Summary:
- Clear definitions reveal different MSME needs: Mobility (people) and logistics (goods) vary widely depending on context, what looks like a major constraint in structured markets may not even register in fragmented, informal ones, making categorization key to diagnosing real problems.
- Logistics problems often reflect deeper market failures: Infrastructure alone (roads, trucks, subsidies) doesn’t solve logistics challenges if underlying markets are fragmented and demand is unpredictable.
- Ecosystem innovators create the conditions for growth: “Anchor” firms act as coordinators that organize demand, stabilize transactions, and make MSMEs viable participants in structured markets, unlocking both better logistics and broader market access.
The Global Prosperity team often works to understand nonconsumption and the struggles surrounding market creation because we believe market-creating innovations are one of the most powerful drivers of prosperity.
Currently, we’re working on some research related to mobility, logistics and market access issues in Nigeria. Some of the lessons we’re learning can be applied to many sectors and geographies beyond the scope of this project.
Lesson #1: Definitions and categories help us pinpoint specific struggles.
First, what constitutes mobility and logistics? If you look this up on a search engine, the Internet will tell you that mobility focuses on the movement of people and logistics is the movement of goods and resources. For the purposes of this article, we’ll keep the definitions simple.
That being said, even within this definition there is room to explore the kinds of mobility and logistics we’re looking into. For micro, small, and medium enterprises (MSMEs) mobility and logistics can be personal (perhaps a farmer traveling from a farm to a warehouse), it can apply to equipment (tractors, refrigeration), it could be for aggregated demand (food delivery), or aggregated production (500 cartons of strawberries). It may also look very different depending on the type of market an MSME operates in.
In a coordinated and structured market, such as a food delivery platform, MSMEs are constantly aware of their dependence on reliable logistics. However, in a more fragmented “informal” market, where trade is localized and transactions are more sporadic, MSMEs may not experience logistics as an urgent or constant business need.
Understanding that movement may look different and serve different purposes for different MSMEs is a reminder that shared definitions and clear categorization are foundational starting points in understanding struggle in any sector.
Lesson #2: Reliable logistics require reliable markets.
We entered this research with several hypotheses, one being that logistics was a barrier to business growth. Now, we’re beginning to understand that logistics reveals something deeper about the markets that MSMEs participate in.
An insightful conversation we had with Oghenetega Iortim, the CEO of Figorr, led us to a story about 500 cartons of wasted strawberries. The post vividly describes what happens when logistics infrastructure fails. A time-sensitive product lost value and created cascading losses because a coordinated logistics chain failed. Although the story was about strawberries, it could have easily been milk, vaccines, or anything requiring cold storage and reliable transport.
At first glance, this sounds like a straightforward infrastructure problem. But our conversations with multiple Nigerian mobility and logistics stakeholders, alongside a review of past development initiatives aimed at improving mobility and market access, suggest something more complicated may be happening.
Even in instances where roads have been built, trucks have been provided, or transport has been subsidized, MSMEs continue to experience similar breakdowns in logistical reliability and the growth constraints that follow. As important as these types of infrastructure solutions are, on their own, these interventions may not solve major logistics challenges if the underlying market remains fragmented, uncoordinated, and unpredictable.
It’s like patching up a tire that has other nails deflating it. No amount of patchup work will suffice.
Reliable logistics systems depend on reliable economic activity. In fragmented markets where transactions are irregular and demand is unpredictable, logistical unreliability often becomes normalized. But as markets become more coordinated, timing, fulfillment, aggregation, and quality preservation suddenly become essential. A strawberry distributor operating within a structured supply chain experiences transportation failure very differently than a trader selling intermittently in a local market. The issue is no longer simply movement, but organization, synchronization, and coordination.
Lesson #3: Ecosystem innovators are coordinators and organizers.
That emerging insight also relates to how we think about MSME growth interventions. One category focuses primarily on supply-side interventions: building roads, expanding transport access, or providing vehicles and mobility infrastructure. Another category focuses on creating and coordinating demand. This requires deep listening: understanding why specific MSMEs struggle to grow within their specific market contexts and asking, “What demand is going unmet, and what systems are needed to reliably serve it?”
In reality, these categories are deeply interconnected. What we increasingly hear is that ecosystem innovators, the firms linking MSMEs to demand, often act as coordinators and organizers within fragmented markets. They create businesses around specific products and services, in addition to developing the coordination, reliability, predictability, and repeat transactions MSMEs need in order to grow. In many ways, they help transform chaotic, fragmented economic activity into organized markets.
There are two levels of nonconsumption here: nonconsumption of the product or service being offered to the average household/end consumer, and the nonconsumption of reliable logistics and mobility for the MSMEs. These forms of nonconsumption often co-evolve. When customers cannot reliably access strawberries, vaccines, or dairy, MSMEs often cannot justify investing in better logistics because demand for their products remains thin, fragmented, and unpredictable.
Ecosystem innovators then act as an anchor to help these MSMEs access a reliable market, and then infrastructure emerges because markets become viable enough to sustain it.
So far, we are learning that mobility and logistics challenges cannot be understood separately from the structure of the markets MSMEs participate in. In some cases, the real challenge may not simply be moving goods more efficiently. It may be creating markets coordinated and productive enough to make reliable movement economically viable in the first place.
