Nicolas Gloeck :
The international development landscape is changing. What does this mean for the industry in the years to come?
There’s no doubt that the global aid architecture is changing. There has been much talk about the rise of emerging donors, from the economic powerhouses in the “global south” collectively known as BRICS to the oil-rich Arab nations.
Indeed, while the rise in official development assistance in 2013 was largely buoyed by Western donors – many of which continue to wrestle with an improving but still weak economy – aid flows from emerging actors have certainly contributed to the upswing in aid spending.
The United Arab Emirates, for one, inched past traditional donors like Canada and Australia and became the ninth-largest provider of net ODA that year. More significantly, UAE not only posted the largest growth in aid spending in 2013 – up 375 percent to $5.1 billion – it also became the first emerging donor to meet – and exceed – the elusive goal of allocating at least 0.7 percent of gross national income to ODA.
And this trend, according to a recent Devex survey of top-level executives in development, is likely to continue through the next 10 years.
Earlier this year, we asked key influencers and development executives to share their views on the future of global development. We had nearly 1,000 responses from senior managers across six continents working in sectors from government and donor agencies to social enterprises and the private sector to nongovernmental organizations.
The overwhelming majority of top-level executives who responded to our survey believe the global aid architecture will transform substantially over the next decade, led mainly by the rise of emerging bilateral donors. These actors, however, aren’t the only ones that will contribute to a fundamental change in the industry. Private sector giving has been growing in recent years and is expected to rise further in the years ahead.
And it’s not just development giving from the corporate sector.
Our survey findings indicate senior executives expect impact investing to grow an average 8.9 percent over the next decade. Presently, some $46 billion in global impact investments are under management, according to a recent report from the G8 Social Impact Investment Task Force.
J.P. Morgan and the Rockefeller Foundation have also projected that the sector could reach $1 trillion by 2020. Nearly 1,300 asset managers that handle more than $45 trillion in combined capital have signed up to the U.N. Principles for Responsible Investment, which commits them to consider environmental, social and governance factors before investing in a venture.
It’s unclear how much of that money has been and will be channeled to development, but the vast resources available have contributed to the growing number of social enterprises that are espousing innovative and market-based solutions to address development problems and to challenge conventional norms around serving populations at the bottom of the pyramid.
Then there’s the role of innovation, a timely buzzword that’s by no means unique to international development. While there are new approaches that fail to take off, those that have succeeded have given us open databases, geomapping applications and mobile phone-based services that revolutionized how development agencies target beneficiaries and deliver aid.
And perhaps for these reasons, top-level executives – especially those working at social enterprises and NGOs – said they’re more willing to donate their own money to an untested startup with innovative ideas than to an established organization with a proven track record.
With the vast amount of information top-level executives have given us through this survey, we are launching a series that investigates what these senior managers think about the future of global development. Exclusive to our Executive Members, each article will focus on a unique, sometimes contentious, issue that’s likely to have an impact on the changing development landscape.
We also sought comments from key executives in development who provided interesting insights supporting – and sometimes challenging – what we found in our research. One thing is clear: Whether in the survey or through our interviews, the majority of senior executives believe the global development’s future will reflect some considerable shifts.
(As Manager of Surveys and Advisory Services at Devex, Nicolas leads an experienced team of researchers on a variety of custom research projects and surveys. )
