Feed the Future
This project is part of the U.S. Government's global hunger and food security initiative.

3.3.2. Upgrading Plan

The industry upgrading plan follows the development of a common vision by industry actors. It addresses what needs to be done to achieve the vision for competitiveness, particularly through fostering investments and sharing information. Competitiveness strategy designers must work closely with a range of private-sector stakeholders to review the opportunities and constraints they jointly identified and prioritized during the value chain analysis and facilitate the preparation of a plan that describes how to take advantage of the best options and resolve related problems to enhance industry competitiveness. The designers should support initiatives that:

  • Promote investment to relieve constraints and open up opportunities;
  • Foster learning among firms that increase their willingness to take on new risks and adopt innovations. Illustrative examples include 1) the facilitation of meetings that provide firms an opportunity to meet in a "neutral" space and 2) risk-sharing between buyers and suppliers through appropriately constructed contracts;
  • Require small steps with manageable risk such as grading and selling product to a range of buyers with different requirements to diversify income streams and ensure a more secure and stable livelihood; and
  • Offer benefits in the near term to maintain stakeholder commitment. Convincing beach front hotels to work together to clear the shore of noxious refuse soon resulted in noticeably cleaner beaches, an increase in the number of tourists and collaboration by chain actors on efforts to overcome other constraints to the area's tourism industry.

While firm-level upgrading emphasizes the ability of individual firms to adapt to changing market conditions, value chain upgrading must include interventions that affect the behavior of the entire industry by demonstrating a deep understanding of industry governance, how relationships between actors in the chain are structured, and knowing which players have the capacity to generate change. Designers need to identify:

  • influential actors along the chain—a village chief, successful importer, lead farmer or other prominent player; and
  • aggregation points where interventions can lead to systemic change, for example a bank that furnishes most of the agriculture sector’s financing or a processing firm that buys from large numbers of producers.

In addition, designers and implementers should avoid enterprise-level interventions unless a particular firm or group of firms has the potential to stimulate change throughout the value chain. In such a situation, the goal still should be to improve the competitiveness of the entire industry and to ensure that benefits reach MSEs.