The private sector is increasingly recognised as having important potential to help society adapt and become more resilient to climate change. Yet there is limited research examining how to promote and facilitate private sector adaptation in developing countries and, in particular, how governments can create an enabling environment to stimulate and incentivise domestic private sector adaptation.
This article addresses this gap through a review of the key factors required to provide an enabling environment for the private sector in existing adaptation literatures. The journal paper focuses on adaptation by small and medium enterprises (SMEs) in sub-Saharan Africa (SSA). To build on this review, the article draws on insights from a much larger, yet generally independent, literature on enabling environments for private sector development. This literature disaggregates the private sector and highlights key constraints to the development and growth of SMEs in SSA, including deficient infrastructure and evidence of an African gap in access to and use of finance. Both areas are then combined in a framework to identify the key “building blocks” that constitute enabling conditions for private sector adaptation.
This framework can be applied in many ways, including to focus strategies to enhance private sector adaptation and to identify trade-offs and interactions between policies or initiatives surrounding private sector development. By combining these literatures, the paper calls for a more holistic approach to develop enabling environments for SME adaptation and climate-resilient development that addresses the broader structural deficits that condition vulnerability and barriers that limit adaptive capacity.
Image: Saint Louis market scene, Senegal – by Carsten ten Brink
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