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A Guide for Value Chain Analysis and Upgrading

Merten Sievers
Publication date: 
Monday, October 1, 2007

ILO Value Chain Analysis and Usage Guide

This guide gives examples and explanations for value chain concepts, as well as five modules that outline a project approach in a more practical way.

The guide introduces the concept of an "enterprise value chain" and the approach conceives of the business enabling environment as four levels: the enterprise level; institutions and organizations; policy and regulatory framework; and social perception of business. Another angle that this approach adds is “social upgrading” which is said to be the improvement not only of economic competitiveness but also labor conditions and “social dialogue.” There are three stages of social dialogue: exchange of information, consultation (or more in-depth dialogue) and negotiation to reach agreements. Stakeholder workshops foster social dialogue. LED toolkit by GTZ is mentioned as a tool for sector selection.

  • Module 1: Includes tools for “project setup” such as a checklist for identifying stakeholders; information on sequence, format, and expected result of stakeholder workshops.
  • Module 2: This module focuses on value chain analysis. It contains some checklists for information to collect during analysis, as well as information on “points of entry into value chain research.” The module includes guidance for mapping various aspects and levels of detail in the value chain. One that differs from USAID’s approach is mapping the influence of intermediary organizations at different points in the value chain. The module includes information about identifying leverages points where pressure can be applied to effect change.
  • Module 3: This module focuses on upgrading strategies and provides guidance for conducting stakeholder upgrading workshop with the desired outcome of an activity plan for upgrading. Tool: Template for action plan. A list of tools for upgrading support is also included. The module also addresses supply chain codes of conduct and socially sensitive restructuring, concerns that are particular to the ILO’s focus on “Decent Work.”
  • Module 4: Deals with implementation and monitoring. Tool: Template for monitoring and rapid impact assessment.
  • Module 5: Impact assessment and strategy revision.

There is a list of tools and resources at the end of this document—most are papers and guides dealing with employment policy and development. Some that could be useful deal with rural accessibility, youth employment toolkit, community-based training for rural economic empowerment, a training program on creating an enabling environment for small enterprise development, an assessment guide for assessing the influence of the business environment on small enterprise development, LED training and operational guides, tools to rebuild conflict-affected communities and others.