Synthesis Documents

Lessons Learned on MSE Upgrading in Value Chains, ACDI/VOCA USAID AMAP 2007 (English/French)

    For what's new visitors: A new brief produced in 2007 is posted on the right hand side which summarizes MSE upgrading and findings from the reserach and offers recommendations for practitioners to promote MSE updgrading.

    Upgrading involves a learning process through which those who run enterprises acquire new knowledge, often through relationships with other firms in the value chain or with firms in supporting markets. Firm owners then translate this knowledge into innovations that increase value added. This paper, written by ACDI/VOCA under AMAP BDS, examines how micro and small enterprise (MSE) owners respond to the benefits, costs and risks associated with upgrading opportunities. The conditions that promote upgrading opportunities, and MSE owners' responses to these opportunities, are all interpreted within the context of the value chains in which the firms operate. The paper draws on data provided by project documents and reports associated with nine value chains. The value chains were selected because of their relationship to USAID's AMAP and because they represent a variety of sectors in different locations.

    Summary of results
    The comparison of upgrading information across these three handicrafts-related value chains and six agriculture-related value chains resulted in several types of findings, including generalizations about the primary impetus behind each of four types of upgrading. Many of the findings highlight the importance of linkages between firms, especially vertical relationships between MSEs and lead firms, and the positive role played by learning opportunities and strong information flows.

    A summary of recommendations for practitioners:
    - Improve transmission of market information and price signals to MSEs.
    - Increase the bargaining power of MSEs.
    - Promote effective collaboration between MSEs.
    - Develop financial markets for MSE investment capital.
    - Identify socio-cultural limitations to upgrading.
    - Reduce MSE owners' isolation.
    - Resist the urge to herd all MSEs into one market channel.

    Associated Activities and Documents
    Synthesis Documents
    »USAID Accelerated Microenterprise Advancement Project (AMAP) BDS 2003-2007