Value Chains and Small Enterprise Development: Theory and Praxis


Drawing insights from the literature on global value chains and similar approaches, it is argued that adopting a value chain approach could help Micro and Small Enterprises (MSEs) to gain from the benefits of integration into global/local value chains and making them competitive. This paper reviews the theoretical perspectives in value chains and the emerging market development paradigm for small enterprise development. It provides evidences from experiences of practitioners and development agencies on the adoption of value chain approach as a facilitation tool for integrating MSEs into market. The evidence from literature suggests that adopting a value chain approach provides enormous opportunities for small enterprises to become competitive.

Share and Cite:

E. Meethal Reji, "Value Chains and Small Enterprise Development: Theory and Praxis," American Journal of Industrial and Business Management, Vol. 3 No. 1, 2013, pp. 28-35. doi: 10.4236/ajibm.2013.31004.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] G. Gereffi, J. Humphrey, R. Kaplinsky and T. J. Sturgeon, “Introduction: Globalisation, Value Chain and Development,” IDS Bulletin, Vol. 32, No. 3, 2001, pp. 1-12. doi:10.1111/j.1759-5436.2001.mp32003001.x
[2] F. Belussi and F. Arcangeli, “A Typology of Networks: Flexible and Evolutionary Firms,” Research Policy, Vol. 27, No. 4, 1998, pp. 15-28. doi:10.1016/S0048-7333(98)00074-2
[3] H. Thorelli, “Networks: Between Markets and Hierarchies,” Strategic Management Journal, Vol. 7, No. 1, 1986, pp. 37-51. doi:10.1002/smj.4250070105
[4] W. W. Powel, “Neither Market nor Hierarchy: The Network Forms of Organization,” In: B. M. Straw and L. L. Cummings, Eds., Research in Organizational Behavour, JAI-Press Inc., Greenwich, 1990, pp. 295-336.
[5] M. E. Porter, “Competitive Advantage: Creating and Sustaining Superior Performance,” The Free Press, New York, 1985.
[6] P. Raikes, F. M. Jensen and S. Ponte, “Global Commodity Chain Analysis and the French Filière Approach: Comparison and Critique,” CDR Working Paper No. 3, Centre for Development Research, Copenhagen, 2000.
[7] A. Hirschman, “The Strategy of Economic Development,” Yale University Press, New Haven, 1958.
[8] G. Gereffi and M. Korzeniewicz, “Commodity Chains and Global Capitalism,” Praeger, Westport, 1994.
[9] G. Gereffi, “International Trade and Industrial Upgrading in the Apparel Commodity Chain,” Journal of International Economics, Vol. 48, No. 1, 1999, pp. 37-70. doi:10.1016/S0022-1996(98)00075-0
[10] M. Korzeniewicz, “Global Commodity Networks and the Leather Footwear Industry: Emerging Forms of Economics Organization in Postmodern World,” Sociological Perspectives, 1992, Vol. 35, No. 2, pp. 313-327. doi:10.2307/1389381
[11] J. Bair, “Global Capitalism and Commodity Chains: Looking Back, Going Forward,” Competition and Change, Vol. 9, No. 2, 2005, pp. 153-180. doi:10.1179/102452905X45382
[12] J. Humphrey and H. Schmitz, “Governance and Upgrading: Linking Industrial Cluster and Global Value Chain Research,” Working Paper No. 120, Institute of Development Studies, Brighton, 2000.
[13] G. Gereffi, J. Humphrey and T. Sturgeon, “The Governance of Global Value Chains,” Review of International Political Economy, Vol. 12, No. 1, 2005, pp. 78-104. doi:10.1080/09692290500049805
[14] J. Humphrey and H. Schmitz, “How Does Insertion in Global Value Chains Affect Upgrading in Industrial Clusters?” Regional Studies, Vol. 36, No. 9, 2002, pp. 1017-1027. doi:10.1080/0034340022000022198
[15] C. Dolan, J. Humphrey and C. Harris-Pascal, “Horticultural Commodity Chains: The Impact of the UK Market on the African Fresh Vegetable Industry,” IDS Working Paper No. 96, Institute for Development Studies, University of Sussex, 1999.
[16] R. Kaplinsky, M. Morris and J. Readman, “The Globalization of Product Markets and Immersing Growth: Lessons from South African Furniture Industry,” World Development, Vol. 30, No. 7, 2002, pp. 1159-1177. doi:10.1016/S0305-750X(02)00029-3
[17] L. M. Jones, “Value Chains in Development: Emerging Theory and Practice,” Practical Action Publishing, Rugby, 2011.
[18] O. Kula, J. Downing and M Field, “Value Chain Programs to Integrate Competitiveness, Economic Growth and Poverty Reduction,” Small Enterprise Development, Vol. 17, No. 2, 2006, pp. 23-36. doi:10.3362/0957-1329.2006.017
[19] A. O. Meihlbradt and M. McVay, “From BDS to Making Markets for the Poor, the 2005 Reader,” International Labor Organization, Turin, 2005.
[20] R. Kaplinsky, “Globalization and Unequalisation: What Can Be Learned from Value Chain Analysis,” Journal of Development Studies, Vol. 32, No. 7, 2000, pp. 117-146. doi:10.1080/713600071
[21] M. Storper, “The Regional World: Territorial Development in a Global Economy,” Guildford Press, New York, 1997.
[22] L. Canina, C. A. Enz and J. S. Harisson, “Agglomeration Effects and Strategic Orientations: Evidence from US Lodging Industry,” Academy of Management Journal, Vol. 48, No. 4, 2005, pp. 565-577. doi:10.5465/AMJ.2005.17843938
[23] H. Schmitz, “Collective Efficiency: Growth Path for Small Scale Industry,” Journal of Development Studies, Vol. 31, No. 4, 1995, pp. 529-567. doi:10.1080/00220389508422377
[24] R. Hitchins, E. David and A. Gibson, “Making Business Service Markets Work for the Poor in Rural Areas,” Springfield Centre, United Kingdom Department for International Development, London, 2004.
[25] M. McVay and A. O. Miehlbradt, “Developing Commercial Markets for BDS: Can This Give the Scale and Impact We Need?” Second Annual Seminar, Turin, 10-14 September 2001, pp. 1-80.
[26] Donor Committee of Enterprise Development, “Donor Committee Guiding Principles, 2001 SEEP Guide to Business Development Services and Resources,” Small Enterprise Education and Promotion Network.
[27] M. McVay and A. O. Miehlbradt, “Developing Commercial Markets for Business Development Services, BDS Update-2004,” International Labour Organization, Turin, 2004.
[28] D. Knopp, “Recommended Performance Assessment for Subsector Development, Kenya Business Development Services Program,” Deloitte Emerging Markets/Action for Enterprise/ACDI/VOCA/Land O’Lakes—United States Agency for International Development, Washington DC, 2002.
[29] K. Abdullayev, “Cluster Approach to Business Services (CABS) Program in Rural Azerbaijan,” United States Agency for International Development, Washington DC, 2003.
[30] L. Jones and P. Shaikh, “From behind the Veil: Access to Contemporary Markets for Homebound Women Embroiderers in Pakistan,” Mennonite Economic Development Associates and Entrepreneurship Career Development Institute, Pakistan, 2004.
[31] M. Hileman and J. Tanbun, “The Wheels of Trade: Developing Markets for Business Services,” Intermediate Technology Publications, Rugby, 2000.
[32] F. Lusby and E. Derks, “Shea Kernal Value Chain,” Small Enterprise Development, Vol. 17, No. 2, 2006, pp. 36-46. doi:10.3362/0957-1329.2006.018
[33] A. Kumar, “Honey in Muzaffarpur,” In: M. Harper, Ed., Inclusive Value Chains: Linking Small Producers to Modern Markets, World Scientific, Chennai, 2009, pp. 176-194.
[34] J. Humphrey and L. Navaz-Aleman, “Value Chains, Donor Interventions and Poverty Reductions: A Review of Donor Practice,” Institute of Development Studies, Sussex, 2010.
[35] B. Jenkins, A. Akhalkatsi, B. Roberts and A. Gardiner, “Business Linkages: Lessons, Opportunities, and Challenges,” International Business Leaders Forum, and the Kennedy School of Government, Harvard University, Cambridge, 2007.
[36] K. N. Harilal, K. Nazneen and J. Jeyaranjan, “Power in Global Value Chains: Implications for Employment and Livelihoods in the Cashew Nut Industry in India,” International Institute for Environment and Development, London, 2006.
[37] M. Harper, “Inclusive Value Chains in India: Linking the Smallest Producers with Productive Markets,” World Scientific Publishers, Chennai, 2009.
[38] H. K. Deka and K. Anish, “Making Modern Poultry Work for the Poor: An Example of Co-Operative Development from Madhya Pradesh, India,” South Asia Pro-Poor Live-Stock Policy Programme (SA PPLP), a Joint Initiative of NDDB and FAO, 2009.
[39] R. Bista, “Making BDS Providers Work for the Smallholder Farmers in Nepal: IDE Lessons Learned and Insights Gained,” International Development Enterprises, Small Enterprise Education & Promotion Network/Practitioner Learning Program—United States Agency for International Development, Washington DC, 2004.
[40] M. Bear, “Making Retail Markets Work for the Poor: Why and How Triple Trust Organization Decided to Intervene in the Spaza Market,” SEEP, Washington DC, 2005.
[41] P. Kashyap, “Marketing Rural Products in India,” Small Enterprise Development, Vol. 2, No. 2, 1991, pp. 51-55. doi:10.3362/0957-1329.1991.020
[42] S. Manaktala, “Creating New Markets for the Poor with Micro Irrigation Technologies in Maharashtra, India: Annual Progress Report,” International Development Enterprises (IDE), India, 2002.
[43] G. Anderson, “The Hidden MSE Service Sector—Research into Commercial BDS Provision to Micro and Small Enterprises in Vietnam and Thailand,” Donor Committee Conference on Business Services for Small Enterprises in Asia: Developing Markets and Measuring Performance, 2000. (BDS materials)
[44] M. Walsh, K. Kevin and N. Candance, “A Case for Business Training with Women’S Groups,” Small Enterprise Development, Vol. 2, No. 1, 1991, pp. 13-19. doi:10.3362/0957-1329.1991.003
[45] J. Tanburn, “Towards Success: Impact and Sustainability in the FIT Program,” Small Enterprise Development, Vol. 7, No. 1, 1996, pp. 42-51. doi:10.3362/0957-1329.1996.005

Copyright © 2024 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.