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Date: 2019-03-22 Page is: DBtxt001.php txt2002010100
TVM Sector Perspective
How Sector Activities Impact People, Place, Planet and Profit

Chapter 1 - Sector Perspective
1-1 About Sectors

The sector perspective should not be ignored ... but it is rare that the performancer of a single sector will be enough to improve the performance of society and the economy as a whole. In most cases performance in one area of the economy will be constrained by something in another part of the economy ... and an optimized performance will only be achieved by working with ALL the sectors of the society and economy



Hundreds of sectors and sub-sectors

There are hundreds of sectors and sub-sectors. Most organizations are organized along sector lines with as singular focus on a single sector where they build up great expertise and competitive advantage. This is good for the organization and has been welcomed by investors and financial analysts looking out for investor interests ... but it may or may not be the best way to organize for optimum socio-economic progress and sustainable development.

Most of the organizations most engaged with international relief and development are organized along sector lines. This is particularly visible with the United Nations family of organizations which is made up of the central Secretariat and a large number of specialized agencies and offices including the following:

  • Food and Agriculture Organization (FAO) ... agriculture
  • World Food Programme (WFP) ... food
  • United Nations Educations, Science and Culture Organization (UNESCO) ... education, science, culture
  • International Labor Office (ILO) ... labor
  • World Trade Organization (WTO) ... trade
  • United Nations Industrial Development Organization (UNIDO) ... industry
  • United Nations High Commission for Refugees (UNHCR) ... refugee
  • UN Office for the Coordination of Humanitarian Affairs (OCHA) ... humanitarian affairs
  • UN Office of the High Commissioner for Human Rights (OHCHR) ... human rights
  • World Health Organizations (WHO) ... health
  • United Nations Childrens Fund (UNICEF) ... children (health)
An organization like the World Bank has a focus 'by country' but within the country there is again a deep sector specialization, and ther projects that have been funded by the World Bank are mainly single sector projects.

Most governments have ministries that are responsible for individual sectors:

  • Ministry of Defense,
  • Ministry of Agriculture,
  • Department of Fisheries,
  • Ministry of Education,
  • Ministry of Health,
  • Ministry of Trade,
  • Ministry of Public Works,
  • Ministry of Home Affairs (Police, Prisons, etc)
  • Ministry of Transport, etc.

An overview listing of main sectors

This is not a complete list of sectors and sub-sectors, but it is enough to give an idea of how many sectors are involved in making society work in a reasonable manner. The relief and development sector will succeed when all the sectors are able to function appropriately in any place in the world. The following list is in alphabetical order.

Academic sector
Potentially a source of a lot of knowledge, but much of the work is academic without being valuable.

Agriculture sector.
Not widely acknowledged any more, but a key driver of prosperity in the “north” and very efficient. In the “south” in contrast, too much of agriculture remains little better than subsistence.

Banking and finance sector.
Hugely profitable, but services essential to the “south” are not available because the profits not big enough.

Construction sector.
Local construction companies ought to be a driver of local economic performance, but they are often displaced by foreign contractors. Quality needs to be professionally controlled.

Education sector.
The education sector is critical to the future performance of the economy, but badly underfunded and good education is far from being accessible to all.

Employment or jobs.
Create employment and jobs, and a lot of relief and development problems go away. This ought to be a major priority.

Energy sector.
The supply of energy to the “south” is poor and a constraint, while raw energy sources in the “south” are tremendously rich and exploited almost totally for foreign benefit and some small local elite.

Enterprise sector.
A simple way to describe the private for profit organizations that can be the driver of sustainable socio-economic progress.

Fisheries sector.
A potentially valuable sector in the “south”, but often the bulk of the value is exported by commercial fisheries agreements that are bad for the “south”

Governance and administration sector.
This ought to be facilitating socio-economic progress, but too much is constraining progress. Not enough accounting and accountability.

Health sector.
The health sector is critical to the health of the population, and seriously underfunded in the face of some pandemic health issues.

Housing sector.
Housing is a sector that can be a useful driver of economic progress. There is a big need for affordable housing, especially in urban areas.

Infrastructure sector.
Getting infrastructure upgraded can be a driver of the economy, but only if it is done with some understanding of the dynamics of development and the damage caused by economic distortion.

International trade sector.
There needs to be a lot more of fair (equitable) trade than merely free trade.

Legal and justice sector.
Too often underfunded and unable to function well. Not well integrated with traditional systems of justice.

Luxury sector.
This sector has a high profit derived from the huge disposable income of people with great wealth. Mainly involved with obscenely expensive baubles and toys.

Manufacturing sector.
The sector can be a valuable part of the economic mix. It is not going to be success except in places that commit to an efficient economic environment.

Military and security sector.
More sunlight is needed in connection with military equipment and supplies and how they are used.

Mining sector.
A sector that ought to produce huge value for the “south”, but it needs work to allow it to achieve value for the “south”

Natural resources sector.
Natural resources of all sorts are abundant in the “south” but not exploited much for the benefit of the “south” but mainly for the benefit of foreign investors and their foreign staff.

Productive sector.
These sectors include mining, manufacturing, agriculture, fisheries, etc. that make things needed for society locally or internationally.

Professional sector.
The professional sector is not central to relief and development efforts, yet it is one of the key ways that an economy becomes self-sufficient.

Public sector, private sector.
If it is government it is the public sector, if it is not, it is the private sector.

Relief and development sector.
A shorthand to cover all the activities of the official relief and development organizations, governments, NGOs, etc. that work on disaster relief and socio-economic progress.

Retail sector.
Look at the retail sector and a lot can be learned about the state of socio-economic progress.

Social sectors.
These sectors include health, education, etc. that are needed to improve the status of the population.

Telecom sector.
The telecom sector has evolved a lot in the recent years, and change continues. Getting relief and development friendly telecom is critical to success.

Tourism sector.
Tourism has great potential for the “south” but it needs management and development of destinations.

Transport sector.
Transport is part of the infrastructure that is in great disrepair in the “south” and costly to the society.

Wholesale and distribution sector.
Wholesale and distribution is highly efficient in the “north” and a tremendous constrain in the “south”.


Sector expertise ... specialization

Sector expertise is very important. Each sector uses a range of technologies that require considerable knowledge, training and experience to use well. All products and services should be accessible everywhere they are needed. Similarly, expertise in any sector should be accessible where and when it is needed.

Each sector has its own technologies and best practices. But in the developing “south” the success of one sector is often constrained by the limits of some other sector. This argues, therefore, for a relief and development approach that ensure that there is a multi-sector involvement. There is little consensus about what is the best approach to making relief and development more effective and getting more rapid progress.

A sector is not tied to any location, though what is best in a sector can change from place to place. My experience has been that single sector intervention in almost any community is likely to fail, simply because critical constraints are being addressed. One sector can improve, but all the other constraints remain in place. Nothing is optimum until all the constraints have been addressed.

Multi-sector mix

A community needs a multi-sector mix. This mix of sectors is important. People have said over and over again that they will not work in remote rural areas because something they need is not available. It can be health services, or schooling or the social situation ... but it emphasizes starkly the importance of the totality of sector and function in order to have success.

Linkages between sectors

Development succeeds when all the key linkages are in place. It is possible to understand the failure of development through an understanding of inter-sector linkages. This program has been designed to take advantage of the potential of the economy with the appropriate linkages in place. There are therefore initiatives in a variety of sectors, short term, medium term and long term, and through a variety of implementing mechanisms.

When I was first engaged to work in relief and development planning I worked with “projects” and I worked with “sectors”. With relief and development results so bad, it is clear that not just one but many things needs to be fixed, that a single sector approach to project design is insufficient. Even if a single sector project is well designed, a project needs performance in many other sectors in order to be successful.

Multi-Sector Linkage

My own experience operating in the “south” showed me very tangibly how much inter-sectoral dependence there is.

In the “north”, when something goes wrong, the solution is easy. Use the telephone to call up a supplier, pay money and almost instantly get the goods or services. Someone operating fishing trawlers in the USA could get all the maintenance needed simply by telephoning. Spare parts are easy to get, and do not have to be sourced from half way round the world.

I did not realize how much this is taken for granted until I became involved with running fishing trawlers based around the world in the “south” ... in Africa, the Middle East and Latin America ... and frequently a long way from the big cities. We needed to be able to do everything for ourselves. We had water wells for water, electric generators for electricity, maintenance technicians and spare parts for everything electronic or mechanical, and took care of absolutely everything ourselves. When a trawler needed maintenance, we did it all ourselves. While our main operations were the fisheries sector, keeping ourselves operating required support from every other sector.
The following table gives some idea of all the sector initiatives and linkages that are needed for effective socio-economic development progress whether in the government or the private sector. Society and economy are intertwined. Government and private sectors are also intertwined. Get all the connections working, and development will not be constrained, but when only one thing does not work right, it has a damaging effect on all the other elements of the society and economy.

Multiple Inter-Sector Linkages

Know-how ---> v
Financial resources ---> v|
Equipment ---> v||
Materials and supplies ---> v|||
Employment ---> v||| |
Organization ---> v||| ||
Training ---> v||| |||
Systems and Processes ---> v||| ||||
vvvv vvvv
GOVERNMENT AND SOCIAL SECTORS
Administrative capacity xxxx xxxx
Education and Training xxxx xxxx
Health xxxx xxxx
Security, police, judiciary, prisons xxxx xxxx
Food security xx
Economic security xx
Government revenue, public finance xx
Trade and investment environment xxx xx

INFRASTRUCTURE
Water xxxx xxxx
Roads xxxx xxxx
Cargo and fishing ports xxxx xxxx
Airports xxxx xxxx
Housing xxxx xxxx
De-Mining xxxx xxxx
Energy xxxx xxxx
Environment xxxx xxxx
Communications xxxx xxxx
Banking and financial services xxxx xxxx
Knowledge dimension of development xxxx xxxx

INCOME GENERATION AND EMPLOYMENT
Private professional sector xxxx xxxx
Livestock and range management xxxx xxxx
Crops and other agriculture xxxx xxxx
Fisheries xxxx xxxx
Construction xxxx xxxx
Maintenance workshops xxxx xxxx
Agro-Industry and Manufacturing xxxx xxxx
Minerals and Mining xxxx xxxx
Transport xxxx xxxx
Wholesale trade xxxx xxxx
Services, retail and petty trade xxxx xxxx
Hotels and restaurants xxxx xxxx
Tourism xxxx xxxx

The previous tables show how many sectors and linkages there are. Because of complexity in the linkages it is difficult to optimize with formal “planning”. The process is simply too complex, and the variables too many. The invisible hand of the market mechanism will make order out of this apparent chaos and complexity. Every community in the area knows what it needs to better the community. This knowledge will drive the process if it is allowed to. The program has embraced the concept of “participation” because participation allows families and communities to decide themselves how resources can best be used.


Dozens of sectors and sub-sectors

There are dozens of sectors and sub-sectors. This is just a small part of a comprehensive review of sectors, but needed because sector thinking has become commonplace in the relief and development sector, and a lot of organizations are organized along sector lines and have a single sector focus.

Most governments have ministries that are responsible for sectors: Ministry of Education, Ministry of Health, Ministry of Transport, etc.

The United Nations has established a range of organizations to focus on different sectors: FAO for agriculture and fisheries, WHO for health and UNICEF that has a focus on children's health, UNIDO for the industrial sector and UNESCO for education, science and culture. There are hundreds of UN agencies and offices with focus on specific parts of the global economy and society.

Each sector has its own technologies and best practices. But in the developing “south” the success of one sector is often constrained by the limits of some other sector. This argues, therefore, for a relief and development approach that ensure that there is a multi-sector involvement. There is little consensus about what is the best approach to making relief and development more effective and getting more rapid progress.

Various Types of Sector

There are a series of commonly used ways of looking at sectors. They are useful ways to simplify the dialog.

Hundreds of Sectors and Sub-Sectors

This is perhaps not a complete list of sectors, but it is enough to give an idea of how many sectors are involved in making society work in a reasonable manner. The relief and development sector will succeed when all the sectors are able to function appropriately in any place in the world.

A more comprehensive view of sectors is being developed for publication in a companion book that will probably be titled: “A Sector Perspective on Relief and Development”. The following list is in alphabetical order.

Characteristics of sector

A comprehensive mix of sectors in any community is important. I have been told over and over again that people will not come to remote rural areas because something they need is not available. It can be health services, or schooling or the social situation ... but it emphasizes again the importance of the totality of sector and function in order to have success.

The previous tables show how many sectors and linkages there are. Because of complexity in the linkages it is difficult to optimize with formal “planning”. The process is simply too complex, and the variables too many. The invisible hand of the market mechanism will make order out of this apparent chaos and complexity. Every community in the area knows what it needs to better the community. This knowledge will drive the process if it is allowed to. The program has embraced the concept of “participation” because participation allows families and communities to decide themselves how resources can best be used.

A sector is not tied to any location, though what is best in a sector can change from place to place. My experience has been that single sector intervention in almost any community is likely to fail, simply because critical constraints are being addressed. One sector can improve, but all the other constraints remain in place. Nothing is optimum until all the constraints have been addressed.

Sector expertise

Sector expertise is very important, and the products and services associated with all the sectors should be accessible everywhere they are needed. In the poor “south” only a limited amount of sector expertise is available, and a lot of things that ought to be easy to fix never get done.

The relief and development community has responded to this in some measure. Instead of agriculture projects, the World Bank morphed into rural development projects, which was a reasonable response to the problem within the construct embraced by the World Bank.

From a community perspective there needs to be the sector expertise that is needed to improve the community. There are many sectors that might be needed ... very much depending on the nature of the community and what the community wants to make as a priority. Table – Sector Types Sector Type Note Employment sector The part of the economy that generates jobs ... part public ... part private

Enterprise sector
A shorthand for the part of the economy where people are entrepreneurial and benefit from the fruits of their efforts.

Formal and informal sectors
The formal sector is the part of the economy that is organized, registered or incorporated. There are identifiable entities, jobs and taxes. Everything else is the informal sector.

Governance - government
The part of the economy that is engaged in making laws, rules and regulations and seeing to it that they are followed.

Infrastructure sectors
The infrastructure sectors include all the hard assets used in the economy like roads, housing, telecom, etc.

Knowledge sector
The part of the economy where knowledge is the underlying driver of the value and the activities.

Luxury sector
The economic activities that provide goods and services to the wealthy in society.

Production sectors
The part of the economy where the essentials of the economy are produced, from raw materials in mining and agriculture to manufactured items.

Public and private sectors
The public sector is owned or operated by government. Private sector ownership is in private hands rather than government.

Relief and development sector
All the organizations working in international and local relief and development ... it is part public and part private.

Service sectors
All of the sectors that provide services in the economy

Social sectors
Education and health are the main components.

The text being discussed is available at


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