What’s the difference between MSD and MSD4E?
Written by Rachel Shah, Director of Youth Employment
As with all international non-governmental organisations working in aid and development, Mercy Corps team members use acronyms as a second language, often forgetting how confusing this can be to people unfamiliar with the letters. To make matters worse, every now and then a new acronym gets adopted — as happened recently when we all started talking about MSD4E — Market Systems Development For Employment. So what is MSD4E, and how is it different from the more familiar acronym “MSD.”
MSD stands for Market Systems Development, which is an approach to development, built on a set of common sense principles. Applying an MSD approach means analysing how and why the market systems that affect marginalised people are not working well for them, and then intervening through partnerships with existing market actors to change the way those systems work, for good.
In practice, MSD programmes are characterised by a commitment to achieving impact that lasts beyond the programme’s closure. In MSD, this is done by addressing the underlying reasons for systemic failure and exclusion, through short-term partnerships with existing market players, including public, private and civil society actors. Partnerships start by piloting new ways of doing things that could work in the long-term, without any donor funding. Successful pilots are scaled-up and gradually change the way the system works, with the ultimate goal of supporting systems to become more inclusive, competitive and resilient. As there is no blueprint to create systemic change, MSD programme teams learn along the way, embracing adaptive management.
MSD can be applied to work in nearly any sector — so we could probably come up with hundreds of acronyms if we wanted to:
- MSD for agriculture (MSD4Ag) is about analysing why agricultural systems are not working well for poor and vulnerable farmers, and then partnering with relevant market actors to change the way those systems work, for good.
- MSD for water (MSD4W) is about analysing why water systems are not working for people with poor access to safe water, and then partnering with relevant market actors to change the way those systems work, for good.
And (drumroll please)…
- MSD for employment (MSD4E) is about analysing why existing labour market systems are not working well for some workers and jobseekers, and then partnering with relevant market actors to change the way those systems work, for good.
So what is MSD4E? It is simply the MSD approach, applied to employment programming. When we use MSD to improve working conditions, improve access to work, or create more work (whether waged, or self-employment), we call it MSD4E.
So if it is as simple as that, why do we need yet another acronym? Why don’t we just call it MSD?
Well, firstly, you can just call it MSD if you want to. But if you’re curious, there are two reasons we call it MSD4E — one for the community of practitioners familiar with MSD, and one for those who work in employment but aren’t yet familiar with MSD.
Until recently, the MSD approach has not frequently been used to improve the way labour market systems work — and it has been used a lot to improve agriculture (and some other) systems. Unfortunately, this means that a lot of people assume MSD is effective in some sectors, like agriculture, but that it does not work well for employment programming.
What some MSD practitioners working outside employment may not realise, is that you cannot use the same shortcuts to apply MSD to employment that have been used for the past 2–3 decades in more familiar sectors. For example, a common dictate in MSD is: “diagnose down, measure up…” In MSD, you usually select a sector in which there is high and/or growing demand for the goods and services in question,¹ as this is where opportunities for change lie. Having done that, you have to diagnose “down” into that sector to understand why the opportunity is not being capitalised on in a way that benefits marginalised people, and identify system changes that might enable greater inclusivity.
In MSD4E, though, you start with the labour market in a given sector and you do not always have the luxury of selecting a labour market where there is already strong and growing demand for labour. There simply may not be any sectors with sufficiently strong demand for labour that are relevant to the target demographic the programme is working with. Indeed, in many of the contexts where we work, with a rapidly growing youth population, there simply isn’t enough work to go around. So, in MSD4E analysis, you have to diagnose “down” to the constraints in the labour market that might prevent marginalised people from accessing work opportunities, or that might drive poor working conditions. You also have to diagnose “up” to the economic sectors from which demand for labour is derived, to identify opportunities for labour-intensive economic growth. In other words, in MSD4E it’s critical to deeply understand the economic system(s) demanding labour — and its constraints, as well as the labour market — and its constraints. And when it comes to monitoring and measurement, you have to keep your eye on both the labour market system — where benefits hopefully accrue to marginalised workers and/or jobseekers — and on the economic system demanding labour — where opportunity for growth and change lies.
Another nuance lies in the nature of what is transacted in the core of the labour market system. Labour is intrinsically linked to the person who supplies it — it cannot be entirely separated from their skills, experience, natural tendencies, preferences, abilities and disabilities, experiences of prejudice, ambitions and more. This has direct consequences on numerous aspects of programming, from the need for in-depth and nuanced identification of workers and jobseekers and their respective needs (not all people can, or want to, do all kinds of work), to the need for varied definitions of success (workers define work “quality” and “improvement” in varied ways).
To be clear, MSD4E remains true to MSD principles — it does not change the principles at all. But there are some important characteristics of labour markets that practitioners applying MSD to employment programming need to take into account. As these nuances are often not familiar to those who have spent the last two decades using the MSD approach in other sectors, it has proven helpful to use “MSD4E” to highlight these nuances.
The second reason for labelling MSD4E is for those who work in employment but aren’t yet familiar with MSD. When we use or advocate for this approach we are often talking to people who work in labour markets, and are focused on employment programming, but who are unfamiliar with the MSD approach. It helps to have the word “employment” in the acronym for those conversations.
To sum up: MSD can be applied to many different sectors. When it is applied to employment, we call it MSD4E. All MSD4E is MSD but not all MSD is MSD4E.
Wherever we work, donor-funded implementing agencies are (and should be) temporary players — but we aim to catalyse changes that last long after we’re gone — changes that enable the most marginalised to more fully participate in market systems as customers, entrepreneurs and employees. MSD is simply a way of doing that — whether we are working in agriculture, water, sanitation, education, media or labour markets.
[1] In some cases this may be latent demand, but a general principle of sector selection in MSD is not to select a sector in which supply already or increasingly outstrips potential demand.
For more information about Youth Employment at Mercy Corps, contact us at youthemployment@mercycorps.org.
