The private sector can have a transformational impact on peoples’ lives as a creator of jobs and producer of goods and services that poor people use. Donor agencies are paying increasing attention to how private sector development can be leveraged to support poverty reduction and sustainable, equitable and inclusive economic growth. Making use of social development thinking is essential to effective private sector development work that is responsible, inclusive, and delivers sustainable benefits to poor people.
This topic guide synthesises the most recent evidence on the social impacts of private sector development work, documenting emerging approaches and lessons learned. The private sector incorporates all economic activity that occurs outside of the state, ranging from smallholder farmers and informal entrepreneurs, to multinational corporations and the financial services sector. For the purposes of this guide, the focus is on organised firms and chains, such as agri-supply chains and large consumer base companies.