Synthesis Documents

Implementation Best Practices for Value Chain Development Projects, USAID, 2010

    This report written by Ruth Campbell (ACDI-VOCA) for USAID compiles implementation best practices for value chain develompment projects with the aim to update the DCED's 2001 BDS Guidelines in the light of recent developments and approaches.

    Summary of results
    1. Interventions must be market driven
    • Use proven market research tools to conduct in-depth end-market analysis.
    • Use quantitative and qualitative information to understand opportunities in various market channels as well as the constraints to exploiting those challenges.
    • Segment the market: Analyze each of the potential end markets to understand the requirements, risks and expected benefits of competing in each of them.
    • Include value chain stakeholders in the analytical process to the extent possible.
    • Help value chain stakeholders to respond to and anticipate market trends.
    • Communicate the results of the analysis to industry stakeholders to help them select multiple poten-tially profitable markets.
    • Base the project’s design and interventions on up-to-date market analysis.
    • Use an incremental approach where there is resistance to change and/or low levels of capacity.
    • Understand that value chain actors are not only market driven.

    2. Implementers need flexibility to be able to respond to dynamic markets and contexts.
    • Use value chain analysis to co-develop with industry stakeholders a vision (or multiple visions) of a more competitive industry.
    • Work with firms and groups of firms to develop roadmaps for achieving competitiveness.
    • Continually monitor responses to project interventions and adjust interventions accordingly.
    • From donors, implementers need flexibility to change course during value chain development projects.
    • Donors and implementers need to be willing to take risk and acknowledge failure.

    3. Implementers should facilitate—rather than drive or replace—the actions of stakeholders.
    • Facilitate the delivery of goods and services by market actors rather than directly providing them, whenever possible.
    • Design interventions to create a permanent shift in the behavior of a large number of firms.
    Build local capacity to respond to dynamic markets.
    • Use incentives to catalyze broader change without negatively distorting markets.
    • Maintain a low profile to avoid creating dependency on project support.
    • Sacrifice short-term results for long-term sustainable results.

    4. Implementers should catalyze behavior change.
    • Identify models of competitive behavior to stimulate stakeholder interest.
    • Use participatory tools to allow stakeholders to identify the incentives that drive observed behavior.
    • Design interventions that leverage incentives for behaviors that support value chain competitiveness.
    • Identify and engage change agents.
    • Consider using a self-selection process for project partners.

    5. Facilitation must be taken to scale.
    • Help stakeholders make behavior that increases competitiveness the industry norm.
    • Help stakeholders understand that competitive behaviors are essential to their success.
    • Start small and create momentum.
    • Leverage and protect early adopters.
    • Do not rely exclusively on replication as a scaling-up strategy.