Within the European Commission, the Directorate-General for International Cooperation and Development (DEVCO) is in charge of development policy in a wider framework of international cooperation, adapting to the evolving needs of partner countries.
Over the last decade, European Commission support for private sector development has averaged EUR 350 million per year and the current Multiannual Financial Framework for 2014-2020 contains approximately EUR 2 billion for private sector development. This, combined with development assistance from Member States, makes the EU a key player in supporting local private sector development in partner countries.
The key policy document is the Commission Communication - A Stronger Role of the Private Sector in Achieving Inclusive and Sustainable Growth in Developing Countries. The Communication highlights 12 concrete actions where the Commission believes it can add value and effectively complement actions by Member States and development partners on private sector cooperation. The actions target better regulatory environments in partner countries, business development and access to finance, especially for job-creating micro, small and medium-sized businesses. Another recent Commission Communication is the Achieving Prosperity through Trade and Investment updating the 2007 Joint EU Strategy on Aid for Trade. The Communication highlights the importance of trade as an instrument to poverty reduction and jobs creation through trade and investment. It puts a strong focus on inclusiveness by targeting the least developed countries, and countries in situations of fragility.
One of the Commission’s recent key private sector priorities is the External Investment Plan (EIP), which sets out a coherent and integrated framework to improve investment in Africa and the European neighbourhood in order to promote decent job creation as well as, inclusive and sustainable development. This is done through the three pillars, providing a guarantee, technical assistance and promoting a conducive investment climate. One of the EIP windows are focused on Micro, small and medium enterprises, including inclusive aspects such as targeting women entrepreneurs, as well as having a focus on fragile states.
One of the main aims of Finnish development cooperation is to improve job creation, livelihoods, and economic development in the global south. To achieve this goal, Finland seeks to 1) increase access to decent work, livelihoods and income; 2) help the private sector in developing countries become more dynamic and diversified; 3) promote international business rules; and 4) use knowhow, value chains, technologies, and innovations for sustainable development. The largest Finnish programme in this area is BEAM, which supports Finnish private sector enterprises in generating new and innovative business models that address challenges in the global south. Find out more about Finland's motivation, institutional coordination mechanisms, priorities and challenges in terms of supporting inclusive business here.
Private sector promotion plays a large role in German development cooperation. To increase their impact, measures are linked to complementary programmes in the fields of economic policy, financial systems development, (vocational) education, infrastructure, and good governance. The largest programme focussed on private sector promotion is develoPPP.de, a challenge fund that also offers technical assistance. Find out more about Germany’s motivation, institutional coordination mechanisms, priorities and challenges in terms of supporting inclusive business here.
Italy endorses a systemic approach to development cooperation and to co-development initiatives, based on the local ownership of partners and the involvement of the private sector. The first public call to the private sector was launched by the Italian Agency for Development Cooperation (AICS), in July 2017. The call is focused on innovation, inclusive business, profit-no-profit partnership, sustainability. Innovative Ideas for Development is a challenge fund that promotes innovation in business to contribute to development. Find out more about Italy’s motivation, institutional coordination mechanisms, priorities and challenges in terms of supporting inclusive business here.
Luxembourg’s development cooperation has maintained a twenty-year commitment to actively support the development of inclusive finance, recognizing that these tools constitute important mechanisms for poverty reduction. A new tool used by Luxembourg’s development cooperation to contribute to sustainable development and inclsuive growth in developing countries, is the Business Partnership Facility (BPF), a financing facility that aims to encourage the Luxembourgish and European private sector to work with partners in developing countries in order to establish sustainable commercial projects. Find out more about Luxembourg's motivation, institutional coordination mechanisms, priorities and challenges in terms of supporting inclusive business here.
Spanish private sector promotion focusses on communication and knowledge exchange, trainings, and joint initiatives and alliances. Spain actively involves private sector stakeholders and seeks to make this sector a partner in achieving its development objectives. One of the programmes in this area is ICEX IMPACT+, which supports Spanish firms in diversifying their target markets to serve low-income populations in emerging markets in a commercially viable way. Find out more about Spain’s motivation, institutional coordination mechanisms, priorities and challenges in terms of supporting inclusive business here.
Sweden supports inclusive business initiatives bilaterally, regionally, and globally. Sweden’s Business for Development (B4D) programme consists of different instruments to engage private sector actors, including challenge funds and public private development partnerships. The main objective of Sweden’s sustainable economic development cooperation is to improve low-income people’s opportunities to contribute to and benefit from economic growth. Find out more about Sweden’s motivation, institutional coordination mechanisms, priorities and challenges in terms of supporting inclusive business here.
The Netherlands promotes economic development in target countries through Public-Private Partnerships (PPPs). The Ministry of Foreign Affairs has PPP funds in the areas: water, food security, sexual and reproductive health and rights, sports, and energy. The Netherlands also contributes to a positive business climate in its partner countries. The largest Dutch programme in this area is 2SCALE, which builds capacities among smallholder farmers and in SMEs to accelerate value chain and private sector development, through innovation and coordinated action. Find out more about the Netherland’s motivation, institutional coordination mechanisms, priorities and challenges in terms of supporting inclusive business here.
The UK’s Economic Development Strategy focuses on trade and investment as engines for poverty reduction, aiming to increase job growth, to integrate developing countries into global value chains, and for developing countries to become partners in international trade. The UK seeks to achieve this by stimulating foreign direct investments (FDI), contributing to an enabling environment for business, and by prioritising high relevance sectors such as transport, water and communications infrastructure. The largest UK programme in this area is the DFID Impact Programme, which aims to catalyse the impact investing market to improve the lives of people at the base of the economic pyramid (BoP). Find out more about the UK’s motivation, institutional coordination mechanisms, priorities and challenges in terms of supporting inclusive business here.