When the Sustainable Development Goals (SDGs) were launched, the United Nations Secretary General called them a “shared responsibility”—a clear signal that the private sector was expected to act alongside governments. With 2030 fast approaching, it is clear governments alone cannot deliver on these ambitions.

For UNDP, this has meant widening its lens—seeing the private sector not just as small local businesses, but as the full spectrum of enterprises, from microenterprises to global corporations. The bold expectation was that business would help drive employment and economic resilience, adopt fair practices and protect the planet—an urgent priority in the face of the climate crisis.

Two recent reports from the UNDP Independent Evaluation Office—a global evaluation of private sector development, and an evidence synthesis focused on the Arab States, where MSMEs account for 97 percent of businesses—highlight the same reality: the private sector’s role is indispensable, yet UNDP must evolve to unlock its full potential for sustainable development.

What we learned: what works and how UNDP can do more

Think bigger picture. The most effective approaches operate at three interconnected levels: macro level (shaping policy and incentives), meso (strengthening institutions, trade and value chains), and micro (direct enterprise support). UNDP need not do everything, but it must understand the whole ecosystem and partner strategically. Most current work remains at the micro level, with some exceptions.

• In Uzbekistan, the Aid for Trade project tackled all three levels; from aligning national trade policy with global standards to strengthening trade institutions to helping entrepreneurs adopt green technologies and improve market access. The trade platform it supported has delivered over $150 million in export contracts since inception, with most participants willing to pay for ongoing services.
• In Egypt, UNDP’s partnership with the MSME Development Agency combined regulatory reforms with practical business support; from creating an enabling environment for formalizing businesses to expanding access to finance and training and linking local products to wider markets. Aligning enterprise support with national policy frameworks fostered MSME growth, job creation and increased women’s participation in entrepreneurship.

Think digital, but in context. Digital tools can transform business models and resilience, especially during global disruptions and in the rise of e-commerce. But without addressing digital gaps like infrastructure, skills and gender divides, many pilots remain just that. In the Arab States, most digital MSME initiatives are still small-scale, hampered by poor connectivity, regulatory bottlenecks and a persistent gender digital divide. Successful initiatives run longer, align with national strategies and build on familiar technologies that lower adoption barriers.

Partner strategically with large companies. Anchor firms can link MSMEs to markets, transfer technology, diversify economies and raise industry standards—all essential for aligning business practices with the SDGs. UNDP’s partnership with Lavazza is a well-known example. It enabled deforestation-free coffee exports, strengthened local processing and facilitated commercial agreements for producers.

Yet UNDP still too often treats business as a beneficiary, not a partner—and its engagement with large companies remains limited. Why?

What will it take to work with the private sector as a true partner?

UNDP’s history is rooted in working with governments—it’s in its mandate. But that should not mean working only with the public sector. Stronger collaboration with Chambers of Commerce, industry associations, financial institutions and private sector leaders is essential. When businesses are involved from the start, projects are far more likely to address real market needs.

To move beyond a government-centric paradigm and catalyse private sector contributions, UNDP must change not just what it does, but how it works:

• Develop clearer, faster, and more flexible internal tools for partnering.
• Translate policy reforms into practical guidance for country offices.
• Foster a cultural shift to view the private sector as a co-equal partner.
• Increase agility to match the pace of business, especially when engaging investors and large firms.

Clear theories of change and service offers will help UNDP connect the dots, align efforts across levels and remain strategic.