Moving toward competitiveness : a value chain approach

Abstract

Developing countries face tremendous opportunities for economic growth given economic liberalization worldwide, and rapid advancement and application of information and communications technologies. However, along with the many opportunities global network trade has to offer, firms in developing countries also face strong competitive pressures for greater efficiency and productivity to maintain market share or even survive. A strong business environment based on sound institutions and policies is a necessary basis for enhanced competitiveness of private firms that produce and deliver goods and services. When business environment constraints, inefficiencies and cost disadvantages can be identified, policy makers have the opportunity to jumpstart economic reform processes that target priority areas along the product/service life cycle known as the value chain. This technical report outlines a pragmatic approach for analyzing value chain performance as the basis for identifying binding constraints to growth and competitiveness. This approach is intended to facilitate formulating a targeted reform agenda.

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