Inclusive growth refers to economic growth that reduces poverty by expanding opportunities for the poor, including microentrepreneurs and smallholder farmers.
USAID’s work with micro enterprise and microcredit is based on the idea that subsidies do not lead to sustainable development and that, instead of subsidies, market forces can be successfully harnessed to benefit the poor.
The business enabling environment is considered part of the system as are supporting markets that provide business services, such as finance, transport, and training.
The success of inclusive growth programs often depends on the ability to form effective associations that connect firms operating at the same level of the VC.
In many cases, associations forming such “horizontal linkages” require substantial local capacity development before they can contribute to inclusive growth.
Partnerships are needed to strengthen both the local economic sector and the larger system within which it exists.
By developing the inclusive market systems, we integrate small-scale suppliers into manufacturer value chains, or integrate very poor producers into an agricultural value chain. Thus, the market systems become more inclusive of all producers of all sizes.
Success often depends on the ability to create strong links between firms performing similar roles in the value chain.
Our members know that developing inclusive market systems requires local ownership from the start. Our approaches are grounded in a strong and early push toward autonomy and self-sufficiency for the local organizations.
Many of VEGA’s Members conduct programs to improve the market systems and make them more inclusive of all local actors.
In 2013, conducted research on two of these programs to uncover the best lessons and methods for improving the market systems.
IRPF – Uganda
Case Study Summary -The International Real Property Foundation (IRPF) partnered with real estate associations around the world to implement a systematic approach to strengthening the local marketplace. IRPF assessed, trained, and mentored, all the while guiding associations to act on their own behalf.
This case study discusses the highest level indicators for measuring IRPF’s impact are the number of sustainable, self-financing associations created or strengthened by IRPF and providing services to real estate professionals.
Land O’Lakes IDD – Kenya
Case Study Summary – This program was implemented by Land O’Lakes International Development to improve Kenya’s dairy industry competitiveness and increase incomes of small holder farmers through the sale of quality milk.
It exceeded targets related to its overarching goal of increasing smallholder household incomes. Smallholders were able to increase the quantity and quality of milk produced by their cows while also reducing production costs.
This case study reveals the impact and lessons learned from this program.