User:Esskay79

Value Chains in Development

Building on market opportunities and on analyses of constraints at the enterprise, sub-sector and policy levels, and the Value Chain (VC) approach provides a systemic view of economic development. Organizations operating in various capacities find the application of ‘value-chain’ concepts useful for enhancing their competitiveness, especially in the light of the opportunities and threats arising from globalisation. Governments and donors are finding the VC approach valuable in view of the potential to foster broad based economic growth

VC promotion strategies borrow instruments from a wide range of concepts, including market development, arrangements for service provision, Public Private Partnerships and the improvement of the regulatory environment – among others. Such an approach will attend to the potentials of sub-sector analysis that can be important for developing economies.

Development organizations applies value chain concept to design strategically sound intervention in a participatory way with the intention of achieving a ripple effect which can enhance competitiveness for the input supplier, who is in general cases are the rural farmer. Some development agencies like the German Technical Cooperation have developed comprehensive value chains in various sectors targeting market promotion.

VC map is used as a blueprint to consensually identify key constraints within the chain. While analyzing the constraints, first comprehensive value chain maps are drawn together with the key industry stakeholders. The map itself gives only a snap shot view of the different functions, chain operators, the relationship and the overview of the important meso level stakeholders in that particular subsector. Next stage is analyzing the VC maps. VC maps are looked into from several perspectives in order to have a better understanding of the nature of the constraints and their relationship with the nonfunctioning or the poor functioning of the subsector. The idea is to identify the critical bottlenecks and start intervening through them first. VC gives an opportunity to examine the non critical or less important bottlenecks too as such bottlenecks in future may turn into critical constraints. Analytical aspects resulting out of the analysis may relate to the employment, stage wise value addition, income distribution, bargaining power of each chain player, benchmarking with the best firm (usually the one which is most vertically integrated or the lead actor) and also the practices in the similar other industries.

The constraints can be furthermore analyzed from the functional aspects such as primary input level, primary processing level, secondary processing level or the distribution and marketing level. The outcome of such an analysis is discussed with the key stakeholders in a strategy focused workshop. Such an analysis can become the basis for developing the vision and strategy of a subsector and it can become a key to enhance the stakeholders’ ownership making implementation and facilitation easier.–Esskay79 09:32, 8 August 2007 (UTC)