Building territorial value chain

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1 International Link and Services for Local Economic Development Agencies for a fair, human, sustainable and inclusive development Building territorial value chain 2010 ILS LEDA Tool Kit n 09

2 ART GOLD LEBANON PROGRAM BUILDING TERRITORIAL VALUE CHAINS

3 ENDOGENOUS POTENTIAL The territorial endogenous potential is the ensemble of different resources, potentially exploitable in order to build a sustainable, durable and competitive development

4 The territorial chains of value A territorial value chain is a chain of activities aimed at producing and sell certain products (i.e. derived by milk or fruit or linked to textile industry) or services (i.e. linked to tourism or education or health). Activities or products pass through all components of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. The value chain categorizes the generic adding value activities, that are: The "core activities" include: inbound logistic, operations (production), outbound logistic, marketing and sales (demand), and services (maintenance). The "support activities" include: administrative management, human resource management, technology (R&D),procurement, etc.

5 Mechanization FINANCE CHAIN OF VALUE FOR FRIUT AND VEGATABLE PRODUCTS Research Maintenance Information Tools and spare parts Production Specialised Services Procurement Cultural Events based on F&V Fruit and vegetables Marketing Waste Recycle Energy Graphic designing Advertizing Label Storage Packaging Transportation Raw material processing Quality Control Computer Software Advice Maintenance v Agro-industry Ice-Industry Training Maintenance Tools and spare parts Production Glass or tin industry

6 Restaurants, coffee bars. etc. TOURISM VALUE CHAIN FIG 2b: LA CADENA DEL VALOR TURISTICA Agriculture inputs Quallity Contr Maintainance Marketing Information Accomodation Training Equipments and Tools Travel Agencies Graphic Arts Computer software Printing Capacity Builiding Arte gráfica Advertising Computer software Imprentas Cleaning Transportation Renting Security Laundries Maintainance Cultural-Artistic- Sport Events Organisation Services Guiding Arts & Crafts Inputs Business Services Communication es Financial Services Arts & Crafts Infrastr. Management. Equipment Packing Design Quality Control

7 EQUIPMENT MAINTENANCE BITUMEN LIMES ELECTRIC SYSEMS HYDRAULIC SYSTEMS BRICKS KILNS BUILDING, HOUSING INDUSTRY, AND PUBLIC WORKS EQUIPMENT GLASSES STOVES FRAMES ROAD MAINTENANCE EQUIPMENT CURTAINS EQUIPMENT FLOORS HOUSE PRODUCTS MAINTENANCE SANITARIES FURNITURES BAKED CLAY WOOD INDUSTRY FINANCE BUSINESS ASSISTANCE INNOVATION TRAINING

8 BUILDING VALUE CHAINS FIRST STEP Identifying the holes SECOND STEP Elaborate a chain strategy, for responding to the needs of a complete value chain, infrastructure, and service THIRD STEP Set up the value chain governance mechanism

9 FIRST STEP Identifying the holes Value Chain Businesses Assessment Constrains to the full chain opera5ons Ac5ons 1. Exist, and good 2. Exist, but weak 3. Not exist 1. Exist, and good 2. Exist, but weak 3. Not exist 1. Exist, and good 2. Exist, but weak 3. Not exist 1. Exist, and good 2. Exist, but weak 3. Not exist 1. Exist, and good 2. Exist, but weak 3. Not exist HOW? Starting from the major actors of the value chain, and adding information, through the other ones

10 FIRST STEP Typology of the constrains Constrain typology Prioritization Scores DESCRIPTION Infrstructure Ind. 1 Ind 2 Ind 3 Ind 4 Total Information Production Services Finance Individualism Entrepreneurship Comercialization Technological Capital Legal Framework Total Average PRIORITISE THE SCORES ABOVE THE AVERAGE

11 SECOND STEP Elaborate a chain strategy, for responding to the needs of a complete value chain, infrastructure, and service Strategic Areas Finalisation of the productive value chain Quality and food security strategis Actions Sensitization and Stimulation Technical Assistance Credit Training Realisation of laboratories Quality Label Training Innovation Strategies Reinforcing the research and the laboratories Create innovation territorial systems Realise concourses for the best innovations Marketing Strategies Brands Creation of an unique value chain sale structure Improve the logistic (transportation and outlets)

12 THIRD STEP Set up the value chain governance mechanism The mechanism generally is a CONSORTIUM or an ASSOCIATION, participated by the entrepreneurs and the other institutions related to the value chain (universities, training centers, service entities, Ledas). Its task is to implement the collective actions of the value chain: common marketing common procurement lobbying with the local and national authorities gathering funds for the common interest initiatives (quality, innovation, trainig centers, etc.) It can be started by the LEDA