SMEs sustainable development

MSD Doughnut

Each market system in market systems development consists of three main components. These are: core market that connects the demand and the supply markets, supporting functions to support the transaction between those markets and rules they should follow. They form the so-called MSD doughnut through which all interventions are analyzed before they are implemented.

Core Market

The cоrе market contains the supply side and the demand side. Both sides are observed separately, that is, who is on the supply side and who is on the demand side. The core market connects the two parties into one market – which is actually the market that the development systems implementer serves with the intervention. Starting from here, it is considered what are the needs of the market being served, where there are imperfections and why, if something can be done to improve the situation.

Supporting functions are: services, resources and infrastructure. Can the services offered be improved and how? Can more resources be offered if there is a shortage of them? How can the improvement of the infrastructure affect the improvement of the market served? Who are the key partners for the implementation of the intervention? Do they want to get involved and invest in the implementation of the intervention? These are just some of the questions that arise when analyzing whether an intervention would succeed.

Supporting Functions


In every market system there are rules that must be followed. During the implementation of the intervention, it is considered which are the rules and laws that should be respected. This way, the intervention itself is formed and the implementer takes care not to harm other market players in the economy, but rather work with them.