The Private Sector and Development: Key Concepts

Abstract

Development cooperation actors are looking to the private sector as a key partner for achieving sustainable development results, recognizing private firms as sources of innovation, expertise, and finance to be harnessed in addressing development challenges. At the same time, many private sector actors are increasingly going beyond their regular business operations to actively pursue inclusive, sustainable business models aimed at maximizing profits while contributing to development. They are seeing a convergence between their business interests and development priorities, such as improving the social and environmental sustainability of supply chains, and developing products and services for new markets, including populations living in poverty. The increasing role of the private sector in development presents new opportunities for collaboration between the public and the private sectors. However, different actors, including the private sector, donors, and civil society, have varied understandings of private sector engagements in development. They often lack a shared language on and understanding of the roles of the private sector in development. As such there are different views on what partnerships with the private sector entail. Based on a longer NSI report – Mapping Private Sector Engagements in Development – this policy brief provides an overview of key concepts relating to the role of the private sector in development. The brief seeks to provide greater clarity on key terms to help inform and improve policy debates and engagements amongst key stakeholders.

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