VALUE CHAIN DEVELOPMENT Training activities & Tools

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1 VALUE CHAIN DEVELOPMENT Training activities & Tools

2 VALUE CHAIN DEVELOPMENT Overview The question is thus not if, but how to integrate in value chains in a way that allows for incorporation of a growing number of the workforce and increasing levels of productivity and incomes. (Altenburg, 2007) Value Chains describe how value is created from the conception of a product to its final consumption, concluding the different stages of input supply, design, production, distribution, retailing and support services. Value Chain Development (VCD) focuses on analysing these chains, identifying key weaknesses and bottlenecks and contributing to their further development and improvement. Value chain development is an increasingly popular approach to develop inclusive markets. By improving the access of the poor to markets, facilitating a better functioning of markets and by promoting the flow of knowledge and resources along value chains to small enterprises and poor producers, value chain interventions can enable the working poor to benefit more from market development and take advantage of some of the opportunities offered by domestic and global markets. Through value chain development programs, practitioners empower small businesses to sell to more stable, higher volume or higher value markets. This occurs by linking sustainable enterprises with the range of businesses in the value chain and with support service providers and other stakeholders to increase the competitiveness of the industry and increase the benefits for low-income sustainable enterprises. What is a value chain? A value chain describes the full range of activities that are required to bring a product or service from conception, through the intermediary phases of production [...], delivery to final consumers, and final disposal after use. This includes design, production, marketing, distribution and support services leading up to consumption (and often beyond, when recycling processes are considered). These activities can be contained within a single firm or divided among different firms, as well as within a single geographical location or spread over wider areas. The term value chain refers to the fact that value is added to preliminary products through combination with other resources (for example tools, manpower, knowledge and skills, other raw materials or preliminary products).as the product passes through the stages of the value chain, its value increases. Source: ILO: Value Chain Development for Decent Work: A Guide for Practitioners, Government and Private Sector Initiatives (Geneva: 2009)

3 Facts and figures Value chains can be local, national or global, linking rural producers with traders and consumers worldwide. They can, for instance, link rural areas with big retailers or supermarket chains in major cities as well as export markets. Power relations in value chains play a crucial role. Markets dominated by very powerful players can be detrimental to small producers and decrease the income they receive for their produce. The improvement of value chain competitiveness is recognized as a powerful approach for generating growth and reducing poverty in developing countries, where 75 percent of the population live in rural areas. Global market trends and niche value chains in, for instance, organic agriculture and fair trade, can offer additional opportunities to rural producers. Women often face disadvantages in terms of mobility, access to inputs, productive resources, and market information and are thus particularly challenged to access and maintain profitable market niches and economic gains in value chains. The International Labour Organization (ILO) aims at addressing systems and institutions that can drive competitiveness and job creation in specific sectors by using a market development approach. ILO s interventions build on private sector development strategies that seek to strengthen enterprises, business relationships & services, market structures, and the business environment so that they channel more benefits to the poor and create more and better jobs effectively. The International Training Centre of the ILO has developed a solid capacity building and training program on designing and executing Value Chain Development projects and interventions for international and national organizations. The Centre s Value Chain Development methodologies are state of the art tools for job creation

4 ENTERPRISE DEVELOPMENT THROUGH VALUE CHAINS AND BUSINESS SERVICE MARKETS A Market development approach to pro-poor growth The course is highly relevant for professionals developing and implementing Value Chain and enterprise development projects in rural and urban areas. It offers a unique on-the-job learning opportunity using practical tools and lessons from enterprise development programs that have reached thousands of small enterprises in rural and urban areas. Participants select a work challenge as an assignment during the course and get support from international experts that act as on-line tutors. The final output of the course is a Market Development Implementation Project designed by the participant. A mid-course optional one or two weeks face-to-face workshop enable participants to meet and strengthen networks among them and the international trainers, better adapt the learning to their target group and get an update on latest developments. Title: Enterprise Development through Value Chains and Business Service Markets Modality: Distance + optional 2 weeks Face - to - Face Target: The course is highly relevant for professionals conducting small enterprise development through value chains and business development service markets. It is targeted to professionals working in the following fields of practice: Micro, Small and Medium Enterprise development; Inclusive Markets development; Private Sector Development; Agricultural development; Local Economic Development; Livelihood security; Employment and Microfinance. Length: 8 month distance learning (March to November). Designed to be combined with the professional job Assistance: On line tutors Output: a Market Development Implementation Project designed by the participant based on the project he/she is currently working on in real life. Contacts:

5 The four distance learning modules are interrelated as follows: MODULE 1 - Introduction to Value Chain and Business Service Market development. MODULE 2 - Market Assessment, Monitoring and Evaluation: The course addresses the latest Donor Committee for Enterprise Development (DCED) results measurement framework. MODULE 3 - The Program Design Cycle: A Guide to (Re-) Designing Market Development Initiatives. MODULE 4 - Implementing Market Development Programs.

6 TAILOR MADE COURSE ON VALUE CHAIN DEVELOPMENT Reaching scale, fostering sustainability and promoting equity This course is an introduction to VCD and offers a balance of fundamental frameworks and principles, as well as some practical skills for the design and implementation of VCD initiatives mainstreaming gender. The course is organized using a modular approach meaning it can be customized to cater participant s needs. Some typical adaptations we can provide are: Adaptation to the local environment, the economic sector and participant s profile. Selection of training methodologies: analysis of case studies, role plays, space for experiences exchanges; learner centred dynamic activities and study visits. Focus in enhancing the projects and programmes the participants are working on in real life Analysis of best practises on employment intensive case studies promoting decent work and improved working conditions. Electives can be chosen among: ICT - Information Communication and Technology Communication in VCD COURSE CONTENT Monday Tuesday Wednesday Thursday Friday Session 1: Opening Session 5: Market Opportunity & VCD Strategy Session 8: Intervention Selection & Design Elective Elective Coffee break Session 2: Introduction to Value Chain Development Session 6: Value Chain Analysis Strengths and Constraints Session 9: Planning and Managing VCD Programs Elective Action Planning Lunch Break Session 3: VCD Process Session 6, Continued: Value Chain Analysis Strengths and Constraints Session 10: Market Entry & Pilots Elective Coffee Break Session 4: Value Chain Selection Session 7: Sustainable Solutions Session 11: Market Up-take & Exit Elective

7 Gender in VCD Partnerships and Business Linkages Market Assessment Results Measurements with DCED Standards Value Chain Finance By the end of the course, participants will: be able to understand the principles of Value Chain Development for decent work reaching scale and inclusiveness; be able to share knowledge with partners and stakeholders about Value Chain Development principles and applications; have had the opportunity to exchange experiences with Value Chain Development practitioners and will be part of a peer network; be able to contribute to the design and implementation of market driven value chain development projects using a participatory approach. ILO ITC course on VCD distinguishes from other courses by: Promoting enterprise development and competitiveness not as a goal in itself but as a mean to create decent work and equal opportunities for women and men. Seeking to understand local, national and international value chains that have the biggest chances of either increasing employment and/or improving working conditions. Promoting decent work through fundamental principles and rights at work, employment promotion, social protection and social dialogue. Focusing on job creation and job quality improvement Bringing together the core public and private stakeholders in Value Chains. The tools seek to strengthen - enterprises, business relationships, market structures, and the business environment. Title: Tailor Made Course on Value Chain Development Modality: face - to -face Target: The course is highly relevant for professionals conducting small enterprise development through value chains and business development service markets. It is targeted to professionals working in the following fields of practice: Micro, Small and Medium Enterprise development; Value Chain Finance; Inclusive Markets development; Private Sector Development; Agricultural development; Local Economic Development; Livelihood security; Employment and Microfinance. Length: One week Options: The organizers can choose electives (Gender in VCD, Communication in VCD, Partnerships and Business Linkages, ICT, Market Assessment, Results Measurements with DCED Standards or Value Chain Finance) Contacts:

8 TAILOR MADE COURSE ON VALUE CHAIN FINANCE This training aims to enhance understanding, drive, and skills of practitioners to offer value chain finance (VCF) methodologies effectives enough in helping financial institutions and value chain markets to expand in ways they generate improved income and employment opportunities for people living near or under the poverty line. By the end of the course, participants will:: Understand and be able to explain to others how value chain finance can represent an important business opportunity for different actors in the value chain and specifically for Banks and MFIs, and how it can have a significant impact on economic development, poverty and gender equity Be able to identify common opportunities and risks to VCF, including opportunities to increase inclusion of women and other currently excluded groups. Be familiar with tools to analyse financial flows in a value chain to better understand unmet demand for finance in a particular value chain Use diagramming tools to understand viable value chain financial service packages and business models. Day 1 Day 2 Day 3 Day 4 Day 5 Overview to enterprise development through Value Chains and BDS Introduction to Value Chain Finance The Value Chain Development Process Value Chain selection Competitiveness and Upgrading Strategies Value Chain Analysis: Strengths & Constraints / Mapping Analyzing the Market for Value Chain Finance Sustainable Solutions Value Chain Finance Solutions Intervention Selection & Design, Planning & Management Market Facilitation Market Entry & Piloting Market Up-Take and Exit Scale-up and Sustainability Optional Modules Study Visits Action plans

9 METHODOLOGY An action-oriented, participative approach will be adopted throughout the workshop. Emphasis will be placed on sharing experiences and best practices - in the search for innovative and practical solutions to problems and challenges, and how the value chain finance approach can contribute to problem solving. Title: Tailor Made Course on Value Chain Finance Modality: face - to - face Target: The course is highly relevant for professionals conducting small enterprise development through value chains and business development service markets. It is targeted to professionals working in the following fields of practice: Micro, Small and Medium Enterprise development; Value Chain Finance; Inclusive Markets development; Private Sector Development; Agricultural development; Local Economic Development; Livelihood security; Employment and Microfinance. Length: One week Contacts: OUR EXPERIENCE In the last years, the ITC-ILO has implemented more than 20 courses either at the Turin Centre, Italy and in the field (Africa, Asia, Latin America and Europe) in partnership with ILO HQ and Regional Offices. Training more than 750 practitioners from the private sector, development agencies, UN agencies, researchers and training institutes, microfinance and commercial banks, chambers of commerce and government officials.

10 TOOLS VALUE CHAIN DEVELOPMENT FOR DECENT WORK GUIDE The Value Chain Development Guide addresses the underlying causes of failures in the performance of market systems, rather than looking at symptoms in individual chains. It has a unique focus on how to achieve Decent Work. The essential question it addresses is: how can we achieve competitiveness while creating new jobs and income opportunities for men and women and promoting better working standards in value chains? The guide is intended for Value Chain Analysis and Development practitioners that need to understand the nature of relationships between businesses and other actors in the chain; that need to understand the role of specific market functions and (formal and informal) rules that govern the value chain; and be able to identify incentives and capacities of market players in order to facilitate Value Chain Development. It takes an action research approach, whereby value chain mapping and research can already contribute to mobilizing stakeholders and seeking solutions on a participatory basis. The guide takes the reader through Value Chain selection, initial research, VC mapping and into analysis, interventions design and M&E questions. It builds on project experiences of the ILO in Sri Lanka, Madagascar and Zambia and is currently being used by practitioners for project design in Africa, Latin America and Asia.

11 MAKING THE STRONGEST LINKS A practical guide to mainstream gender analysis in value Chain development Most current value chain development has failed to integrate gender analysis despite gender mainstreaming policies of donor agencies and the commitments of the governments involved. This guide provides: A framework and methodology for Gender Equitable Value Chain Action Learning and builds sustainable capacity and networks for Value Chain Development. Practical examples gender Good Practice in different types of VCD processes from private sector development processes to more participatory processes focusing on women s empowerment. A core checklist for gender analysis for VCD, based on internationally accepted gender mainstreaming principles. Diagram tools which can be used in VCDs of all types and at all levels (policy makers to women who cannot read and write) for planning, complex analysis and research and monitoring and evaluation. This is not a how to Guide to value chain analysis and development but it shows how gender concerns should be incorporated into value chain development. The guide is intended for VCA and/or gender consultants, researchers and policy-makers involved in VCD who wish (i) to make their work more inclusive, (ii) to ensure that their recommendations empower women, maximising the contribution to employment creation, economic growth and poverty reduction, and (iii) to acquire the tools for promoting gender awareness.

12 The ILO Turin Centre s facilities Located in an attractive park on the banks of the River Po, the Centre s campus provides a congenial environment in which to live and study. It contains 21 pavilions with fully equipped modern classrooms, conference halls and meeting rooms fitted out for multilingual simultaneous interpretation, and a computerized documentation centre linked to various data banks. The campus has 287 study/bedrooms, all with private bathroom, telephone, free access to internet and cable television. It also has: a reception desk open 24 hours a day a restaurant, a self-service canteen and a coffee lounge, all catering for international dietary needs a bank a travel agency a laundry service a post office two gyms facilities for outdoor sports (football and tennis) a medical service Social events are regularly held both on and off campus, so that participants from different cultural backgrounds can make the most of a stimulating international environment. For further information, please contact International Training Centre of the ILO Enterprise, Microfinance and Local Development Programme (EMLD) Viale Maestri del Lavoro, Turin - Italy Design: Luca FIore - Printed by the International Training Centre of the ILO, Turin, Italy Made of paper awarded the European Union Eco-label, reg.nr FR/011/002, supplied by International Paper.

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