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Development Projects: Paths Through the Thicket

FROM: Daniel Nippard – 30. May 2020
© @kees_streefkerk

As jobless figures around the world are rocketing, are job creation projects supposed to sit and wait for better times? It might depend on whether you work on a ‘quick win’ or a ‘long-termist’ project.

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The world around us is seismically different today than it was at the turn of the year. Globally, the forecasting ‘heavyweights’ anticipate significant job losses and very suppressed hiring behaviors in all but a few industry sub-sectors. The unemployment bureaus here have seen significant increases in people listed in the last two months. Recently conducted employer surveys indicate the lists will lengthen yet further. 

I work at MarketMakers, a project of the Swiss Agency for Development Cooperation (SDC) implemented by Helvetas and Kolektiv, aimed at reducing the manifest youth unemployment in Bosnia & Herzegovina. With no vacancies and no companies hiring, I often get asked: ‘So, the project is not busy, right?’

Not quite. I will explain why.

Future orientation: managing the 'present bias'

We are a job creation project that seeks to create vacancies via a blend of long-termist growth-oriented changes in how systems serve employers and entrepreneurs. Right now, it is this long-termism, that is keeping us busy. In my opinion, it is always the right time to be working on future-oriented endeavors and the need for systems that themselves produce, uphold and improve growth-oriented services, policies, and regulations may soon be in even greater demand.

If we weren't mandated to focus on creating new vacancies, but instead only to fill existing vacancies – then we might be less busy now. If companies are not hiring now, then there are no new recruits to find and train now. Projects that are only oriented towards 'quick win' vacancy-filling activities with private sector partners are therefore likely to be somewhat stopped in their tracks. Not to bore readers but, in measurement terms, such an approach is typically associated with displacing investees' own resources and produces limited/no additionality. In other words, the same or a similar employment result would often materialize irrespective of the project's subsidies and involvement.

Our long-termist nature means that our level of activity from day-to-day remains the same because we are using our time to catalyze solutions that far outlive our project irrespective of current hiring behaviors. For example, we are doubling-down on investing into training systems (think: finding partner companies who wish to open training centers that offer repeated cycles of structured, applied skills-based education to unemployed youth year-on-year), rather than directly supporting employers (think: cost-sharing for the onboarding of a company's 2020 intake of new recruits).

In a slightly more unusual example, in the last two weeks, we have been finalizing an investment into creating a new Research Incubator for pro-youth economic reforms. A few years ago, our project was paying for policy research – legal analyses, employer and youth surveys, and econometric studies that we would refine into advocacy materials with which our partners and ourselves could lobby for pro-youth reforms. This was not very ‘systemic’ of us. We wanted to act quickly, and we took shortcuts that were short-termist and transactional, rather than transformational. We used our money to buy our way around constraints in research systems and policy-making circles that cause policy creation and legislative change here to be less evidence-based than it should be (or too reliant on copying and adjusting legislation/policies from neighbors), rather than using our money to address these constraints.

Now, we are investing our time to re-align ourselves with our long-termist vision of development. The Research Incubator intends to support postgraduate, Ph.D., and civil service researchers to produce original research at a fraction of the cost that we ourselves paid two years ago. It will also have the mandate to forge direct relationships with public actors (parliamentarians, ministries, standing committees), civil society, and the media to communicate policy-relevant research findings and bring them to policymakers' direct attention.

As another example from recent months, we are designing a new knowledge transfer service that encourages and equips senior management from the private sector to step into the world of non-formal company-delivered education and teacher training to be part of a solution for the talent that they will need to survive and prosper in the decades ahead. This might work, it might not. It is the risk we take. But, if present outcomes (i.e. vacancy creation) are going to be impacted and restricted by circumstances outside of the project's control, let's rather invest in generating future outcomes that are entirely consistent with our project's 'inclusive systems development' approach.

Logframe freedoms: in-built 'wiggle room'

Back in 2017, we purposefully set out to agree on having a degree of flexibility in our logframe indicators. The Swiss Embassy/SDC in Bosnia & Herzegovina was sympathetic and understanding of our reasoning. This was not to avoid commitments outright, but rather because the direction of a multi-year economic development project cannot be entirely pre-determined and effectively agreed in stone ex-ante. We needed to have some freedom of expression.

At the output-level, which emerges as the direct consequence of our activities and inputs, our primary indicators relate to service market, policy, and regulatory improvements introduced and the proportion of these improvements that sustain. The indicators apply to our employment stream (Outcome 1) and self-employment stream (Outcome 2). We are also multi-sectoral: generally, we are active in all services industry sub-sectors when it comes to creating new employment, and we are active in all industries when it comes to creating new self-employment.

We may be quite fortunate right now to have less tightly-worded logframe indicators. It is not uncommon for projects to have logframe indicators that specify the need for activities and inputs to be narrowly-focused in only one or a small handful of sub-sectors, or targeting a particular organization/institution, service, policy, or regulation. Although it is not always easy for our project to maintain such a broad portfolio of sectoral and non-sectoral interventions (and we receive friendly criticism on this topic regularly!), a lot of work goes into defining the strategic limits of our project so that we are able to strike the right balance between not-specializing and over-specializing. In times of crisis, our breadth is actually allowing us to consolidate our efforts around what is able to move, progress, and elicit growth and press the ‘pause button’ on what cannot.

To give a few illustrations of the adaptations we have been able to make thanks to our logframe pliability: i) we have put a greater focus on our IT and service export (business process outsourcing) activities, and internally shifted more human and financial resources towards investments that support the growth of e-commerce, customer services, and online 'gig economy' self-employment; ii) at the same time, we have frozen our work to develop the growth of business tourism (MICE) and niche medical tourism services, which were mostly relying on international business and health tourists, and have instead prioritized 'social-distancing-friendly' rural and outdoor tourism for domestic and regional holidaymakers. Here is an example of our intervention-specific adaptation to the COVID-19 pandemic.

In times of a crisis, over-specificity can be a big problem, as contractually-speaking, projects risk getting 'stuck' with having to create fixed outputs that current circumstances may not allow for. Conceptualizing indicators that offer a little freedom when circumstances shift and evolve can be time well-spent, and during a crisis, allow projects to find a 'new normal' in line with their contractual terms.

Year-round investments: little and often

Just before the COVID-19 crisis, we've observed several projects with pockets deeper than ourselves release large sums of money – usually concentrated in one industry sub-sector – via 'open calls' to anywhere up to 10 to 15 awardees. Some of these projects have been in specific tourism sub-sectors and some with a relatively short timeline for achieving outcomes – which COVID-19 has put in limbo. Of course, these projects were designed to deliver large grants through competitive open calls and COVID-19's emergence is beyond their control. But the international development practitioner community should ask itself if this kind of project delivery structure is able to perform in times of crisis.

As a dynamic social impact investment project, by design, we are permitted to select our beneficiaries via 'head-hunting' and our own internal processes for partner/investee shortlisting (i.e. operating somewhat like a classic investor). Whilst our project also uses 'open calls' from time-to-time, they tend to take a while to design and operationalize properly – information sessions and materials, expressing interest, selection, requesting proposals, evaluation and awarding, then contracting. On top of this, they do not always succeed in finding the most business-minded of partners (who, in our experience, are typically not looking out for development projects/donors) and can have questionable additionality as private companies 'play the system' to partially displace their own investment. Along with our relatively simple budget structure, our set-up allows us to co-create new investments with prospective partners and make investment decisions every month.

For example, during the COVID-19 times, we have been headhunting IT company partners that are interested in offering free online classes during the pandemic, and who will use the same curricula to offer paid-for online and offline courses when pandemic restrictions subside. We have also been using rapid mini-open calls designed to find up to three awardees with a four- to six-week turnaround from start-to-finish – i.e. from advertisement to contracting. Recently, we have used this method to quickly identify suppliers of Business Process Outsources (BPO) services, who are looking to make 'work-from-home' delivered customer management services part of their long-term expansion plans.

We were never set-up to be a challenge fund or a large grant-making project vehicle, and right now this is proving to be crucial to our buoyancy. We have been able to invest at a similar speed and volume as we were before the COVID-19 restrictions coming into force, and we have not had to fundamentally overhaul what we do and how we work. The architecture of our project and the investment approach it has been permitted to adopt has allowed us to find a reasonable equilibrium in very little time.

Closing words

Our current level of activity and our in-built flexibility does not mean that we will succeed in creating thousands of new jobs in post-pandemic Bosnia & Herzegovina. We will also be helpless to affect the inevitable consequences of employer demand, investment, and confidence. And, please don't get me wrong, there are plenty of things that I would change about our project set-up and the way that we work. Not all of what I write above applies to 100% of our project. We must also sometimes be ‘pragmatic hypocrites’ and push through a small number of short-termist and transactional expenditures.

But I can pleasingly also report that we are still able to progress our mandate at this challenging time, and this is in part due to how our project was conceptualized. The creation of jobs in the short-term is certainly a tall order, but the time and money we invest in improving the conditions for youth employment in the long-term is arguably far more important. This is the feedback our project is getting from local stakeholders here who know very well what it takes to really create a job in Bosnia & Herzegovina and are oftentimes frustrated with donors’ being too accommodating of ‘short-term target box-tickers’.

Thank you kindly for taking the time to read this blog post. I'd be pleased to hear from you, particularly if you have a different opinion.

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Daniel Nippard is directing the Market Systems Development (MSD) project, MarketMakers, on behalf of Helvetas in Bosnia & Herzegovina.