From theory to practice: what we’re learning about MSD4E

If you work in market systems development, you may have noticed a new acronym popping up lately: MSD4E.

As previously explained, MSD4E simply means applying market systems development principles to employment programming. But what does this look like in practice? A new study offers insights from 53 MSD4E interventions that are putting these principles to work.

Moving from principles to practice

While we know that MSD4E requires some special considerations - like the need to analyse both labour markets and the economic sectors driving labour demand - until now there hasn’t been a clear picture of how projects are applying these principles on the ground. In response, the MSD4E Landscape Assessment, commissioned by Mercy Corps, Swisscontact and the ILO, is the first attempt to systematically map and profile MSD4E interventions around the world.

The study, which was developed in collaboration with donor organisations, implementers, and project teams, aims to showcase current practices, highlight successes and lessons learned, and provide a way for MSD4E practitioners to connect with each other.

Different objectives, different approaches

The study found that MSD4E interventions tend to cluster around three main objectives, each requiring distinct strategies:

Creating More Jobs 
Here, interventions either work sector-by-sector (for example developing the ICT sector in Albania or strengthening tourism destination promotion in Honduras) or target cross-cutting constraints to small business growth. The RisiAlbania project, for instance, strengthened information security services to help local firms access foreign markets, creating 169 new full-time roles. Meanwhile, in Liberia, PROSPECTS-IV built links between consumer goods suppliers and micro-distributors, creating opportunities for youth employment.

Improving access to work
Rather than just running training programmes, these interventions aim to change how skills development and job matching systems function. The Suddokho project in Bangladesh helped garment factories develop in-house training systems that were eventually adopted by 205 factories. In Kosovo, EYE spent a decade developing private job matching services that now reach over 390,000 jobseekers.

Enhancing job quality
Some interventions work to improve job quality through supporting regulatory changes (such as adding occupational health and safety to existing building site inspections in Rwanda), while others aim to demonstrate the business case for better working conditions. In South Africa, one project is helping mining companies improve working conditions in their supply chains through targeted BDS services to SME subcontractors.

Early signs of system change

The assessment found encouraging evidence that these market systems approaches can lead to sustainable changes in employment outcomes. Many interventions are showing signs of behaviour change and ownership from system actors -   critical indicators that changes might stick after project funding ends. Ex-post evaluations are still rare in MSD4E and more will be needed to understand what actually transpires post-project.

The assessment also highlighted some important challenges. Digital job matching platforms have struggled to reach the most marginalised jobseekers. Skills development interventions need better ways to ensure training actually leads to employment. And across all types of interventions, we need stronger evidence about pathways to scale.

Where do we go from here?

The study points to several priorities for advancing MSD4E practice:

1. We need more research on the mechanisms and costs of job creation -  particularly how MSD4E projects can support larger-scale job creation. The ILO SCI is currently producing a paper exploring this topic in greater depth.
2. Projects need to get better at defining and measuring job quality. The Rough Guide to Measuring Job Quality offers a good starting point.
3. Donors and implementers should align expectations about realistic pathways to scale and ambitions for project design. There is also a need to align interpretations of key concepts - for example how job creation is defined - to allow more like-for-like comparisons across the field and help ensure MSD4E initiatives are pulling in the same direction.

For those interested in diving deeper, all 53 intervention summaries are now available in the MSD4E Intervention Library, offering detailed insights into what different organisations are trying and learning.

The way forward

MSD4E represents more than just a new acronym - it’s an emerging body of practice that shows how market systems principles can be applied to employment challenges. While the development of MSD4E is still in its early stages, the growing evidence base captured in this study provides valuable insights for practitioners looking to create lasting change in labour markets.

The next frontier will be testing whether these approaches can evolve to help address the large-scale un- and underemployment and human capital challenges facing many countries. The experience captured in this study suggests we have some promising models to build on.

• Watch the BEAM Exchange webinar that took place in January 2025- MSD for employment: state of practice
• Join the MSD4E COP mailing list

This blog was originally posted on Mercy Corps Economic Opportunities' Medium site