Ep 23: USAID and Private Sector Engagement The Aid Market Podcast

Randy Tift, Former USAID Chief A&A Policy Officer, joins Mike Shanley as co-host, along with guest Michael Metzler, Executive Director of USAID’s Private Sector Engagement (PSE) Hub. As the first formalized private sector engagement office, USAID is the longest running donor in the space. USAID’s influence continues to evolve, especially as more U.S. foreign assistance professionals are shifting their focus towards the local development of communities and engaging in the private sector space. With this shift comes the need for new policies and strategies necessary to streamline future projects and to support complex relationships between USAID and private sectors. This impactful discussion focuses on USAID's Private Sector Engagement’s (PSE) priorities and progress, learning from PSE USAID projects, PSE and localization, and USAID and impact investing. 
IN THIS EPISODE:
[3:53] Michael Metzler gives a rundown of the history of USAID's Private Sector Engagement.
[7:00] What inspired USAID to shift their focus to the commercial interests of their private sector partners and how has this shift benefited USAID and their private partners? 
[12:44] Michael touches on why USAID is such a great resource for private sectors and local partners trying to establish themselves to tap into. 
[15:00] Randy introduces PSE Modernize, the overarching term for several initiatives that USAID has launched to track the agency's private sector partnerships, and to bring data to bear for USAID planners, both in the missions and in DC. This has brought more order to managing PSE partners, resulting in a real system for customer relationship management and knowledge management. Michael shares his thoughts on the launch.
[23:00] Michael discusses Compass, the Salesforce-based enterprise customer relationship management system that USAID is preparing to launch. He also touches on the staff that will be running and implementing Compass. 
[28:25] Randy asks Michael how USAID will engage with companies that work through supply chains, that cross borders, or work across sectors and industries? How will USAID incentivize the support for those complex relationships with their workforce?
[34:00] Discussion of the A&A Strategy and the Private Sector Engagement Policy, both launched in December of 2018. What has been accomplished and learned throughout the years since these launches?
[42:00] Michael touches on the Unlock Aid Organization. 
[45:43] How has USAID developed and updated their systems to better assist local partners and private sectors? 
[52:38] Randy inquires about the continuing role of nongovernmental organizations and nonprofits in private sector engagement and relationships with the Development Finance Corporation.
[58:30] Michael touches on the Edge Fund and why it was created.
KEY TAKEAWAYS: 
Many U.S. foreign assistance professionals disagreed on the importance of  engaging with multinational corporations, and even local firms, whose primary motive is mere profit. But there's really been a major shift in terms of the development community and engaging the private sector. 
USAID founded the first formalized private sector engagement office in 2000 with the intention to formalize an approach and its thinking around engaging with the private sector.
The Private Sector Engagement Policy and the A&A Strategy, both firsts of their kind, were both released in December of 2018. Michael reflects on that time period and what the resulting awards have accomplished.
When the Development Finance Corporation (DFC) was created, there was a significant hole in the agency in terms of its ability to transact. Thus, the Mission Transaction Unit was created to allow for the transaction that USAID brings into the DFC.
QUOTES:
“Focusing on the actual commercial interests of our private sector partners is not only a good thing to do, it's an absolutely necessary thing to do. In fact, we went fur