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The development sector (also referred to as third or charity sector) is a business model, one that is praised for having a social conscience but also criticised for having an ineffective way of operating compared to the private sector for example. There is no doubt that the expansion of the third sector has filled a void left by uninterested or unable governments and other key players to adequately cater for societal needs but it’s untamed and unregulated expansion has also created a new set of issues. 

In countries with a high prevalence of development businesses, which is the case in many parts of Africa and Asia such as in Ethiopia and Bangladesh, the power balance is skewed towards the NGOs, to the point that national political agendas and research programmes comply with foreign donor interests. The main complaint from beneficiaries is the low local ownership and short life span of impact of these interventions, which result from a patronising approach to helping others, a lack of understanding of the local contexts and a rather simplistic approach to solving complex issues.

Moreover, the development business inhibits the private sector, mainly by functioning on the provision of free services and/or products which annihilate the existence of markets that private businesses could explore or develop. These type of business models also take away from development models that are trying to move away from freebies to enabling self-sufficiency. People worry such models do not provide opportunities for locals to critically consider what it is that they really need for their development and who is best placed to help them.

In contrast to the private sector, which needs to be efficient and whose customers’ satisfaction dictate their success and longevity for the most part; the development sector only needs its donors to function. This in some cases is the equivalent to private companies surviving on subsidies and bailouts.

Assessing whether the intended results were achieved is only now best practice, with many NGOs still not evaluating this, and when they do it it tends to be an accountability tool for founders only. You do not hear of development models that spend resources giving account to beneficiaries and involving them in the fine tuning of efforts or replication in other parts of the world. 

This clearly needs to change. I wonder if at some point the evolution of the development sector will have NGOs pitching to potential customers in the developing world, trying to maximise value for money in order to increase interest and compete against each other and better coordinating efforts in order to deliver a more complete development service/product to those who need it and request it; while at the same time providing access to formal structures for complaints, refunds and other remedial measures to beneficiaries as standard practice.

Maybe in another 20 years? What do you imagine the development sector will look like in the far future? Leave a comment below and please share this blog if you liked it or found it provocative.

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2 thoughts on “A new development business model

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