Value Chain and Market System Development
Inclusive market system development is increasingly recognized as a potential means for achieving sustainable impact at scale. Building on value chain development methodology, an inclusive market system development approach focuses on building the capacity and resilience of local systems, leveraging the incentives and resources of the private sector, ensuring the beneficial inclusion of the very poor, and stimulating change and innovation that continues to grow beyond the life of the project.
Specifically, the objective of inclusive market system development is to catalyze a process that results in a market system that is
- competitive—system actors are able to effectively innovate, upgrade, and add value to their products and services to match market demand and maintain or grow market share;
- inclusive—delivering a sustainable flow of benefits to a range of actors, including the poor and otherwise marginalized, as well as to society as a whole; and
- resilient—system actors are able to address, absorb and overcome shocks in the market, policy environment, resource base, or other aspect of the system.
Inclusive market systems development is an evolution in thinking around private sector development. It builds on previous work related to the identification of good practice in the delivery of goods and services through market actors1; and on the value chain approach.
Relation to Value Chain Framework
Since 2006, USAID, with ACDI/VOCA's and other implementers' support through the milestone Accelerated Microenterprise Advancement Project (AMAP), has promoted use of the value chain frameworki to encourage a market system approach to economic growth with poverty reduction. The value chain framework is an effective tool for communicating the roles and relationships of value chain actors in bringing a product or service from inception to end market consumers.
Learning over time has revealed the need for an expanded model that expresses the wider context in which value chains operate (see Figure 1 below). This wider context is essential because the goal of inclusive market development goes far beyond moving a product or service from inception through to end market consumers.
Rather, it aims to catalyze a process that results in a market system that is able to adapt as needed over time to deliver a sustained flow of benefits to system actors, including the poor and otherwise disadvantaged or excluded. The market systems framework therefore builds on—and is intended to complement rather than replace—the value chain framework.
iSee Kula, O., J. Downing & M. Field. (2006). Globalization and the Small Firm: A Value Chain Approach to Economic Growth and Poverty Reduction (USAID).
The Leveraging Economic Opportunities (LEO) project, which is led by ACDI/VOCA, aims to improve USAID programming by enabling the development of inclusive market systems. To support this process, LEO has developed a framework that defines market systems and provides general guidelines for interventions. Learn more about the inclusive market systems framework (PDF).
- Understanding inclusive market systems
- Value chain and market systems framework
- Value chain training
- Value chain publications
- Links to external resources
- Ethiopia – Agricultural Growth Program-Agribusiness and Market Development (AGP-AMDe)
- Ethiopia – Feed Enhancement for Ethiopian Development II (FEED II)
- Ghana – Agricultural Development and Value Chain Enhancement II (ADVANCE II) Project
- Global – Leveraging Economic Opportunities (LEO)
- Indonesia – Cocoa Innovations Project (CIP)
- Kenya – Resilience and Economic Growth in the Arid Lands–Accelerated Growth
- Mali – Mopti Coordinated Area Development Program (Mali III)
- Mali – USAID Cereal Value Chain (CVC) Project
- Mozambique – Livelihoods Empowerment and Development (LEAD)
- Tanzania – Tanzania Staples Value Chain (NAFAKA)
- Zambia – Production, Finance, and Improved Technology Plus (PROFIT+)
A Selection of Past Projects
- Bolivia – Onion Quality Improvement and Marketing Project
- East Africa – GBTI II Task Order - East Africa Value Chains Assessment Project
- Ecuador – Local Business Development Project
- Egypt – Agricultural Exports and Rural Incomes - Dairy and Livestock
- Egypt – Agricultural Exports and Rural Incomes - Horticulture
- Ethiopia – Agricultural Cooperatives in Ethiopia (ACE) Program
- Ethiopia – Pastoralist Livelihoods Initiative-Livestock Marketing (PLI-LM)
- Georgia – AgVANTAGE
- Global – Accelerated Microenterprise Advancement Project-Business Development Services Knowledge and Practice I (AMAP BDS K&P I)
- Global – Accelerated Microenterprise Advancement Project—Business Development Services Knowledge and Practice II (AMAP BDS K&P II)
- Global – Value Chain Development for Conflict-Affected Environments
- Haiti – Value Chain Analysis
- India – Growth-Oriented Microenterprise Development Program (GMED)
- India – Implementation Grant Proposal (IGP)
- India – Partnership for Innovation and Knowledge in Agriculture
- Indonesia – Agribusiness Marketing and Support Activity (AMARTA) II
- Kenya – Kenya Maize Development Program (KMDP)
- Kenya – Short-Term Technical Assistance
- Lebanon – Action for Sustainable Agro-Industry in Lebanon (ASAIL)
- Lebanon – Lebanon Business Linkages Initiative
- Mali – Agriculture Development Systems Activity (ADSA)
- Mali – Integrated Initiatives for Economic Growth in Mali (IICEM)
- Moldova & Ukraine – RAISE PLUS Agricultural Policy, Legal and Regulatory Reform Project
- Paraguay – Productivo
- Philippines – Enhanced and Rapid Improvement of Community Health (EnRICH)
- Philippines – SUCCESS Alliance Phase II
- Sudan – Agricultural Markets and Enterprise Development (AMED)
- Tanzania – Smallholder Horticulture Outgrower Promotion (SHOP)
- Tanzania – Sustainable Environmental Management through Mariculture Activities (SEMMA)