ACDI/VOCA’s Market Systems Diagnostic analyzes changes in market structures and enterprise behaviors to understand how and whether the market system as a whole is changing to become more inclusive, competitive and resilient.

Survey of a statistically representative sample of enterprises across diverse market functions, e.g., value-addition and wholesale/distribution that, in aggregate, allows for industry-wide observations

• Co-designed with market institutions (e.g., chambers, universities) to strengthen local capacity in complex adaptive systems thinking and learning and move towards sustainable collection and analysis

• Slow-and-fast-paced variables collected annually on competitiveness (e.g., sales growth, export diversification, customer retention, pricing power); inclusion (e.g., marginalized ownership, quality of work, diverse hiring); and resilience (e.g., occurrence of shocks, degree of recovery, supply chain redundancy)

• Variables further organized and analyzed around five attributes of more competitive, inclusive, and resilient systems – diversity, connectivity, power, competition and business norms – to support “best proxy” systems change insights

• Identify correlations and predictors to measure patterns of change toward broad-based, long-term growth and provide real-time information for adaptive decision-making by program/Activity and local partners

Three components: quantitative survey, regional industry feedback sessions to share results and build awareness, qualitative FGDs to tease out and deepen insights

Partners: ACDI/VOCA, Council of Private Enterprises of Honduras (COHEP), National Autonomous University of Honduras (UNAH), INCAE Business School, EcoVentures International

Method: Survey of representative sample of wholesalers and logistics operators, processors, exporters, hotel operators, and tourism service providers. Launched in February 2019. Round 2 in 2020.

Purpose: (1) Support system-level insights for industry needs; Launch COHEP-UNAH convention to establish think tank on private sector competitiveness. (2) Establishes systems level indicators as part of TMS’ multi-pronged approach to Activity MEL (which also includes performance, sentinel and context indicators, and methods for estimating indirect impacts).


Preliminary findings from Honduras TMS: Links to Resilience (pending validation)

88% of enterprises were affected by the shocks or stressors. 43% of enterprises reported able to recover from the shocks or stressors.

The most frequently experienced shocks and stressors (in order) were related to (1) political-related, (2) climate-related, (3) insecurity and (4) market price or demand. However, enterprises affected by shocks or stressors were least likely to recover from (1) extortion (2) insecurity (3) market price or demand (4) regulation-related.

• The reported degree of recovery from a shock is among three identified variables predictive of higher enterprise sales.

• Higher investment rates (in capex, staff, marketing, etc.), having diverse or redundant buyers and experiencing fewer shocks or stressors are predictive of the degree of recovery of the enterprise from a shock or stressor.

• There is a link between increased resilience, sales, permanent full-time jobs added and reported reduced external migration by enterprises – independent of the percentage of employees <30, a second determinant.

Access the Market Systems Diagnostic Case Study (July 2021) here.

The diagnostic includes indicators at the levels of enterprise behaviors and market structures to consider both fast-moving and slow-moving variables. Diversity attributes consider variety, distribution, and composition of elements within a system. Related to diversity is the concept of redundancy, or the need to maintain a diversity of elements that can perform the same function. Connectivity describes the frequency and degree of interactions and the exchange of resources by enterprises in a market system. Power relates to the concentration and exercise of influence over markets and the business-enabling environment by institutions, including lead firms within sectors. Cooperation variables measure cooperation between competing enterprises through information sharing, partnerships, and inter-firm trust and networks. Business norms relate to growth-oriented behaviors by enterprises to innovate and pursue value-addition business strategies.