Getting Started in Private Sector Engagement for Education

USAID’s first Private Sector Engagement (PSE) Policy is a call to action that outlines a new vision of collaboration with a wide spectrum of private sector actors. 

USAID recognizes global trends and the private sector’s fundamental role as a driver of economic and social development to support a country’s journey to self-reliance. The vision is clear: “Through this policy, we begin the process of institutionalizing private sector engagement as a core tenet of USAID’s operating model.”  

Business is Good for Development and Development is Good for Business
While USAID has engaged and partnered with the private sector for decades, the PSE Policy represents a change in how we do business and how we approach development challenges in a systemic approach. Aligned with the Education Policy and Financing Framework for Self-Reliance, the education sector has an opportunity to better connect with industry, businesses, financial intermediaries, corporate and private foundations, and organizations using market-based approaches.    

If you are unfamiliar with PSE in the education sector, you may be thinking about how to get started and what PSE means in your context. Keep in mind, it isn’t just about financial resources or formal partnerships. PSE is about understanding the interests, expertise, and dynamics of the private sector, and collaborating with them to find more successful approaches to sustainable impact in the education ecosystem.

Resources Available to You  
If you’d like to learn from others, there are more than 250 current and past examples of education partnerships in USAID’s public database of partnerships. In addition, USAID has just launched a public-facing list of Private Sector Points of Contact for all USAID staff. These USAID individuals can assist in designing strategies and identifying opportunities. They are also good resources for helping private sector entities understand the best ways to work with USAID.  

Asking the Right Questions
When engaging the private sector partners, an important place to begin is by understanding a company’s business, corporate social responsibility, and philanthropic goals and priorities.  What does USAID and the prospective partner bring to the table to address issues, potentially in a specific country or countries? How does the potential of their expertise or co-investment in education — in the country or region — leverage USAID’s resources and impact? Education — from early childhood up to higher education — is a foundation and driver for broader economic and social development. You may identify motivations that range from corporate social responsibility to business strategy and market development all the way to investment. Any of these reasons might hold the seed of a PSE collaboration.  

USAID and partners should ask and address these questions every time we approach a development or humanitarian issue: 

1. Can the private sector solve this problem by itself?
2. Could there be a market-based approach to addressing this challenge? 
3. What are the roles and interests of the private sector in addressing this challenge? 
4. Are there factors constraining the private sector from involvement and investment? 
5. Is there a role for USAID to help alleviate or eliminate these constraints? 

Supplement the five questions by thinking through additional lines of inquiry to further develop your ideas: 

• How might companies, private foundations, investors, and banks benefit directly if the education ecosystem is stronger and produced better results?  
• What kind of collaborations might meet private sector needs or interests?  
• What role might private sector organizations be willing to play in collaboration with USAID? 

PSE Spectrum of Engagement 
The “PSE Spectrum of Engagement” lays out the different types of relationships between the private sector and USAID, including the reasons why a private sector organization might be interested in collaborating. This spectrum ranges (from left to right) from collaborations where USAID is in the lead to private-sector-led initiatives where USAID is primarily a facilitator.  

To better understand these kinds of engagements, let’s look at some examples. 

Donor-Led
USAID seeks to leverage its foreign assistance contributions and encourage engagement from the private sector in activities, such as education in conflict and crisis — situations where the business community may not know how to be involved. Platforms like Education Cannot Wait (ECW), the first global fund dedicated to education in emergencies and other kinds of crises provides an option for the private sector and non-tradtional donors. ECW was designed to be responsive, take action quickly, remain flexible, and break down barriers in the most challenging environments. Companies that work with ECW pair business interests with societal needs, helping business and corporate social responsibility work together to support this critical issue.

Co-Creation
In this type of collaboration, USAID and the private sector co-create and co-design the response to a development challenge. In Kenya, USAID worked with Equity Bank to design the Wings to Fly partnership, focusing on scholarships for academically-gifted students who could not afford their school fees. USAID had an existing scholarship program in Kenya before the collaboration with Equity Bank began. Equity Bank was able to help jointly re-design the program to better meet the needs of students.  

Private Sector-Led
In private sector-led collaborations, USAID serves as a facilitator or risk mitigator to find solutions to market or corporate challenges, such as improving technical skills and developing a professional workforce. For example, the Higher Engineering Education Alliance Program (HEEAP) is modernizing the top engineering and technical vocational universities in Vietnam. In 2010, USAID was a founding partner of HEEAP, along with Intel Corporation, who needed more qualified engineers for its operations in Vietnam. Intel put its efforts into improving computer science instruction at the university level by designing innovative and effective curriculum. Eventually, other private sector companies joined the partnership because they saw the value in better-skilled engineering graduates. USAID remains involved, but HEEAP is now led by private sector partners.  

Still Have Questions? 
If you want to develop a private sector engagement plan or a specific partnership, build your team and please get in touch with the DDI/EDU Senior Advisor for Private Sector Engagement, Lisa Blonder, and your Mission or Center’s PSE point of contact. USAID’s PSE network and resources are here to help support your efforts.