FIAS VCA

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Moving Toward Competitiveness: A Value Chain Approach (FIAS 2007)

This manual^[1] provides insights and instruction on the applications of the value chain approach to the policy, institutional and infrastructural issues of developing countries. It provides tools for analyzing the business environment constraints at the economy and industry levels and identifies a minimal set of quantitative indicators. It provides a quantitative basis to prioritize and support recommendations for policy and programs targeting their implementation. The approach differs from USAID’s value chain approach in that it places equal importance on policy issues as it does on market failures.

The analytical framework is organized around three types of activities: source (input activities), make (production) and deliver (transfer of goods from one stage to another). All three can occur among each value-adding stage of the process (for example, cattle to leather). Quantification of monetary value is undertaken along the source-make-deliver process for each step. The results are further analyzed to produce measurements of value added and productivity. Items on which data should be collected are included, as well as details on who to interview and useful formulas for generating the data. Guidelines on how to meaningfully interpret cost, time, value added and productivity data are included. Among the annexes, two useful ones are a sample business sourcing survey and “Industry Competitiveness Indicators for Value Chain Analysis and Solution Design.”

The approach to sector selection is slightly different, focusing more on the sector’s relevance to the overall country strategy, its potential for attracting investment and its broader policy relevance. Market analysis looks at market trends, niche possibilities, market channels, end markets, and policy. Includes a set of sample questions for buyers.

The manual also addresses benchmarking, focusing on overcoming the common constraint of the lack of consistent, good-quality data for comparison. It does this by establishing a consistent approach for the analytic framework and metrics and identifying a pre-defined set of indicators. The guide is a good source of information on measuring constraints in utilities, administrative costs, trade logistics and transport.

Notes

1. ↑ Moving Toward Competitiveness: A Value Chain Approach, by FIAS 2007

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