Regional Economic Development Study for MIF

Kick-off of thematic study on Regional Economic Development in Washington

The Multilateral Investment Funds (MIF) understands itself as a laboratory of innovations to promote micro and small firms and their productive environment in Latin America. It is part of the Inter-American Development Bank (IDB), an important entity providing financial services for development in the Region. Currently, the MIF is revisiting its track record in Regional Economic Development and asked for strategic advice.

A consortium of Mesopartner and the Argentine consultancy firm SISTME was contract by MIF to outline the thematic study. Both consultancy firms respond together to the interest of the MIF in receiving a structured analysis of its accumulated experience in RED and obtaining conceptual and practical advice on how to design future strategy for territorial interventions with a longer time frame.

The MIF is looking back over 18 years of accumulated experience in the field of Local and Regional Development. In its first wave of interventions, the MIF was following the trend in the international donor community towards supporting Business Development Services (BDS). The concept was to increase the productivity of SMEs and open new markets, but it rapidly became clear that BDS alone are not sufficient to enhance private sector development. BDS are still an element of the MIF’s toolset, but today the interventions go beyond simple technical and management skills to include the support of entrepreneurial capabilities like leadership, communication and experimentation with new business models.

The following second wave focused on “productive integration” through networks, clusters and supply chains. The inclusion of SMEs in these kinds of horizontal or vertical linkages was seen as an opportunity to benefit from economies of scale and external effects. In this approach, the role of buyers, and later opportunities for upgrading possibilities (and limitations) in Global Value Chains, was highlighted. Territorial agglomeration, especially in the context of industrial clusters, was seen as a competitive advantage.

In the current and third wave, the MIF places even more emphasis on the relevance of territory for development. Now the approach to PSD is much broader and more systemic, involving all stakeholders (including local government, universities, technology centres and civil society) that are relevant for economic development in a given territory. The private – public partnership is leveraged as a new potential for economic development. In the RED Study, Mesopartner and SISTME will ask if there is a new forth wave of RED interventions already emerging in response to current megatrends in development, which include new methodological approaches for project design, implementation, monitoring and evaluation. In consequence, we see the MIF’s future approach to RED as building on the cumulated experience, adapted to the challenges of complexity and articulated as a unique and distinctive approach to RED in Latin America and the Caribbean. The study started on the July 11th and 12th with a kick off meeting in the MIF-IDB headquarters in Washington. Over the following month the research team will elaborate in-depth studies in six countries (Argentina, Bolivia, Brazil, Guatemala, Mexico and Peru). The presentation of the final report is scheduled for the end of November 2013. For Mesopartner, SISTME and the local consultants involved it is a great opportunity to study the future trends and possibilities within the broad field of territorial development.

Ulrich Harmes-Liedtke