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GVC analysis elements of successful Global Value Chain (GVC) engagement
Resource material prepared for a Training of Trainers Advanced Workshop to enhance Pro-poor Policy Formulation and Implementation at Country Level (GCP/RAS/276 & TCP/RAS/3405 )30th May - 3rd June 2016, Hanoi, Vietnam.
Global Value Chains Analysis• Analysis of trade in value added terms
▫Importance of trade in intermediate inputs (both goods and services) in improving a country’s competitiveness
• Informs the relationship between trade growth and jobs, investment and overall economic growth▫Related to the calculation of national accounts and
the measures of socio-economic development.• Informs how globalization influences national and
regional development
WTO (2015), International Trade Statistics
GVC Analysis•Understanding the entire input-output
process that brings a product or service from initial conception to the consumer’s hand▫input-output structure involves both goods and
services, as well as a range of supporting industries
•Map the value added at different stages in the chain and assess important aspects such as:▫jobs, wages, gender, and the nature of firms
participating at diverse stages of the chain.
WTO (2015), International Trade Statistics
What has enabled this success?•Structural changes in the global economy
▫Distributed production capacity▫Global flows in investment capital,
technology, knowledge and skills▫Development in infrastructure, including
Information and Communication Technology, Aviation, Marine Transportation, storage, etc.
▫Rising levels of income, knowledge and changes in preferences
Why we need to do GVC Analysis?
Understand trends and drivers• Study the evolution of the industry, the trends that
have shaped it, and its organization▫Strengths, weaknesses, opportunities and threats▫Barriers to efficient organization
• Study firm dynamics and structure▫The composition of business (size, number, ownership
structure)▫What is the geographical focus – local, regional,
national, global?▫What changes make them more responsive?▫What are their risks and vulnerabilities?
Global Food Value Chain complexity•Agribusiness value chain is defined by
UNCTAD as:▫ “the suppliers of inputs (seeds, chemicals and
machinery), farmers and other agricultural producers and service providers, processors of agricultural goods (such as manufacturers of foods and beverages), trading companies dealing with agricultural commodities, and retailers (such as supermarket chains).”
(UNCTAD, 2013)
Divers of change in GVC scope
Gereffi and Fernandez_Stark, 2011)
International markets
National markets
Environmental
Naturalelements
Sustainability
Societal
Socio-culturalelements
Organizationalelements
Institutionalelements
Infrastructuralelements
Serviceprovision
Inputprovision
Finance
Distribution
Processing
Aggregation
Production
Economic
Go
ve
rn
an
ce
Core value chain
Extended value chain
National enabling environment
Global enabling environment
SFVCAnalytical framework
Points to remember•Two key challenges in SFVC development…
▫Understand the sources, key leverage points and approaches that will maximize value impact
▫How to facilitate VC activities by bringing together the capacities of the public sector, the private sector, and civil society into an effective partnership
▫SFVC development is guided by performance measures that reflect contribution to well-being – economic, environmental and social
10 principles in SFVC development
1. Economicallysustainable(profitable)
4. Dynamicsystemsbased
5. Governance-centered
6. End-marketdriven
2. Sociallysustainable(inclusive)
3 .Environmentallysustainable(green)
7. Vision/strategydriven
8. UpgradingFocused
9. Scalable
10. Multilateral
Conclusion• Sustainable food value chain development, VC
Analysis:▫ Help assess broad-based impacts on poverty
reduction in agriculture in the context of globalization
▫ Offers a systematic approach to measuring, analyzing and planning to improving performance to facilitate GVC engagement
• Value chain mapping and policy analysis are two powerful tools for in-depth Global Value Chain Analysis.
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