Behind the Scenes at the Development Marketplace

What is the history of the Development Marketplace?

The Development Marketplace began as an internal program back in 1997, when there was a lot of talk within the World Bank of how to bring in new, fresh ideas and how to find them. As a result, a team within the Corporate Strategy Group was formed and tasked with searching for these new ideas. They came up with the concept of a marketplace of ideas: the Development Marketplace.

The first Development Marketplace was held in 1998, as an internal competition where Bank staff were encouraged to enter their ideas, and where the winners would receive funding to implement them. Some 150 Bank teams participated. An independent jury selected 11 teams who were awarded $5 million among themselves.

The competition was a huge success. The energy and excitement this first competition created validated the team’s thinking that an "innovation competition" was a good approach to finding new ideas and products. Some of the awarded projects from this first year were so successful that they have since become part of the Bank’s operations. Roll Back Malaria (find link) was among them.

When did the Marketplace go global?

After this first competition, the team decided to open the competition to anyone—inside or outside the Bank-- who was interested in addressing development issues using an innovative approach. The first global competition was held in 2000. The response was from outside organizations was overwhelming. More than 1000 proposals were submitted, of which 43 won, sharing the total award pool of about $5 million. About half of the winning projects were ideas submitted by civil society organizations.

Then, in 2001, based on some early feedback from country offices, the Development Marketplace team introduced a new product, the Country-Level Development Marketplace (CDM). That year, three country-level competitions were piloted in Thailand, Peru, and Ukraine.

This country-oriented approach again proved successful because was very effective in drawing out ideas and fostering partnerships that didn’t exist through regular Bank operations. It also gave country directors, who wanted to address specific issue, an easy opportunity to organize a marketplace competition around that issue, send out a call for proposals and pick out interesting projects to fund.

The following year, World Bank country office Burkina Faso, Brazil, Guatemala and Peru held CDMs. In 2003, the Development Marketplace team supported the largest number of CDMs, ever -- nine in all which included Burkina Faso, Brazil, Guatemala, Egypt, Peru, Vietnam, and several multi-country or sub-regional DMs --one for Belarus, Moldova and Ukraine; another one for the central Asian countries, and one for Ethiopia and Sudan.

It sounds like this country-based approach is popular with World Bank country directors?

The CDMs are getting a huge support from country directors. Actually, one of the issues we are facing is that every country director who has done a CDM, wants to do it again. Now, we are looking into how to successfully manage the demand and continue to be able to provide adequate support to all who are interested in holding one.

How are the Country Innovations Days financing themselves?

There is a formula. If a country is holding the event for the first time, then we, at the Development Marketplace team in headquarters, provide most of the award pool; as well as the technical support and event design. For a second time, we continue to provide the technical support but offer less financial support. However, what has been incredibly encouraging is that country offices seem to have no trouble getting funding from local partners and other sources towards the award pool.. Local USAID offices, UNDP offices, Soros Foundation offices, private corporations and other private national and international foundations have all supported CDMs.

What’s the future of the Development Marketplace?

The Country-level Development Marketplace a strong product and we will continue to fund it as long as there is a demand for it. As for the Global Marketplace, we have learned an interesting lesson from this last competition: There is clear demand for sector-based competitions. At the last competition, we had two sector-based award categories --one for HIV/AIDS and the other one for biodiversity. The DM proved an effective and successful way to find and fund innovative projects in those sectors. This sector-based approach is something we may explore for the future. The Global Competition is held every 18-24 months, so we have some time to sit down and take stock.

In addition to testing a sector-based approach, the last Global Competition had an unprecedented level of financial partnership from outside the World Bank Group -- from UNAIDS, Global Environment Facility, USAID, and others. We will look to capitalize on this success to continue to try to make this a true Marketplace of ideas, with many people looking to find good ideas in one place.

What has been the Marketplace’s impact on the overall Bank operations and lending?

I think the impact is taking place on two levels. From country directors we are finding that this is an easy and low-cost way to identify new projects, as well as to engage in work in countries, areas or sectors where the Bank is not present. In some cases, it is almost a precursor for Bank operations and engagement. CIDs allow the Bank to get to know new people. For example, in the case of the Ethiopia-Sudan CDM, although the Bank doesn’t have any operations in Sudan, the CDM provided us with an opportunity to familiarize ourselves with key actors in the Sudanese development context, enabled us to get a sense of what was happening on the ground, and began to engage with some non-governmental organizations (NGOs), which may be critical to service delivery in the future.

CDMs enable the Bank to foster new relationships because these competitions draw in groups of people that our country offices don’t necessarily work with on daily basis, such as the academia, or the private sector.

At another level, some DM-funded ideas have found their way into operations, which we view as a big success. For instance, a project funded in the 2002 DM, which set out to create a credit bureau for microfinance institutions in Benin, has been picked up by the World Bank as part of a Private Sector Development operation, to scale up the project idea.

So, another interesting aspect is if these funded projects work, you’ve essentially uncovered a new, potentially effective approach. The next step is to pull in this approach into traditional Bank lending or into the wider development community.

Have you been able to measure the rate of success?

Now that the program is maturing, we are just beginning to see results and draw the lessons to use in other regions and other Bank lending.

We recently did a quick evaluation of the projects funded by the 2000 Global and the 2001 Country-level Development Marketplaces. We’ve found that some 39 percent of the funded projects were highly successful and merited additional effort (and in fact gathered additional resources) for replicating. This is an amazing number for us. It may look low from a traditional "quality assurance" perspective, but from a venture capitalist point of view, and this is the approach we are trying to emulate, this is an impressive success rate: Venture capitalists typically have between 1 and 2 out of 10 projects that fare well.

Another one-third of the projects successful in what they did, but there hasn’t been much replicability because they were either addressing localized or the jury is still out because the project’s output was a knowledge-based product or a policy whose effects are too early to judge.

Is the type of project applications changing?

Frannie Leautier, our jury co-chair in Development Marketplace 2003 and a past juror, remarked that she thought that the projects submitted for this year’s Development Marketplace were on average better than in previous years. A lot of it depends on the theme chosen for the competition, which drives the content and quality of proposals. This year’s theme focused on implementation and results on the ground; we tried to discourage projects that had purely knowledge-based outcomes (conferences, policy workshops, etc.)

What’s next?

We hold a global competition every two years. The next one will be within the next 20-24 months. We haven’t decided on the theme yet. We would like to tie in the CDMs with the global competition.

Another possibility is to hold more regional marketplaces. Some country directors have been exploring this option. We’ve already done one for central Asia. This year we will hold one for southern Africa. More importantly, we are now focused on getting our new winners up and running, and figuring out how to get the word out about our successful projects into the Bank and the larger development community. In addition, we will look to build on and expand some of the new partnerships we formed this year with the Global Environment Facility (GEF), UNAIDS, USAID, Microsoft, and others.