As debates intensify over how Kenya can create quality jobs, strengthen SMEs, and build climate-resilient local economies, development partners are under growing pressure to rethink the way they design and deliver their plans.
For most, the traditional project-based approach has sufficed, with jobless youth, for example, plunged into the deep end of entrepreneurship in a one-size-fits-all approach that assumes everyone is cut for business.
However, Swisscontact Kenya, an NGO, has a different approach known as Market-Systems Development (MSD). Sharon Mosin Urner, the country director of Swisscontact Kenya, talks of how they have used MSD to bring about systemic change.
What is a market-systems development (MSD) approach?
Before we talk about MSD, it’s important to recognise the broader context shaping development today. Around the world, public financing for development is under pressure, and governments—particularly in emerging markets—are being asked to do more with far fewer resources. Kenya is no exception.
With limited fiscal space, the need for solutions that are efficient, scalable, and sustainable has never been greater.
This is precisely where the market-systems development approach becomes transformational.
For nearly three decades in Kenya, Swisscontact has worked from a simple but powerful premise: when the incentives of all actors in a system are aligned, markets become engines of opportunity.
When we enter a sector, we begin by understanding how the system functions—what is working, what is not, and why gaps exist. Take the skills ecosystem, for example. Youth unemployment is not only about the absence of jobs; it is also about the misalignment between what training institutions deliver and what industry demands.
So we bring together students, employers, trainers, and government to examine the “transactions” between them:
What motivates each actor?
What holds them back?
What incentives would unlock the behaviour change the market needs?
This analysis led us to the construction sector and, eventually, to plumbing and electrical trades, where employers consistently cited skill gaps even among diploma graduates. Students want meaningful employment. Schools want strong placement rates. Employers want productivity. Government wants reduced unemployment.
MSD helps each of these actors realise their goals by strengthening the system that connects them.
What would a truly market-system approach that addresses root causes of youth unemployment look like? And how would you evaluate it compared to the traditional approach?
We are looking at different levels of changes. When we go into a sector, we want to see market-level changes. Changes at the client level are a product of systemic change.
Our project called PropelA - dual apprenticeship is modelled on the Swiss dual apprenticeship. It’s a two-year programme where students spend 75 percent with companies and 25 percent at school. That is different from the current TVET offering where you’re in school then three months of internship.
Our dual apprenticeship model is demonstrating what system-level change looks like in practice.
Companies are investing in young people, paying stipends, contributing to training costs, and shaping the curriculum. Regulators such as NITA are unlocking new mechanisms—like releasing the apprenticeship levy—to sustain the model. Training institutions are expanding programmes because they see the results.
Does the programme prepare youth for fast-changing technologies and future skills?
As industries evolve, the skills required must evolve with them. That is why we are strengthening our training approach to ensure apprentices graduate with both technical mastery and digital fluency.
Digital literacy is no longer optional. It is fundamental to employability and competitiveness, and we are embedding it across all areas of training. Our Future-Fit programme ensures that the skills we teach today prepare young people for the jobs of tomorrow and the technologies reshaping our industries.
What is the proper approach to financing youth-led enterprises and SMEs?
Yeah, that is tricky. You're right, there are a lot of guarantees and de-risking mechanisms sitting within banks being under utilised. There was a regulatory barrier and that's why they were under utilised. Banks are regulated and don’t want their books classed as risky.
We approach de-risking and blended finance for SMEs and students by looking at sustainability. Students get stipends but not all can afford school fees, so we are de-risking school fees to get them through school. Our partner financier is not a commercial bank but a specialised school-fees lender. They only recover after the students have been employed or get into business.
Financing is important, but it is only one part of what makes enterprises thrive.
Should Kenya accept that not everyone is cut out for entrepreneurship?
Yeah, absolutely. Not everybody can be an entrepreneur. The way we approach development is that when we create a mushroom of small enterprises, we assume we've solved the problem. People have similar businesses and wonder why they're not making progress.
People who can be employed need the right skills.
How do you shield the programme from political risks?
Public institutions play a pivotal role in shaping the systems we work within. Our engagement with national and county governments is anchored in shared development priorities- creating jobs, strengthening markets, and improving service delivery. By demonstrating how limited public resources can catalyse private investment and scale, we build partnerships that endure across political cycles.
Our goal is simple, to support government in delivering sustainable, locally-owned solutions.
How can counties use MSD to build viable local economies?
All these economic transformation plans aim to create robust local economies. Swisscontact is a foundation that was set up by private sector companies in Switzerland, so private-sector approach is in our DNA.
Counties are recognising that real economic transformation comes from unlocking private-sector investment and strengthening the systems that support producers, service providers, and entrepreneurs.
Our role is to catalyse these markets—creating strong supply chains, enabling enterprises to scale, and ensuring communities benefit from emerging economic opportunities. When counties embrace this approach, they build robust, self-sustaining local economies that deliver prosperity far beyond the lifespan of individual projects.
How can MSD create more inclusive, scalable opportunities for women and underserved groups?
An inclusive economy is one that recognises the potential of every citizen. We deliberately design our interventions to ensure women and underserved groups can participate meaningfully in markets - whether through apprenticeships, employment pathways, or entrepreneurship support.
We avoid creating “grant-preneurs”. People go from grant to grant but are not doing business. We support people by creating structures that support their business. Seed capital may be there but very minimal. If you need capital, you go through a financial institution.
When systems open up for women, communities prosper, industries diversify, and opportunities multiply. Inclusion is not an add-on to our work; it is central to how we build equitable and sustainable economies.
