In 2021, the Feed the Future Advancing Women’s Empowerment (AWE) Program trained USAID Mission staff in Latin America on evidence-based approaches and best practices for working with the private sector on inclusive development activities. As part of the training, AWE shared the experience of USAID/Honduras and USAID/Colombia on conducting and using inclusive market system research to improve economic growth programming.

Background

Inclusive market research is similar to traditional market research, except that it intentionally examines the economic and market-specific barriers and opportunities of traditionally excluded groups, such as women, youth, people with disabilities, people from the LGBTIQ+ community and ethnic minorities. Conducting inclusive market research allows USAID Missions to design programs and activities that increase economic development without leaving behind traditionally excluded populations.

Inclusive market research helps show how markets affect vulnerable groups and helps identify key sectors and private sector partnerships with potential to engage and benefit a range of actors typically excluded ― or even exploited ― by traditional market systems. To make markets more inclusive, USAID Missions and implementers must understand the local context, the idiosyncrasies of the systems in which they work and how these affect different segments of the population. Findings from inclusive market research may additionally reveal hidden risks and bring light to risk mitigation measures that need to be undertaken.

What are the benefits of inclusive market research?

During the seminar, representatives from two USAID Missions, Jorge Reyes Reina from USAID/Honduras and Natalie Renaud from USAID/Colombia, showcased how applying an inclusion lens in market research was instrumental in the design of two flagship activities in the Latin America and the Caribbean region: the Generating Equity Activity in Colombia and the Transforming Market Systems (TMS) activity in Honduras. Conducting inclusive market research allowed USAID/Honduras to discover potential in entirely new sectors and niche areas where women and youth could thrive. Findings from the USAID/Honduras market research revealed that youth who see migration as a better economic option than working on farms could be enticed to work in farming by developing businesses that provide services at different points along the value chain. Pivoting agricultural investment from traditional crops, such as potatoes, to higher value crops, such as blueberries, created a new niche of farm services that youth could provide by forming small businesses.

Below are the key ways in which inclusive market research supported economic growth activities for both of these Missions:

Identification of economic sectors for which integration of women, youth and other vulnerable populations is easiest and most beneficial.

Inclusive market research can help uncover new and innovative opportunities in nontraditional sectors and roles for disadvantaged groups. This was the case for the TMS Activity, which expanded into nontraditional sectors ― including tourism, creative industries and entrepreneurship services ― because of these sectors’ potential to integrate and benefit poor and marginalized groups. This signaled an important shift in USAID/Honduras’ priorities, which had traditionally been centered on strengthening agricultural systems. Jorge Reyes Reina highlighted that:

We selected sectors that were more attractive to women and youth, our priority populations. Instead of sticking with our typical core interventions and trying to shoehorn these priority groups into them, we instead tried to identify economic sectors that could more easily integrate these groups.

Identification of potential partners who are willing to promote and invest in social change.

Inclusive market research is not only useful in identifying stakeholders and their incentives and capacities to perform different functions, it can also help identify those with the potential and willingness to act as agents of change. Through its research efforts, USAID/Colombia identified key actors ― particularly within the private sector ― interested in or currently investing in different domains of female empowerment. Natalie Renaud highlighted that:

One of the assumptions we had was that the private sector was not interested in investing in preventing gender-based violence (GBV). Inclusive market research helped us realize that there were a lot of companies that were interested in GBV work, not only from a Corporate Social Responsibility perspective, but as part of their core work.

Codevelopment of a roadmap for market development that is inclusive of women, youth and other vulnerable populations.

Inclusive market research can help Missions, implementing partners and private sector partners codevelop an economic growth roadmap that ensures the inclusion of women, youth and other traditionally excluded populations. Both USAID/Colombia and USAID/Honduras found that despite inclusive market research requiring a large time investment from all parties, the involved stakeholders ultimately came to a shared understanding of the investments needed to inclusively grow a variety of economic sectors. Natalie Renaud stated that:

[This research] is really very useful not only for the solicitation but also once the for the activity has been awarded it will give you a roadmap to follow.

For example, in Honduras, the research was conducted in close collaboration with the private sector and academia. They were able to identify the key growth constraints for certain industries and come up with mid- and long-term plans to address them. The research has become the roadmap for private sector investment and has provided data to support lobbying for greater government investment in specific areas. For example, using data from the research, chambers of commerce are lobbying to include chamber facilities in airports that would allow exportation of high-commodity fruits and vegetables by planes. Having the facilities in place will allow for new cash crops and industries servicing the production of those crops to develop.

Stronger partnerships with the private sector.

Inclusive market research can help Missions and implementing partners develop stronger, more committed relationships with companies, who now feel they have a stake in the process and that their voices have been heard. This was the case for USAID/Honduras and the TMS Activity, which spent time speaking to and codesigning activities that are responsive to private sector partners’ business plans. Jorge Reyes Reina noted that:

In the long run, [building buy-in] will actually lead to stronger partnerships, where you actually have partners that are willing to put some real skin in the game because you've invested the time to create those relationships with them and to identify interventions that are actually aligned with their core business… and to really make it part of their of their central business.

What are the roles of Missions and implementing partners in conducting inclusive market research?

In conducting inclusive market research, the Mission and implementing partners should leverage their strengths to convene and implement with private sector partners. Natalie Renaud highlighted the importance of the Missions’ convening power to bring various actors to the table. Missions are key to nurturing these relationships.

Jorge Reyes Reina shared that, in turn, implementing partners should ensure the commitment to inclusion is present in all activities. Implementing partners can require inclusion standards within their Memorandums of Understanding (MOU), partnership agreements and grant agreements with private sector partners to leverage inclusive economic growth.

The Designing a Strategy for Private Sector Engagement: Conducting and Using Inclusive Market Research learning seminar was the second in a three-part series with USAID Mission staff in the Latin America and Caribbean regions. The AWE Program will implement this learning series in two additional regions. The next learning series will be conducted with USAID staff from East and Southern Africa.