Engaging with the Private Sector for Capacity Development

Many donors have under explored the potential role of the private sector in encouraging development. A new report offers some conclusions on how the European Commission, and its staff in Delegations, could better work with the business community to achieve development.

Olivier Clark, co-author of the report ‘The Role of Private Sector in Development’, believes that donors could do more to harness this potential ally in the fight against poverty.

For EC staffers working in Delegation, Mr Clark recommends greater dialogue with the private sector representatives working in their region.

“Talk with the private sector,” said Mr Clark, “which means reaching out to companies, some of which may not speak their language or may have completely different mentalities.”

“It’s not something that’s spontaneous,” he said. “It is difficult, it requires courage and it requires energy and it is not something that is in the cultural grain of the delegations or of the European Union.”

To see a video interview with Mr Clark, click on the icon below.

In their report, which was commissioned by the EC, the authors stress the important role the private sector plays in job creation and income generation and that “donors cannot remain aloof from the major economic and political trends that are restructuring the balance of overseas development assistance.”

Some of the obstacles to greater cooperation between donors and the business world lie in administrative and cultural differences.

“The ‘culture of results’ that prevails in companies is different from the ‘culture of process’ that is common in Multinational and Public Institutions,” states the report.

But such challenges are not insurmountable and donors would be advised to collaborate with the private sector, as they are already contributing to capacity development.

“Any company - as far as I’m concerned, any company, large or small, from any country that is working in any developing country - is adding capacity,” said Mr Clark.

Whether it’s by training staff, refusing corruption or seeking out new markets, the private sector already exists as an important vector for change and development.

“Capacity building is not something that’s grafted on to local society; it’s something that’s built in to any economic activity big or small,” he said.