QUESTION 3: Maximizing Development Impact via Support to Innovators, Entrepreneurs, and Researchers

The Lab provides substantial non-monetary assistance to the innovators, entrepreneurs, and researchers it funds. Staff at the Lab do so because their awardees are often not entrepreneurs or policymakers by training, but innovators and researchers with interesting ideas. These ideas and their potential for societal impact, however, have pushed the Lab’s awardees into these new roles. In this context, Lab staff have supported awardees to increase their likelihood of success and so that they might increase the societal impact of their work.

The provision of non-financial support provided by donors in the international development sphere — typically called technical assistance (TA) — goes back decades. The primary goal of TA has traditionally been to transfer knowledge and skills to an individual or group with whom the TA provider worked. If the TA provider was successful, they would no longer be needed (Williams, 1964). Yet, the use of TA by donor agencies has been controversial in practice (e.g., see Loomis 1968; Blase 1968; Godfrey et al, 2002; Brautigam and Knack, 2004; Easterly 2007). Critics of TA argue that it distorts local labor markets, undermines local ownership and capacity, biases donor assistance toward standardized training at the expense of on-the-job learning, and simply pays for programs local actors do not value enough to pay for themselves (Godfrey et al, 2002; Brautigam and Knack, 2004). Others view outside perspectives and neutrality as factors that enable dispute resolution within specific contexts, two factors associated with TA.

Moreover, recent research highlights that entrepreneurs in developing countries could in fact generate large impacts on employment, firm size, and other factors that lead to economic growth, simply by providing them with financing (McKenzie 2017). Nonetheless, the proportion of overall foreign aid spent on non-financial support in the form of TA has remained constant for decades (Easterly 2007). The non-financial assistance provided by the Lab, however, has important differences with the TA outlined in the international development literature. While much of the literature on TA describes mechanisms for “teaching up” recipients from a base level of knowledge to a higher level of expertise within their own field or subject-area, Lab support recognizes that each awardee brings their own knowledge, expertise, and unique ideas to the partnership - but may have gaps in other areas, such as business acumen or stakeholder engagement.

As a result, Lab staff have focused on providing support in areas in which their innovators and researchers have gaps. This could mean, for example, helping innovators strengthen the internal structure of their businesses, arranging oppor tunities for researchers to present their results to relevant policymakers, or working with innovators to do economic analysis prior to expansion into new markets. Drawing on Lab documents; semi-structured interviews with staff across the Lab Center for Development Research (CDR), Center for Development Innovation (CDI), and the Center for Transformational Par tnerships (CTP); and the international development literature on technical support, this section examines if non-financial support to awardees can be effective within the Lab’s unique context at USAID.  Download the full report for findings, conclusions and recommendations.