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 Value Chain Analysis forPolicy-Makers and Practitioners
Hubert SchmitzInstitute of Development StudiesUniversity of SussexEngland
 
 
Copyright © International Labour Organization 2005
 
First publication, 2005Publications of the International Labour Office enjoy copyright under Protocol 2 of the UniversalCopyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization,on condition that the source is indicated. For rights of reproduction or translation, application should bemade to the ILO Publications Bureau (Rights and Permissions), International Labour Office, CH-1211Geneva 22, Switzerland. The International Labour Office welcomes such applications.Libraries, institutions and other users registered in the United Kingdom with the Copyright LicensingAgency, 90 Tottenham Court Road, London WIP 9HE (Fax: +44 171436 3986), in the United States withthe Copyright Clearance Centre, 222 Rosewood Drive, Danvers, MA 01923 (Fax: +1 508 750 4470), or inother countries with associated Reproduction Rights Organizations, may make photocopies in accordancewith the licences issued to them for this purpose.
 Hubert SchmitzValue Chain Analysis for Policy-Makers and Practitioners
Geneva, International Labour Office, 2005ISBN 92-2-117738-6The designations employed in ILO publications, which are in conformity with United Nations practice,and the presentation of material therein do not imply the expression of any opinion whatsoever on the partof the International Labour Office concerning the legal status of any country, area or territory or of itsauthorities, or concerning the delimitation of its frontiers.The responsibility for opinions expressed in signed articles, studies and other contributions rests solelywith their authors, and publication does not constitute an endorsement by the International Labour Officeof the opinions expressed in them.Reference to names of firms and commercial products and processes does not imply their endorsement bythe International Labour Office, and any failure to mention a particular firm, commercial product orprocess is not a sign of disapproval.ILO publications can be obtained through major booksellers or ILO local offices in many countries, ordirect from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. Cataloguesor lists of new publications are available free of charge from the above address.Photocomposed by the International Labour Office, Geneva, SwitzerlandPrinted in SwitzerlandGEN
 
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Foreword
The process of globalization has brought far-reaching impactson the structure and sourcing of production, as well as thenature of market opportunities and competitive pressures forproducers, around the world. Global buyers, who weaveinternational networks for the sourcing, production, distributionand sale of goods and services, have received particularattention as they are, perhaps, the most apparent manifestationof what true global production systems involve. Receiving lessmedia attention, but of equal importance, are the changes inproduction and sourcing behaviour of regional, national andeven local producers, which is where the vast majority of theglobal workforce is to be found.From the perspective of the ILO’s Enterprise DevelopmentProgramme, the promotion of decent work in enterprises is akey concern. To reach this goal, it is necessary to support thedevelopment of competitive enterprises whose investments inpeople, know-how, processes, equipment and good conditionsof work are integral elements of an upgrading strategy – thisapproach forms the basis for achieving decent work and long-term competitive advantage.The ILO and other development agencies recognise thatupgrading along these lines cannot be done on an individualenterprise basis, but rather, requires a systemic view thatapplies methodologies based upon approaches such as valuechain analysis and clustering. Value chain analysis (VCA) hasbecome an increasingly useful approach to gain acomprehensive view of the various inter-locking stages involvedfrom taking a good or service from the raw material toproduction and then to the consumer. Many interesting sectoral-specific examples of such a VCA tool have also flourished inrecent years. However, a gap was identified where the insightsof VCA could provide useful information for policymakers, atnational and local levels, who must take important economicand social decisions, especially in countries who are trying toupgrade their industries.
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