The market development approach to business development services discussed in the previous chapter turned the existing small enterprise (SE) development paradigm on its head. Within the Mineworkers Development Agency (MDA), we railed against it. It was anathema to our world view and to our strategies. Yet despite the flaws described, the Business Development Services (BDS) market development approach posed important challenges to how development in the sector was understood and done and to the terms of the debate since. Despite our resistance and reservations, we learned sometimes unexpected lessons from the process.

Firstly, despite its narrow initial focus, in which the development of business service markets became the new all-encompassing purpose of development intervention in the sector, it did lay the basis for a far more concerted focus on the role of markets in development. Surprising as this may seem today, a context in which SE development had become a focus of poverty reduction strategies meant the dominant paradigm (in South Africa at least) was often devoid of market analysis. MDA was arguably ahead of the game in its level of focus on market dynamics at the time, in particular, on how the structure of the economy was impacting on the competitiveness of small entrepreneurs and limiting the scope for self-employment to act as a pathway out of poverty. Yet, in the sector as a whole, an understanding of market dynamics was often absent from the discourse. For example, livelihoods approaches then gaining traction in the social sector often lacked any analysis of how markets might be impacting on livelihood opportunities, with livelihoods seen as a category of economic activity operating in some kind of parallel universe largely unaffected by market structure or market forces. So, while we certainly argued about how markets were understood, there was no dispute about the need to do so.

Secondly, the BDS market development approach focused attention on the market effects of development intervention. Until then, the focus of impact assessment had been on the effects of intervention on those SEs that were the direct beneficiaries. Looking at the market effects of development agencies as market players meant stepping back a level and recognising how intervention might be changing a given market context.