USAID improving private sector competitiveness (IPSC) activity : mid-term evaluation

The evaluation assesses the project’s performance from inception to June 30, 2023, focusing particularly on the most recent 13 months as this period comprises all of the technical implementation. Implemented by Deloitte Consulting LLP in close partnership with the Government of Vietnam (GVN), specifically the Agency for Enterprise Development (AED) under the Ministry of Planning and Investment, IPSC is a USD$36.3 million, fiveyear contract ranging from December 2020 to December 2025. IPSC aims to help the GVN harness the entrepreneurial spirit of Vietnam’s small and growing businesses (SGBs) to facilitate a dynamic, Vietnam-led private sector transformation to one that can compete globally and increase equal opportunity for all, including disadvantaged women and ethnic minorities. The MTE aims to assess the Activity"s progress against its objectives, review the delivery of IPSC"s interventions and its coordination with the GVN, and make actionable recommendations for the remaining IPSC implementation. The evaluation employed a mixed methods approach using quantitative and qualitative data collection and analysis and triangulated data from various sources, including secondary data from a desk review and IPSC’s key performance indicators, progress reports, technical documents, and primary data collected from 40 key informant interviews, one focus group discussion, and an online survey of 199 SGB respondents. The MTE found evidence that, despite delays stemming from slow approval processes and the impact of the coronavirus disease 2019 (COVID-19) pandemic, IPSC is on track to achieve or exceed its indicators and achieve the goals of its overarching Theory of Change (TOC), as suggested both from the project Monitoring, Evaluation, and Learning System and from qualitative and quantitative evidence generated through the evaluation. IPSC has made a continuous effort to identify SGBs’ needs to assist them accordingly with the project’s scope, including women and minority-owned businesses. In the process, in close consultation with AED and USAID, IPSC has evolved its focus to support a range of different types of enterprises, especially toward providing tailored support to pioneering enterprises (PEs). IPSC has also adapted its project interventions into Support Packages aimed at working more cohesively. The project has also adopted gender mainstreaming to ensure that women and their businesses benefit from the project, and it has made deliberate efforts to understand the needs of and support SGBs owned by vulnerable populations. The project has helped boost the Business Development Services market for SGBs and built the capacity of GVN agencies at both the central and provincial levels. Furthermore, by working on policy-making proposals and policy action implementation, IPSC has helped strengthen evidence-based policy decisions. However, while there are emergent results, the project has only completed 13 months of technical implementation, and as such, the MTE could not determine the magnitude and sustainability of the project’s contribution to improving SGB and PE competitiveness measured in terms of increased revenue, access to new markets, greater efficiency, and better management practices. The evaluation also found that IPSC has implemented the PE Pillar at a slower pace, but this appears to be quickening at the time of the MTE following extensive engagement with AED and USAID. The evaluation also found that individual small and medium enterprises often find it challenging to influence policy development, and the capacity of business associations to do so is still limited or needs further strengthening. This finding suggests that IPSC could do more to support these actors to engage constructively in policy; however, IPSC has managed to work with a range of stakeholders to inform its policy work in positive ways. The project now faces the challenge of switching focus from extensive output delivery to intensive support on improving the competitiveness of Vietnamese SGBs. AED, USAID, and IPSC have made a number of programming decisions recently to address these issues and set the project on a course for success in its final years of implementation. Recognizing the value and effort put into these processes, the report posits recommendations to IPSC, USAID, and AED related to the project’s three pillars, ranging from project TOC to its scope, focus, strategies, monitoring, and sustainability.