Market Analysis – 93131507 – Displaced persons assistance services

1. Executive Summary

The global market for displaced persons assistance services is experiencing unprecedented growth, driven by escalating geopolitical conflict and climate-related disasters. The current market is estimated at $35.2B and has grown at a 3-year CAGR of est. 9.1%. While this presents opportunities for corporate social responsibility (CSR) and foundation-led engagement, the single greatest threat is the growing gap between humanitarian needs and available funding, which creates extreme price and service delivery volatility. Procurement strategy must focus on building resilient, flexible partnerships to navigate this unstable landscape.

2. Market Size & Growth

The global Total Addressable Market (TAM) for services directly targeting refugees, asylum seekers, and Internally Displaced Persons (IDPs) is estimated at $35.2 billion for 2024. This market is projected to grow at a compound annual growth rate (CAGR) of est. 6.5% over the next five years, driven by the increasing number and duration of displacement crises worldwide. The three largest geographic markets for service delivery are currently: 1) Middle East & North Africa (MENA), 2) Sub-Saharan Africa, and 3) Europe, largely due to the Syrian, Sudanese, and Ukrainian crises, respectively.

3. Key Drivers & Constraints

1. Demand Driver: Record Displacement. The primary driver is the sheer scale of need. The global population of forcibly displaced people surpassed 117 million in 2023, a record high, fueled by new and protracted conflicts in Ukraine, Sudan, and Palestine, alongside climate emergencies. [Source - UNHCR, June 2024]
2. Funding Constraint: Insufficient & Earmarked Aid. While humanitarian funding is at an all-time high, it consistently falls short of assessed needs. In 2023, the global humanitarian appeal was only 35% funded, the lowest level in years. [Source - OCHA, 2024]. Much of the available funding is tightly earmarked by donors for specific crises or activities, reducing supplier flexibility.
3. Policy Driver: Rise of Localization. Major government donors and UN agencies are increasingly pushing to channel funds directly to local and national organizations under the "Grand Bargain" commitments. This is shifting the competitive landscape away from a sole reliance on large international NGOs.
4. Cost Driver: Inflation & Logistics. Operational costs in crisis zones are highly volatile. A combination of global inflation, fuel price spikes, and insecure supply routes significantly impacts budgets for transportation, security, and essential goods.
5. Technology Shift: Digitalization of Aid. There is a rapid shift towards using technology for beneficiary registration (biometrics), needs assessment (remote sensing/GIS), and aid delivery (mobile money for Cash and Voucher Assistance), creating new capabilities and data privacy risks.

4. Competitive Landscape

Barriers to entry are High, requiring significant logistical expertise, established trust with both donor governments and affected populations, robust safeguarding policies, and the ability to operate in high-risk environments.

⮕ Tier 1 Leaders * International Rescue Committee (IRC): Global leader with a strong focus on evidence-based programming, research, and advocacy; extensive field presence in over 50 countries. * Mercy Corps: Known for its focus on building secure, productive, and just communities, with strong capabilities in market systems development and technology for development (T4D). * Norwegian Refugee Council (NRC): Specialist in providing legal assistance (ICLA - Information, Counselling, and Legal Assistance) and shelter; operates the highly respected Internal Displacement Monitoring Centre (IDMC). * Serco Group plc: A for-profit government contractor providing immigration support services, including asylum seeker accommodation and processing, primarily for governments in the UK and Australia.

⮕ Emerging/Niche Players * Hala Systems: Technology firm providing advanced early warning systems for civilians in conflict zones. * NeedsList: Software platform connecting corporate, government, and individual donors with the real-time needs of local aid organizations. * Local NGOs (e.g., Syrian Arab Red Crescent, Ukrainian Red Cross): National-level organizations with deep contextual knowledge and community access, increasingly targeted for direct funding. * GiveDirectly: Pioneer and leader in delivering digital cash transfers directly to those in need, challenging traditional in-kind aid models.

5. Pricing Mechanics

Pricing in this sector is almost exclusively project- or grant-based, rather than transactional. The primary pricing model for contracts with government or corporate entities is Cost-Plus-Fixed-Fee or a variation based on a Negotiated Indirect Cost Rate Agreement (NICRA). This involves reimbursing the supplier for all allowable direct costs (staff, supplies, transport) and applying a pre-agreed overhead rate (typically 8-22%) to cover administrative and support functions. A secondary model, growing with the rise of Cash and Voucher Assistance (CVA), is a per-beneficiary service fee.

The price build-up is dominated by personnel and logistics. Direct field staff, security, and transportation can account for over 60% of a typical program budget. Volatility is a constant challenge, requiring robust contingency planning.

Most Volatile Cost Elements: 1. Security Services: Costs for guards, armored vehicles, and risk advisory can increase by >100% within weeks following a security incident or change in conflict dynamics. 2. Transportation & Fuel: Local fuel shortages and global price shocks directly impact logistics. Diesel and jet fuel costs in some landlocked African nations saw spikes of ~40-60% over the last 18 months. 3. Foreign Exchange: Operations are funded in major currencies (USD, EUR) but executed in local currencies, which are often highly volatile. The devaluation of currencies like the Sudanese Pound (>50% in 2023) drastically alters purchasing power and local staff costs.

6. Recent Trends & Innovation

• Rise of Cash and Voucher Assistance (CVA): The use of cash or vouchers instead of in-kind goods has become a default modality. CVA now represents 21% of all international humanitarian assistance, empowering recipients and stimulating local markets. [Source - The CALP Network, May 2023]
• Predictive Analytics for Anticipatory Action: Organizations are increasingly using climate and conflict data to predict crises and release pre-arranged financing for early action before a disaster peaks. This "forecast-based financing" model is proving more cost-effective than purely reactive responses. [Source - IFRC, 2023]
• Focus on Accountability & Safeguarding: Following high-profile scandals, donors and boards are enforcing stringent requirements for Protection from Sexual Exploitation and Abuse (PSEA) and community feedback mechanisms, making robust safeguarding policies a critical supplier-selection criterion. (Ongoing since 2018)
• Consolidation in For-Profit Segment: Government services contractors are consolidating to expand their footprint in migration management. For example, Amentum acquired PAE Inc., combining two major players in government services, including support for diplomatic and humanitarian missions. (February 2022)

7. Supplier Landscape

8. Regional Focus: North Carolina (USA)

Demand for displaced persons assistance in North Carolina is driven directly by federal policy and global crises. The state is a significant hub for refugee resettlement, with demand surging following the withdrawal from Afghanistan (2021) and the war in Ukraine (2022). Key resettlement agencies like Church World Service, Lutheran Services Carolinas, and the U.S. Committee for Refugees and Immigrants (USCRI) form the core of local capacity. This capacity is frequently strained by unpredictable federal quotas and the need for specialized services (trauma care, legal aid, job placement). The primary challenge is a tight labor market for qualified case managers and translators, coupled with a shortage of affordable housing, which complicates initial settlement.

9. Risk Outlook

10. Actionable Sourcing Recommendations

1. Establish Framework Agreements with a Diversified Portfolio. Mitigate volatility by creating pre-vetted Master Service Agreements (MSAs) with 2-3 global Tier 1 suppliers and 1-2 niche, tech-focused players (e.g., for cash transfers or data). This enables rapid activation during a crisis while providing access to specialized innovation. The MSA should include pre-agreed indirect cost rates and key personnel charge-out rates to accelerate deployment.

2. Prioritize Suppliers with Proven "Localization" Strategies. Mandate that potential partners demonstrate a clear, measurable strategy for sub-granting and capacity-sharing with local organizations in key regions of corporate operation. Request metrics on funds passed to local partners (target >20%). This aligns with global best practice (the Grand Bargain), builds local resilience, and can improve program effectiveness and access in hard-to-reach areas.