacy and coordinating the UNDP private sector Community of Practice. Etc. Recognising that for
markets to work for the poor, they must first work. UNDP will support governments that
wish to promote the development of rule based, non-discriminatory and inclusive markets,
including robust and transparent market institutions that promote competition whilst
safeguarding the rights of poor entrepreneurs, employees and consumers. Wherever feasible
and appropriate UNDP will seek to complement the work of the policy reform efforts of the
World Bank other international organizations and donors, focusing on policy reforms that
benefit the poor directly. As part of this effort UNDP will assist governments to introduce
pro-poor market reform policies into PRSPs and other strategic planning frameworks.

Inclusive markets are defined partly by their ability to generate significant employment opportunities for the poor as self-employed producers or wage employees. UNDP will therefore support the development of integrated value chains in market sectors that offer the prospect of sustainable growth and transition to higher valued added and better remunerated forms of employment. Priority will be given to commodity product and services markets characterised by a high labour intensity.

Inclusive markets are also defined by their ability to increase access to important goods and services that contribute tangibly to the reduction of income and non-income forms of poverty. Building on existing programmes in this area, 18 UNDP will facilitate research and development that leads to the identification of viable ‘bottom-of-the-pyramid’ investment opportunities and business models and will work with key international and national investors to realize these. Support will also be provided for development markets for pro-poor goods and services, with special emphasis on key factor markets.

Inclusive markets require the poor to take advantage of new opportunities and become agents in their own economic empowerment (Unleashing Entrepreneurship). UNDP, in conjunction with other UN agencies, development partners and the private sector, will support the design and delivery of new entrepreneurship development initiatives that will be tailored to local opportunities and delivered through the private sector.

Market Development and the MDGs. Recognising that Corporate Social Responsibility
has become a central consideration in the investment decisions of multinational companies
as well as an increasing number of small and medium-size enterprises, UNDP will continue
to advocate for the use of CSR resources in ways that contribute to the development of
inclusive markets, producing sustainable long-term benefits rather than short-term visibility
or dependency. UNDP will therefore encourage Corporate partners to align their CSR
activities more closely to the achievement priorities 1-4 (above). UNDP will also continue to
advocate for the alignment of CSR investments with national and local development
priorities that cannot be addressed through market mechanisms, including in support of
UNDP’s own four focus areas as expressed in the UNDP Strategic Plan 2008 - 2011.
More sustainable and inclusive economic growth achieved by promotion and development of sustainable enterprises in key pro poor economic sectors (e.g. climate resilient green agriculture commodities, sustainable energy and maximizing impact of the extractive industries etc.), markets and high risk geographic regions.

Sustainable human development, inclusive growth and job creation in fragile states achieved through early engagement of and support to the private sector in reintegration, job creation and peace building processes. Priorities / outcomes Strategies / approaches Global programmes / signature alliances Private sector engagement and partnership management, including global advocacy and outreach to private sector and other partners that UNDP engages with in its private sector work Private sector development policy advice and capacity development (together with Bureau for Crisis Prevention and Recovery (BCPR)) Programming, implementation, engagement at the country level, monitoring, reporting and oversight
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