By Jochem Schneemann
In value chain promotion one of the crucial and usually initial actions is assessing a wide diversity of potential sectors or value chains. The assessment will reveal the most suitable value chain(s) for the project intervention according to specific development goals and project mandates. This is an essential step, as it determines the objectives that can be achieved and the potential for success.
Current value chain assessment methods and instruments mostly focus on economic aspects without taking into account environmental and/or social dimensions. No comprehensive and systematic tool exists that takes into account the different economic, social and environmental considerations and that also is ‘simple and concrete’ for application in the field.
In 2013 GIZ’s Sector Project ‘Innovative Approaches of Private Sector Development’ (SV PWF), funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), decided to develop transparent and user-friendly methodological guidelines for hands-on value chain assessment that indeed do take into account the economic, social and environmental dimensions simultaneously, and that also fulfill GIZ’s demand of high standard, holistic analyses and effective interventions. GIZ selected Fair & Sustainable Advisory Services (FSAS – the Netherlands) and Innovision Consulting (Bangladesh) to develop and pilot-test these guidelines.
FSAS and Innovision developed methodological Guidelines and a quantitative matrix tool using e.g. a hot-spot analysis for the environmental aspects (the GIZ’s adapted version of Wuppertal Institute’s original tool) and the FSAS’ gender and youth scoring matrix for social issues. These guidelines and tools were used in GIZ’s Private Sector Development Programme in Yemen in two value chains (institutional furniture, waste recycling/composting). The test took place in November 2013 and the Guidelines were finalized in early 2014.
GIZ concluded that the Guidelines provide both a comprehensive and a practical tool for field staff but also recognized that the draft guidelines were based on the example of one country case only and were not sufficiently discussed with, or applied in, other projects in the field. Therefore GIZ in 2014 decided to look for further inputs and feedback on the Guidelines so that the Guidelines could be finalized, further applied and disseminated.
At the same time ILO’s Small and Medium Enterprises unit is in the process of reviewing its Guide Value Chain Development for Decent Work and therefore GIZ and ILO’s Small and Medium Enterprises unit, both members of the Donor Committee for Enterprise Development (DCED), decided to cooperate in this process, aiming at sharing experiences and results and potentially developing a joint final tool on VC selection.
We are proud that GIZ and ILO selected FSAS to carry out this assignment, which consists of collecting further feedback on the Guidelines, and collecting best practices and lessons learned through a documentary review and through interviews with GIZ and ILO field staff.
The interviews have provided a good indication of the needs of practitioners and their expectations of value chain selection guidelines and tools. There is a need for guidelines and tools, which are adjustable to the project’s needs. One respondent said: “For us the most important is that the guidelines provide advice about the process: how to select the right players to talk with, how to find the right data, how to interpret the opinion and inputs of stakeholders. That is more important than the technique of setting criteria, scoring and weighing”.
The process will finalize in May 2015 and will include a workshop to validate the revised Guidelines with practitioners and experts.
For questions or more information about this project you can contact: Jochem.Schneemann@fairandsustainable.nl