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The Value Chain Approach
Set of principles and tools designed to drive economic growth that reduces povertythrough the integration of large numbers of
small enterprises and farmersinto increasingly competitive value chains
The Value Chain Approach
Global Enabling Environment
National Enabling Environment
Financial (cross cutting)
Input Suppliers
Sector specific providers
Cross-cutting providers
Producers
WholesalersExporters
National Retailers
Processors/Traders
Global Retailers
Selecting “Pro-Poor” Industries
• Competitiveness for sustainability
• Breadth and depth of impact
• Strong employment potential
• Committed industry leadership
Global Enabling Environment
National Enabling Environment
Financial (cross cutting)
Input Suppliers
Sector specific providers
Cross-cutting providers
Producers
WholesalersExporters
National Retailers
Processors/Traders
Global Retailers
Facilitating Systemic Change
Public sector
Private sector
Facilitating Systemic Change
Donor-funded
programs
Community
Private-sector
relationships
Facilitating Systemic Change
Very poor
Poor but entrepreneurial
Emerging commercial
Support to access
services
Support to foster
industry growth
Private-sector
relationships
Relationships and Incentives
• Who do enterprises relate to?
• How do they relate?
• Why do enterprises act the way they do?
Economic Socio-politicalBehavior
Stimulating Behavior Change
• How can we catalyze incentives?
• How can we reduce risk to stimulate behavior change?
community-wide behavior change
Fostering CompetitivenessNon-
Competitive
Competitive
FewShort-termWin-lose
ManyLong-term
Win-win
Relationships Learning Benefits
HesitantZero-sumPolitical
InvestTest
Innovate
For fewEconomicv. social
Mutuallyreinforcing
Broad
Impact on PoorIncreasingly competitive value chains: • Create sustainable employment at multiple levels• Incorporate small-scale producers• Promote positive economic behavior• Build demand for basic public and private
services• Establish path for the poor to emerge out of
poverty
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