ILO’s Portfolio of Market Systems Development Operations for Decent Work

In recent years, interest in and application of the Market Systems Development (MSD) approach within the ILO have increased significantly, in large part fuelled by the ILO Lab and AIMS initiatives as well as increasing demand from donors such as Sida. This brief provides the first comprehensive account of the ILO’s application of the MSD approach in operational practice since it was first used by the ILO’s Enter-Growth project in Sri Lanka from 2005 to 2009.

More concretely, the brief shines a light on the magnitude and nature of the ILO’s MSD operations portfolio as well as the different patterns and trends characterizing the evolution of this portfolio. Among other findings, it highlights that, as of January 2021, the approach has been used in 42 ILO projects with a combined budget of approximately USD 170 million; that the ILO has also leveraged its recognized MSD expertise to support projects implemented by external organizations, in the UN system and beyond, in more than 25 instances; and that these different operations have served to advance various areas of decent work in a wide array of sectors in over 50 countries across the globe.

The brief nevertheless also underscores that, despite the breadth and diversity of the ILO’s MSD portfolio, several challenges to the institutionalization of the approach and its future growth in the organization remain. Most ILO MSD operations, for instance, remain focused on traditional MSD foci namely job creation and income generation, and disproportionately targeted at agriculture sectors. Moreover, many of these operations have not made use of the approach in its entirety but rather centred on its analytical appeal while arguably underutilizing its implementation principles and methods. All in all, there is still significant room to exploit the full potential of MSD to advance decent work objectives and take advantage of the increasing demand for using systemic approaches in the development community.