5.1. Overview of Value Chain Resources
Many different donors and implementing agencies use the value chain approach and have produced comprehensive guides, handbooks and tool kits to facilitate its application. These resources share the same basic concepts, but emphasize different aspects of the approach and vary with respect to the firms and individuals on which they focus. The following are some general reference materials on value chain analysis, and some project-specific documents by USAID AMAP and other groups using value chain development principles.
Key Resources on Value Chains
- Globalization and the Small Firm: A Value Chain Approach to Economic Growth and Poverty Reduction, Kula, Olaf, Jeanne Downing and Mike Field (2006): This AMAP paper by ACDI/VOCA argues that linking the poor to growth opportunities is crucial to generating sustainable economic growth with poverty reduction. In light of intensified global competitive pressures, efforts must focus on the performance of the whole industry in which small firms participate. The paper explores how micro and small enterprises (MSEs) and the industries they dominate can compete in globalized markets. The paper translates recent research into practical approaches for designing interventions that foster economic growth to reduce poverty. It starts with the conceptual AMAP value chain framework and moves toward the project cycle, offering practical guidance to the project designer in selecting industries for intervention, analyzing selected industries, developing a vision for competitiveness, and designing project interventions.
- The Governance of Global Value Chains, Gereffi, Gary, John Humphrey and Timothy Sturgeon (2005): This seminal work by Gereffi, Humphrey and Sturgeon builds a theoretical framework to help explain governance patterns in global value chains. It draws on three streams of literature – transaction costs economics, production networks, and technological capability and firm-level learning– to identify three variables that play a large role in determining how global value chains are governed and change.
- Integrating SMEs in Global Value Chains: Toward Partnership for Development, Kaplinsky, Raphael and Jeff Readman (2001): This report explores the changing role of the private sector in economic and industrial development and how the insertion of SMEs into global value chains can contribute to SME development. This research from the University of Sussex assesses the measures that can be taken to promote partnerships with the private sector.
- Local Enterprises In The Global Economy: Issues Of Governance And Upgrading: Hubert Schmitz edited this 2004 book that examines the upgrading strategies used by local enterprises in industrial clusters in Europe, Latin America, and Asia to have market share in the global economy. The book provides a number of perspectives on challenges and approaches to upgrading.
- Learning and Earning in Global Garment and Footwear Chains, Schmitz, Hubert, IDS (2006). This article by Hubert Schmitz explores the power of the global value chain approach in explaining the growth of production capabilities and the distribution of gains. It suggests that the upgrading opportunities of local enterprises are structured by the relationships in global value chains. This is shown clearly in the case of the garment and footwear industry, where advances have been rapid in product and process upgrading but more limited in functional upgrading. With regard to the distribution of gains, the global value chain approach also provides clear hypotheses but the empirical evidence remains weak.
- Making Markets Work for the Poor (M4P) Approach (2008): This DFID- and SDC-funded set of documents aims to consolidate existing implementation experience of the M4P approach. The M4P Synthesis Paper explains the essence of the M4P approach – its rationale, including evidence of impact and key features in implementation. M4P Perspectives introduces the conceptual underpinnings of M4P and explores its application in different markets including finance, agriculture, water, labor, land and climate change. The M4P Operational Guide provides an operational resource on how to implement M4P, including an overview of good practices, common management challenges and the main lessons from experience.
AMAP BDS Briefing Papers on Value Chain Approach
The following briefing papers are developed under ACDI/VOCA's AMAP BDS project to describe emerging good practice in the application of the value chain approach:
- Key Elements of the Value Chain Approach Briefing Paper: This briefing paper outlines some of the key elements of the value chain approach as articulated and promoted by USAID’s Microenterprise Development office.
- The Value Chain Framework Briefing Paper: This briefing paper provides an overview of the value chain framework, a tool that can be used for identifying and analyzing the relationships between firms in an industry. The paper includes a description of the structural and dynamic elements that affect the performance of the firms and industries, as well as a few key lessons learned that have come out of research and field experience.
- Engaging End-market Buyers in Value Chain Development Briefing Paper: This briefing paper offers practical recommendations for engaging end-market buyers in the development and implementation of strategies for improved value chain competitiveness.
- Business Enabling Environment and the Value Chain Briefing Paper: This briefing paper provides guidelines to practitioners to design and execute successful business enabling environment interventions using the intersection between the reform and value chain development processes, describes what makes a reform successful and how to target reforms, and addresses reforms in the post-conflict context.
- Strengthening Vertical Linkages Briefing Paper: This briefing paper provides guidelines for practitioners for strengthening vertical linkages. The paper explains the characteristics of effective vertical linkages and recommends good practices for transforming or strengthening vertical linkages to increase competitiveness and ensure greater distribution of benefits to small firms. Lessons from the field illustrate these good practices.
- Groups, Associations, and Other Horizontal Linkages Briefing Paper: This briefing paper discusses the linkages that MSEs form in order to address constraints in the value chain or to take advantage of business opportunities. The paper outlines those benefits that arise from these linkages, internal and external catalysts for their creation, varying degrees of formality and characteristics of effective associations. Recommended practices and lessons from the field about developing strong linkages are also included.
- Finance in the Value Chain Framework Briefing Paper, 2009: "Value chain finance” is defined and applied in many ways, referenced in countless articles and discussed at numerous conferences. This brief paper is designed to clarify the term for practitioners, implementers and donors by describing what value chain finance is, why it matters, its relevance for value chain development, and some recommended good practices for designing value chain finance interventions.
- Integrating ICT into Value Chain Development Briefing Paper: Information and communications technology (ICT) offers a growing number of ways to exploit opportunities and address constraints to value chain growth and competitiveness. This briefing paper describes some current trends in ICT, practical uses for ICT in value chain development, lessons learned from the field, and special considerations for conflict-affected environments.
- Using the Value Chain Approach to Design a Competitiveness Strategy Briefing Paper: This briefing paper provides guidelines for practitioners for working with the private sector to design programs that extend impact beyond individual firms to industry-wide competitiveness. The paper includes descriptions of the components of a competitiveness strategy (end-market competitiveness, upgrading requirements and a plan for sustainability), as well as the steps involved in developing a strategy.
- Value Chain Governance Briefing Paper: Governance is a dynamic feature of value chains that characterizes the relationships or linkages among stakeholders in the chain. Value chain governance is important as it relates to the ability of a stakeholder to determine, control and/or coordinate the activities of other actors in the value-added chain. This briefing paper describes the factors, types, and determinants of governance, and gives some recommendations for practitioners to intervene to effect systemic change and industry behavior.
- Transforming Inter-Firm Relationships to Increase Competitiveness: Briefing Paper: USAID’s value chain approach emphasizes the role of inter-firm relationships in achieving and sustaining competitiveness. This briefing paper provides guidelines for USAID missions and practitioners for analyzing these relationships and intervening successfully in relationships to improve competitiveness and the benefits that small enterprises are able to capture.
- Participatory Approaches to Value Chain Development Briefing Paper: A truly participatory approach to value chain development moves beyond extractive or consultative interactions with stakeholders to an engagement that challenges behavior and stimulates collaborative solutions to value chain constraints. This briefing paper aims to demonstrate why and when participation can be effective, and gives guidance on how to implement participatory approaches throughout the value chain development project cycle.
- MSE Upgrading in Value Chains Briefing Paper: This briefing paper offers observations and suggestions for promoting firm-level upgrading, with an emphasis on upgrading among micro-and small enterprises (MSEs), including small-holder agriculture. It is not intended as the final word on MSE upgrading, but instead serves as a point of departure for stimulating discussion and shared learning based on project implementation experience. Since so much of private sector development depends on successful upgrading, the purpose of this brief is to open the discussion of emerging best practices.
- Selection of Value Chains Briefing Paper: This briefing paper is designed to provide guidance to donors, implementers and practitioners on value chain selection within activities seeking to develop inclusive market systems.
- Understanding Facilitation Briefing Paper: This briefing paper provides an overview of the facilitation approach to project implementation, which attempts to address the challenges of achieving sustainability and scale in value chain or market systems development. Facilitation attempts to stimulate change in market systems without the project taking a direct role in or becoming part of the system. This paper provides an overview of the key principles for facilitation, as well as tactics for implementation and methods to measure results.
- Integrating Food Security and the Value Chain Approach Briefing Paper: This briefing paper identifies challenges, solutions and emerging good practices in using the value chain approach to improve food security. It also highlights synergies where the value chain approach can contribute towards food security objectives and vice versa. Adopting a food security lens can help value chain practitioners identify the potential impact of activities on food security, develop mitigation strategies for possible negative impacts, and seek strategies that create positive outcomes.
- Pushing the Poverty Frontiers of Inclusive Value Chain Development Briefing Paper: This briefing paper presents some emerging guidance around how value chain development can explicitly ‘pull’ the very poor into markets in gainful ways. It highlights program design strategies, examples of adapting value chain development principles, the importance of appropriately sequencing program interventions, as well as some key challenges when working with the very poor.
Guides and Handbooks
- The West Africa Rice Field Work Protocol and the West Africa Value Chain Analysis Protocol were developed by ACDI/VOCA and DAI in support of the USAID Global Food Security Response initiative to conduct a set of multi-layered comprehensive studies to inform investments aimed at improving food security and raising rural incomes in West Africa. These two resources describe an approach, methodology and practical tools for conducting regional analyses of staple crops.
- Building Competitiveness in Africa's Agriculture: A Guide to Value Chain Concepts and Applications, by JE Austin Associates for The World Bank. This guide contains concepts and definitions, a literature review, and numerous tools and case studies.
- Donor Interventions in Value Chain Development, a guide by SDC (the Swiss Agency for Cooperation). This guide focuses on the role of the donor in the value chain in analysis; interventions; with actors, supporters (service providers) and influencers (BEE) of the value chain; and in measuring and evaluating interventions.
- Structure-Performance-Conduct and Food Security, a guide by FEWS NET. Deeper market analysis can contribute to food security and early warning analysis. This guidance aims to help FEWS NET better incorporate market structure, conduct and performance into regular monitoring, analysis and reporting.
- Moving Towards Competitiveness: A Value Chain Approach by FIAS (IFC/WorldBank) places an emphasis on the business environment and public policy of a value chain. The primary constituency of the analysis are governments. An important component of its value chain analysis is measuring the pre- and post-intervention performance(pp 36-51).
- Field Manual for Subsector Practitioners by DAI's GEMINI project. This manual describes the procedures involved in conducting subsector analysis. Subsector analysis is presented as a tool for facilitating “small firm moves to promising technologies and market niches” by evaluating the dynamics and prospects for intervention. It develops a schematic map focusing on four key concepts: 1) vertical perspective; 2) competition; 3) coordination; and 4) leverage (ability to influence a large number of firms with minimal interventions).
- Methodology of Value Chain Promotion by the GTZ-funded ValueLinks program emphasizes combining value chain analysis with pro-poor approaches to development. This method comprises 12 modules according to the project cycle, each with tasks for business organizations and facilitators to perform.
- Chain-Wide Learning for Inclusive Agrifood Market Development published by the International Institute for Environment and Development (IIED) and the Regoverning Markets Program. The documents is a timely, sector-specific guide for the Agrifood industry to link small scale producers to modern food markets. The five-point approach uses the following: mapping the value chain, mapping key policies and institutions, established key drivers, trends and issues, and explores future scenarios and identifies options for better inclusion of small-scale producers.
- Using Value Chain Approaches in Agribusiness and Agriculture in Sub-Saharan Africa by JE Austin for the World Bank. This guide presents a range of concepts and tools with good, detailed case studies and examples to illustrate methodologies.
- A Guide for Value Chain Analysis and Upgrading by the ILO places emphasis on social development and ILO’s mandate to promote ‘decent work’ for workers and enterprises. The Guide focuses on upgrading the product, process, functions, markets and relationships.
- Chain Empowerment: Supporting African Farmers to Develop Markets The KIT manual (2006) discusses securing market access for smallholder farmers in Africa through upgrading, product development, establishing market linkages and building organizations and their capacity. It includes many different experiences from practitioners brought together in a six-day “writeshop” in which each participant brought a short paper they had prepared.
- Program Design for Value Chain Initiative by MEDA (Menonite Economic Development Associates), a development NGO. This guide places emphasis on poverty reduction through micro and small enterprises. At the heart of their “pro-poor” approach to value chain analysis and project design is market research and market development.
- Market Research for Value Chain Initiatives by Alexandra Miehlbradt and Linda Jones, MEDA, 2007. This toolkit is meant as a practical guide to conducting market research for value chain development programs. The toolkit focuses on the how-to of designing effective market research, choosing information collection tools, implementing those tools, and organizing the resulting information. It offers support to practitioners in the form of practical advice and worksheets that can be readily applied during market research.
- In-depth End Market Analysis and Bottom-up Business Environment Reform: This paper by DAI describes tools and examples to increase the rigor of two phases of the value chain approach: end market analysis and business environment analysis and reform. These in-depth tools assist practitioners and stakeholders in assessing and prioritizing upgrading needs and can be implemented alongside or independently of standard value chain analysis.
Value Chain Selection
For examples of value chain selection please click here.
Value Chain Analysis
For examples of value chain analysis please click here.
For tools and resources for analysis of supporting markets, please click here.
For tools and resources for information and communication technology, please click here.
For tools and resources for value chain finance, please click here.
Design and Implementation
Some important resources and case studies on best practices in implementation are provided here.
For impact assessment resources, please click here.
BizCLIR Methodology and Related Methodologies
Value chains are situated within a broader enabling environment for business and agribusiness, which consists of the many laws and regulations governing commerce and trade. The BizCLIR Tools provide a four-dimensional diagnostic system for identifying barriers that may affect businesses within a value chain. By looking at the laws, implementing institutions, supporting institutions, and social dynamics of more than a dozen aspects of the enabling environment, BizCLIR helps to pinpoint the targets for reform. GenderCLIR supplements the general approach by giving a deeper dive into the barriers affecting women. (For those working in the private provision of health products and services, there is also HealthCLIR. For finance as a stand-alone issue, it's possible to use Getting Credit, preferably coupled with GenderCLIR.)
- All BizCLIR Indicators (836 kb XLS)
- HealthCLIR Indicators 2010 (463 kb PDF)
- BizCLIR Indicators 2009 (1 MB PDF)
- BizCLIR Getting Credit Indicators (122 kb XLS)
- BizCLIR Gender Indicators (365 kb PDF)
- ↑ Local Enterprises In The Global Economy: Issues Of Governance And Upgrading, Schmitz, Hubert, Institute of Development Studies (2004).