I would be very interested in hearing from any urban development specialists about intitiatives that have potential for scale that both incorporate many marginalized/poor people and contribute to a well-functioning, clean and sustainable city – urban agriculture, recycling, neighbourhood water purification, small-scale renewable energy etc. It seems to me that efficient clean and safe cities, supported by the mass of humanity that gather there, are more cost-effective and feasible in the long run. The question for me is, how do we get from here to there? And can enterprise development contribute to that?

Suggested possible solution is a: “metro or district level” development concept whether it is in a megacity or peri-urban area (town, cities and metropolies with a collaborative development plans consistent with the regional development priority). Or linkages of a metro peri-urban area to a another city in the region or next region which has access to port, airport and other facilities.

Imbedded is participatory development planning where sectors are represented- (e.g access housing/water supply/road/electricity/health care/education, land tenure and others). Particularly on the local economic development planning the value chain development will be one of the strategy wherein the local government units adjacent will plan their competitive niche: warehousing (cheap land), manufacturing, processing (which a common service facility, may be an option), market (areas which are center), etc. With linkage to the rural areas, priority industry sector based on the availability of raw materials shall be mapped out, nurthered to be competitive in the regional, national or global scale. With the rising of food prices, this becomes imperative to ensure food security of the urban poor!

This also include good governance wherein in a decentralized context where hospitals, water and sanitation, medicines, equipments is more efficient if it is under BOT, pooled resources to minimize operating costs.

In response to the call for more information on value chain approaches, I want to highlight the USAID-funded Accelerated Microenterprise Advancement Project – Business Development Services (AMAP BDS), which has been working for more than 5 years in both knowledge and practice of value chain development. The research conducted under this program has produced materials for donors and practitioners on a range of topics, and I would like to draw your attention to some of these resources. AMAP BDS has published basic information on the structure and dynamics of the value chain (http://www.microlinks.org/ev_en.php?ID=21629_201&ID2=DO_TOPIC), as well as more in-depth briefs, country studies and impact assessments (www.microlinks.org/psdimpact). AMAP BDS has produced a core training curriculum on the value chain approach (www.microLINKS.org/vctraining). This curriculum and all the publications referenced here are available at www.microlinks.org. In addition, three cases mentioned in this chapter have been studied or analyzed under this project and I wanted to provide you with those reports:
1) The Guatemala handicraft value chain was the subject of an extensive AMAP country study. (http://www.microlinks.org/ev_en.php?ID=17625_201&ID2=DO_TOPIC)
2) The Kenya BDS project was the subject of an impact assessment under AMAP. The baseline report was published in 2005 (http://www.microlinks.org/ev_en.php?ID=9986_201&ID2=DO_TOPIC) . The follow-up will be published shortly.
3) The embroidered garment value chain in Pakistan was part of a synthesis report on micro and small enterprise upgrading in value chains (http://www.microlinks.org/ev_en.php?ID=14752_201&ID2=DO_TOPIC).

In the past year, AMAP has also looked at the application of the value chain approach in conflict-affected environment, which has produced some rich case studies, available at http://www.microlinks.org/ev_en.php?ID=1241_201&ID2=DO_TOPIC

Although AMAP BDS work in urban value chains has to date been limited to the construction sector in Haiti, perhaps this is an area for future study.

Hi Sohini,
I think the example you provide is an excellent way that innovative approaches can utilize available human resources (in this case the urban poor) to deal with development issues (waste management in growing urban centres).
This is the kind of initiative that can provide a guide to us for win-win situations where urbanization is more ‘friendly’ to those who live in cities and those who hope to work there (often one and the same).
Of course, it could be a triple win if the intiative generated downstream income as with other kinds of waste or in other places.
I’d love to hear other such examples – they are quite inspirational.
Best,
Linda

Referring the questions Mary has asked, I agree with Alvin and Linda on the analyzing the growth. Chapter 3 could highlight this even more. I remember starting with BDS we look at the channel that is moving greatest % of the products, and we find problems in the channel and help to solve that, but we do not look at the growth in the overall market and what hindrances there could be at that level.

Thus, I would say that in analyzing the value chains, finding out the growth of the market, then coming up with the envisioned market scenario (where the growth increases – either import substitution, more exports or more sales in the local market) and then find out why the private sector is not solving these problems on their own. With this comes the strategy for the market and then the interventions follow.

One of the key challenge that I feel lies in the way poor are impacted in the rural value chain compared to urban value chain. In the former among other things it is more about helping the poor get access to more information, better inputs and access to more markets in a sustainable manner. In the context of urban value chain the majority of the poor reside in the workforce market (skilled and unskilled labor). Thus one of the keys ways of impacting on the poor in these settings is through employment generation and that is not only a function of the sector competitiveness and employment elasticity but also the availabe skills sets (or lack thereof ) of the workforce. Hence one could argue that in urban value chain the work is perhaps more narrower in scope and also more complicated.

HI – That’s a super example from Mercy Corps to manage solid waste disposal and to also generate income. It leaves me wanting to know more (how much does the equipment cost, do the briquette producers employ people, what is the potenial for each manufacturing line, etc etc).
I wonder if Katalyst can share some similar experiences from their plastics recycling program, or is too early yet in the process?
Practical Action also has some interesting urban infrastructure / recycling experience. Has any of this been applied to integrating/leveraging the poor as employees or entrepreneurs. If not, could it?
I am sure there must be good examples from urban development and social enterprise too that are not strictly value chain – home-based water filtration comes to mind such as PUR in Kenya…..AKF has a social marketing initiative on that.
Good to hear these concrete examples re urban that both contribute to the urban environment and provide opportunities to urban dwellers.
Best,
Linda

Dear participants:

I have enjoyed following your discussions over the course of the conference. With respect to the questions posed in the paper and on this thread of challenges to VCD and pertinent themes: MEDA has been observing a growing need for more information, training, tools on value chain finance as well as practical examples of VCF as a component of VCD projects. There are two different audiences (maybe more) for these resources: 1) VCD practioners, who know that financing their value chains will be important, but are not sure how to do it and 2) MFIs or other financial institutions, who are trying to serve poor clients (such as farmers but also urban poor) and other enterprises who might be less risky borrowers if MFIs could understand their participation in a value chain.

For me, VCF issues are critical to the success of any VCD intervention, especially for some of the other themes mentioned here such as sustainability and scale (cannot be reached without permanent access to finance for all value chain participants) and reaching the poor (who are most in need of capital to participate in the strengthened VC).

Some of the challenges to incorporating VCF into VCD seem to be:
1) General lack of knowledge about VCF models on the part of practioners and partners
2) on the part of financial institutions, lack of understanding of value chains and value chain development
3) on the part of VCD practitioners, lack of understanding of financial institutions’ perception of risks and how to engage them as partners
4) previous bad experiences with certain types of VCF (such as contract farming etc) have left some people with an aversion to pursing VCF arrangements
5) formalized VCF models that are present in developed (and some emerging) economies (warehouse receipts, etc) are often inappropriate for the VCs or the legal /regulatory environments we are working in
6) no real community of practice around the specialized topic of VCF in VCD or as a sub-set of MF (the rural finance resource center and MicroLinks both have some resources but in-depth cases are few)

I would be extremely interested to learn of any experiences in real VCF arrangements in the scope of your VCD or urban development work to date. Through discussions with other colleagues, we would also like to know of your interest in this topic and whether this might be of interest to both VCD / MF professionals to pursue more focused learning and knowledge sharing on VCF.

Thanks and best
Nicole Pasricha
MEDA Microfinance

Excellent contribution from Sohini. In cities, solid waste is an important source of income and employment for urban poor. In addition to the waste collection activities, very well defined by Sohini, there are also extensive network of informal sector recycling. It starts from home and passes through a chain of dealers and processors ultimately reaching the recycling industry. In cities waste related jobs provide employment to 2% of the urban population. It reduces waste by 25% by weight and waste collectors generate an income which is according to some research is equivalent to operational budget of municipal governments on SWM. I am very happy to share more if there are questions. Bye for now.

Dr Mansoor Ali
Practical Action

Each material in waste such as paper, plastics, metals etc. has a separate value chain and end markets. The existing value chains are stable, has a definite financial price, which households receive from itinerant waste buyers and at each stage the value of materials increase. In comparison to high income countries, this system is totally private, where entreprenuers invest, take the risks and benefit from the profit. In summary, waste collection by small enterprises and recycling are extremely interesting value chains for urban poor, with a 50% or participation of women.

thanks

Mansoor Ali
Practical Action, UK

Hi Mansoor,
I would be interested in learning in which countries / cities does Practical Action have experience in recycling – and perhaps a bit of detail about the role that your organization has played in developing the value chain, or in supporting the entry or sustainabiltiy of microentrepreneurs.
Also, with the separate value chains – where does the sorting take place for the different value chains – do the intinerant waste buyers do this? And, do they buy from the householder or from the informal help in the household?
Thanks – this is a fascinating area for exploration.
Best,
Linda

http://www.businessweek.com/innovate/content/mar2008/id2008037_967681.ht…

The Endless City

Has anyone read this book? Looks like it coudl be quite germaine to our discussion….

Linda

http://www.urban-age.net/01_introduction/intro_investigation.html

Interesting areas of investigation – with labour market right at the top!

L

Within our limited experiences in working with urban poor, improvement of competitiveness of chains involved in public markets, ferias (farmers market), and street food vending through promotion of food safety and quality standards, product development, and concerted marketing campaign built around culture, quality, and safety seem to offer potentials for reaching large number of poor, stabilization of incomes, and in promoting food security. Public markets, ferias, and the like provide vendors low cost outlets for products plus potentials for shared marketing and promotional programs. Likewise, these integrate start-up businesses with experienced vendors, producing a natural setting for the transfer of skills and experiences among businesses. It is also in these places where the poor purchase most of their food. These also legitimize street vending offering vendors a legal, safe, and supportive environment for business.

Working in these sectors though based on our experiences require strong involvement/collaboration with local government units and consumers in addition to building win-win relationships among the different private stakeholders in the chain

Linda’s comment is spot on! Urban places where people congregate are often bounded with their own special regulations, such as festivals, parks and cultural sites. Where there is a boundary and regulations, there are opportunities for pro-poor vending replete with quality standards, product development, food safety, and micro-finance. The differences between controlled and uncontrolled vending at the seven World Heritage Sites in Sri Lanka, for example, are notable: At the oldest designated site, the Ancient City of Polonnaruwa (inscribed in 1982), there are a controlled number of vendors and guides, a concession area, and a support program funded by admission fees to the area. At the newest inscribed site (1991), Dambulla, vendors and guides compete, unregulated, with no quality control and with far too many for any one to make a decent living. The visitor experience at Dambulla suffers from the confusion and congestion and tour operators are less likely to include the site on their itineraries. A good handbook on site management issues has been published by UNWTO and ICOMOS. An excerpt is attached. Full text (ISBN 978-92-844-0763-7) is available at http://www.wtoelibrary.org.