4.2.2. Key Constraints and Promising Strategies in Applying the Value Chain Approach with Youth
Key constraints and promising strategies in applying the value chain approach with youth include:
Applying the value chain approach with at-risk youth requires an in-depth understanding of the target group. The great diversity of youth means that projects can rarely offer a standardized model for all participants. Moreover, many at-risk youth are less patient to continue participating in projects they do not perceive to offer value. Potential solutions include:
- Disaggregate youth populations. Being aware of differences within youth populations from the start, and targeting value chain analysis accordingly, assists in ensuring a comprehensive understanding of issues that are specific to sub-populations of at-risk youth. This may include holding separate interviews, asking questions that draw out perceived differences between youth populations (e.g., employer preferences for certain types of youth), conducting follow-up interviews to explore issues raised within group discussions, and disaggregating all research findings by important youth segments (e.g., age, sex). The International Rescue Committee (IRC), for instance, conducted a separate assessment for female youth in Liberia in recognition that there might be separate constraints that they faced. They found that stigma and misperceptions of low salaries were dissuading girls from engaging in vocational training. As a result, additional information was provided to female youth that resulted in increased enrollment.
- Select Appropriate Value Chains. Effective youth programming is linked in part to the selection of value chains that are appropriate for youth interests and capacities. Selection criteria that have been tested and found to be effective in working with at-risk youth include:
- Attainable capital and skill requirements. As discussed below, youth are less likely to have the assets, experience or skills of adult populations. Therefore, value chains that require high capital investments or skill levels may not be appropriate.
- Quick monetary impact. At-risk youth often need to see a fast return on their activities to remain engaged, in light of their financial obligations.
- Matched to youth interests. Being sensitive to youth priorities is important, as youth are often unwilling to engage in sectors that they do not consider to offer adequate long-term prospects.
- Appropriate vis-a-vis family obligations and peer perceptions. Youth are often particularly sensitive to the expectations and opinions of those they are close to, which can influence their selection of which value chains to engage in and in what capacity.
- Acceptable for personal safety and health. At-risk youth tend to have the weakest ability to advocate for themselves, and thus may need to accept work in very unsafe conditions and be assigned particularly risky tasks.
- Include youth in value chain selection and analysis. The incorporation of youth within the value chain analysis process as team members can add significant analytical value by integrating a youth perspective. It can also serve to build capacity, empowerment and marketable skills. The Education Development Center’s Haitian Out-of-School Youth Livelihood Initiative project, for instance, linked stronger and weaker youth to gather market information together and inadvertently created informal mentoring opportunities. For maximum effectively, practitioners should encourage youth to participate only when their contribution is needed to avoid wasting their time and curbing their enthusiasm. Further, organizations should expect that the process may require more time than is typical for a value chain analysis.
- Tailor project design to life stages. Adopting multiple project strategies to reflect youth diversity allows projects to cater to a larger target population. Cardno's Value Girls project in Kenya, for instance, used different strategies so that it could both reach youth that were still in school and also cater to those who had completed their education. The project linked older youth directly to value chain opportunities while building the skills and confidence of younger youth that were still in school to eventually follow suit, as illustrated here. 
A lack of significant work experience and limited personal relationships constrain the ability of youth to access employment opportunities and develop their own enterprises. This is exacerbated by the poor quality of basic education in many contexts and the impression of some employers that youth are uninterested in the types of entry-level employment for which their experience and skills best prepare them. Those who are employed are particularly prone to exploitative work environments given reduced bargaining power, power imbalances and less developed negotiation skills. Potential strategies to address these challenges include:
- Leverage youth mentors for value chain preparedness. For younger youth, the transition to earning a livelihood is often challenging and may lead to poor livelihood choices in the absence of adequate information and perceived opportunities. Practitioners are finding that mentoring can often be more effective for at-risk youth than can training alone. Cardno’s Value Girls project in Kenya is easing this transition by providing value chain preparedness to in-school children and youth. Older youth already engaged in promising value chains are supported to be role models to younger children still in school.
- Look for youth entry points. Rather than focusing on developing and implementing a competitiveness strategy for an entire value chain, EcoVentures International (EVI) instead identifies where youth can best enter promising value chains. This analysis is completed during the program design stage of the value chain cycle. EVI applies a labor market assessment to identify employment opportunities, while surveying value chain actors to identify what value chain functions are bottlenecks in the sector that present options for self-employment. By focusing on functions, EVI is then able to build detailed skill profiles that identify the elements required for youth to be successful in the selected sectors, and build linkages with service providers offering needed support services (e.g., finance, training) and lead firms interested in employing youth. When relevant, EVI identifies where youth could provide complementary goods and services that support overall growth of the value chain or to create value from unused waste streams.
- Support resiliency. Building strong and lasting benefits for at-risk youth depends upon ensuring that they have the knowledge, confidence and ability to successfully navigate changes in the market. Resiliency is a core objective of the IRC's youth programming and is built into many activities. Training on business plan development, for instance, includes the introduction of scenarios and unexpected situations that youth need to adjust to. Measurement is accomplished through periodic assessments of problem solving and contingency planning.
- Build complementary life skills and capacities. There are a range of complementary skills that have a major impact upon the ability of at-risk youth to effectively engage in value chains either as employees or entrepreneurs. These include market and financial literacy, communication skills and self-confidence. Where lacking, youth may be unwilling to pursue profitable opportunities that are created with the value chain approach. Mercy Corps recognized that life skills were important to the success of at-risk youth in Niger who were already receiving training in entrepreneurship and financial access. Under its Skills and Knowledge for Youth Empowerment (SKYE) project, modules were provided in self knowledge and self-confidence, group management and citizenship, among other topics. Even once engaged in value chains, youth often continue to look for opportunities to advance their education. Research indicates that rather than being incompatible, youth often strongly desire such opportunities for “learning while earning”. Building flexible avenues for skill advancement that are compatible with youth livelihoods can support the capacity of youth to continue investing in personal upgrading opportunities.
Given their life stage, youth are less likely than adults to have assets to invest in value chain opportunities. Research has found that youth need a safe place to save, yet are constrained by financial illiteracy, little experience with financial institutions, and the inability of younger youth to access financial services from the formal banking sector. Evidence indicates that, from an institutional perspective, providing financial services to youth requires a long-term perspective as initial transactions may not be profitable. Younger youth are usually legally barred from owning formal assets, opening bank accounts and entering into contracts. At present, research suggests that just 0.025% of the loan portfolios of major financial institutions are currently allocated to youth. Moreover, many at-risk youth suffer the appropriation of assets (“asset stripping”) by older guardians or other adults within their community. Having access to safe mechanisms to protect assets, such as informal savings accounts, is therefore critical for at-risk youth. Unfortunately, financial institutions are generally reluctance to lend to start-ups and those without previous business experience. Potential strategies to address these issues include:
- Promote microfranchising models. Low barriers to entry make microfranchising a particularly promising strategy for engaging at-risk youth who lack assets to invest in other opportunities. IRC piloted microfinanchising as an innovative model to generating low-risk self-employment opportunities for youth in Sierra Leone. In this pilot, IRC identified small business opportunities to retail the products or services of a larger local company (e.g., cosmetics, food products, mobile phone cards and accessories). One hundred youth were given the opportunity to select a franchise model that appealed to them, approach firms to present the concept, receive some basic training (on both the business model as well as basic business skills), and then to be mentored through the process of starting and running their business. Challenges were addressed in this training and new business concepts were introduced as they became most relevant to the actual business experience and needs of youth. The advantage of this approach was that the larger local businesses were invested in the model and seemed likely to replicate it based on their initial experiences. Results after one year indicated that 96 percent of youth earned a profit and were applying their earnings to business reinvestment (42 percent), saving (24 percent) or other household expenditures including school fees (34 percent). Social impacts included reinvestment in education and improved social capital among participants. The franchisors also reported increased earnings. IRC is now scaling the model to reach larger numbers of youth.
- Enable asset accumulation. Increasingly, projects are linking at-risk youth with opportunities to save. Youth are able to draw upon these resources to make investments in economic and social investments. Catholic Relief Services (CRS) in Rwanda has used its Savings and Internal Lending Communities (SILC) savings methodology to facilitate asset accumulation among vocational training graduates. CRS found that inexperience, lack of physical assets and collateral, and limited social connections all limited the capacity of trained youth to access microfinance loans. It recognized that despite without access to capital, youth would be unable to leverage their vocational and business skills training to create self-employment opportunities. Since introducing the SILC methodology, there have been notable changes among participating youth. Social capital has been strengthened, and 90% have been able to improve their safety net through the purchase of national health insurance. In some cases, SILCs comprised entirely of youth have even launched joint businesses.
Several guides and methodologies have been developed by practitioners for assessing markets and economic opportunities for young people. These include:
- Youth Livelihoods Development Program Guide
- Youth Labor Market Assessments
- Guide to Cross-Sectoral Youth Assessments
- Girl-Centered Value Chain Analysis and Situation Assessment
- ↑ M. Beauvy-Sany et al, Guidelines and Experiences for Including Youth in Market Assessments for Stronger Youth Workforce Development Programs, (2009), 1.
- ↑ M. Beauvy-Sany et al, Guidelines and Experiences for Including Youth in Market Assessments for Stronger Youth Workforce Development Programs, (2009), 4.
- ↑ Adapted image from Emerging Markets Group, Early Lessons Targeting Populations with a Value Chain Approach, (2009) 22.
- ↑ World Bank, World Development Report 2007: Development and the Next Generation, (2006), 6.
- ↑ EcoVentures International, Youth Labor Market Assessment, North Eastern Province, Kenya: A study of market opportunities and workforce needs for youth, (2010), 26-27.
- ↑ Emerging Markets Group, Early Lessons Targeting Populations with a Value Chain Approach, (2009), 22.
- ↑ EcoVentures International, Youth Labor Market Assessment, North Eastern Province, Kenya: A study of market opportunities and workforce needs for youth, (2010).
- ↑ Making Cents, State of the Field in Youth Enterprise, Employment, and Livelihoods Development, (2010), 57.
- ↑ D. James-Wilson, Youth Livelihoods Development Programme Guide, (2008), 8-9.
- ↑ Making Cents, State of the Field in Youth Enterprise, Employment and Livelihoods Development, (2010), 187.
- ↑ Making Cents, State of the Field in Youth Enterprise, Employment, and Livelihoods Development, (2009) 165.
- ↑ S. Hashemi and R. Rosenberg, Graduating the Poorest into Microfinance: Linking Safety Nets and Financial Services, (2006), 2.
- ↑ A. Mukankusi, M. Mayson, T. Caso, W. A. Rowe, Empowering Rwandan Youth Through Savings-Led Microfinance, (2009), 5-8.