USAID’s Approach to Private Sector Engagement in Education
USAID and Private Sector Engagement
USAID invests in global education because we know that the positive effects of education are far-reaching and important for ending the need for foreign assistance (of the current top 15 U.S. trading partners, 11 are graduates of U.S. foreign assistance programs). Together, USAID and business can lower business risks in emerging markets, narrow the skills gap in the workforce and improve the investment environment while fostering sustainable development goals. In education, USAID collaborates with U.S. and global corporations, as well as regional and local businesses and industry associations to improve learning, expand opportunities for youth and strengthen education systems.
“Today, we have moved beyond grant-making, contracting, and instead we’re collaborating. USAID is reaching out to the private sector early on in the process for co-design of programs, co-financing of programs, risk-sharing, really tapping into some of the ideas that are out there that may be innovative and groundbreaking.”USAID Administrator Mark Green
USAID’s approach to engaging the private sector is highly collaborative to address development challenges. Partnerships range from corporate philanthropy and corporate social responsibility to shared value partnerships and investment alliances aligned with core business interests. In the education sector, there is opportunity for partnership to address issues of illiteracy, skill gaps in the workforce and improved learning through technology and systems capacity building.
Ways USAID Engages with the Private Sector
Partners to co-create and co-invest in solutions to a development challenge
Through Global Development Alliances (GDA) and other partnership mechanisms USAID partners to co-create and co-invest in solutions. These partnerships leverage USAID’s and partners’ respective assets and expertise, and are based on complementary objectives and aligned interests. To date, USAID has created more than 1,800 GDAs with the private sector. One such example is the Building University-Industry Learning and Development through Innovation and Technology (BUILD-IT) program in Vietnam, a program whose overall goal is to establish a sustainable, industry-government-academic alliance that will invest strategically and collaboratively to create a dynamic innovation ecosystem to engage science, technology, engineering and mathematics students, faculty, industry and government. Through collaborative dialogue, the BUILD-IT Alliance innovates in six areas: institutional policy, student learning platforms, innovation spaces, faculty instructional methods, experiential and applied curricula and gender inclusion.
Invests in research and development and innovation
USAID does this to identify, test or scale science and technology development solutions. All Children Reading: A Grand Challenge for Development is a powerful platform, created in partnership by USAID, World Vision and the Australian Government, to leverage science and technology to improve literacy skills of early grade learners in developing countries. Through a series of competitions, partners contribute financial, technical and human resource commitments to help scale proven literacy and technology-based approaches. In addition, through Development Innovation Ventures (DIV), USAID is supporting Pixatel to test and improve their tablet-based learning platform that provides children with dynamically tailored adaptive content suitable to their individual learning level—using daily practice and testing to master each topic before advancing to the next one. It runs on inexpensive tablets and does not require constant electricity or Internet or computer literacy among teachers.
Convenes multi-stakeholder alliances and coalitions
USAID aims to mobilizing resources and actions to solve critical challenges in education. The Global Book Alliance represents a way global and local stakeholders can come together to find better financing solutions and improve market efficiencies across the book supply chain to increase access to reading materials and reduce illiteracy in the most challenging of environments. The Mobiles for Education (mEducation) Alliance promotes and explores opportunities for mobile technologies—from e-readers and tablet computers to flash memory and micro/”pico” projectors—to improve education in formal and non-formal settings across all levels, especially in low-resource and developing country contexts.
Catalyzes financing for development
USAID does this through domestic resource mobilization and private and social impact investment. By strengthening a country’s tax system or via revenue management, resources available for improved education services—like public schools or training centers—can be both increased and better allocated. USAID also works with other donors and private capital investors to explore opportunities to support education through impact investments, risk sharing and other blended financing solutions. For example, USAID issued a Development Credit Authority (DCA) guarantee to a local bank in Ghana to support financing the construction and expansion of schools in the country.
Together, USAID and the private sector can reduce business risks in emerging markets, strengthen the workforce and improve the investment environment to support countries’ education systems on their road to self-reliance and economic prosperity.