Current approaches to supporting rural employment are having a limited impact in terms of supporting large numbers of new or better income-generating activities, in particular when compared to the scale of rural unemployment. As a result, there is increasing interest in alternative approaches, including those that incorporate the principles of market systems development (MSD) into rural employment programs. This approach focuses on bringing about sustainable systems change to maximize impact. Though there is limited evidence to date, there are promising signs, and the approach has been successfully used in agricultural development programs to improve the incomes of thousands and hundreds of thousands of farmers. However, efforts to bring MSD principles into rural employment work have led to some confusion, in particular on the key differences between standard approaches and MSD approaches.
In response, this document clarifies what an MSD approach to rural employment looks like. It describes how MSD approaches differ from standard approaches, as well as the resulting implications for the implementers, funders, and advisors that support rural employment programs. Through this, it aims to help rural employment programs identify opportunities in which taking an MSD approach could maximize their impact on rural employment.