Comparing Standard and Market Systems Development Approaches to Rural Employment

This is particularly evident when compared to the scale of rural unemployment. As a result, there is increasing interest in alternative approaches, including those that incorporate the principles of market systems development (MSD) into rural employment programs. Market systems development focuses on bringing about sustainable systems change to maximize impact. This approach has been successfully used in agricultural development programs to improve the incomes of thousands and hundreds of thousands of farmers. However, efforts to bring MSD principles into rural employment work have led to some confusion, particularly on the key differences between standard approaches and MSD approaches. Standard approaches to rural employment typically include a focus on training, whereby market actors such as Technical and Vocational Education and Training (TVET) centers are paid to provide training in a variety of soft and technical skills to the target group. It is also common for programs themselves to match job seekers to employers; to run apprenticeship or internship schemes; and to provide technical support and grants to participants to set up microenterprises or to grow their businesses and hire more people. However, these standard approaches are failing to have a significant impact, in part because opportunities to take an MSD approach—and thus achieve greater impact at scale—are often missed. The MSD approach differs from standard approaches in several key ways. One of the main differences is the focus on system change principles. MSD approaches focus on creating sustainable systems change, whereas standard approaches tend to focus on providing short-term solutions. Another key difference is the sector selection process. MSD approaches involve selecting sectors that have the potential for significant impact, whereas standard approaches often focus on sectors that are already well-established. In terms of the program lifecycle, MSD approaches involve a more iterative and adaptive process. This involves continuously assessing and refining the program's approach based on new information and changing circumstances. In contrast, standard approaches tend to follow a more linear and predictable process. The MSD approach has been successfully used in various contexts, including in fragile and challenging environments. However, there are still many questions and challenges associated with applying an MSD approach to rural employment. One of the main challenges is the need for a more nuanced understanding of the market systems and the potential for system change. Another challenge is the need for a more adaptive and iterative approach to program implementation. Despite these challenges, there are many instances in which an MSD approach could significantly enhance rural employment outcomes. The MSD approach offers a promising way forward for rural employment programs, particularly in contexts where standard approaches have failed to make a significant impact. By focusing on sustainable systems change and selecting sectors with the potential for significant impact, MSD approaches can help to create more sustainable and equitable outcomes for rural communities. In the following sections, we will examine the evidence for the MSD approach and explore in depth the differences the approaches suggest with regards to system change principles, sector selection, and across the program lifecycle. We will also look at remaining questions on applying an MSD approach to rural employment and note the challenges for integrating MSD into rural employment programs.