Value Chains for Jobs Estimation

Overview and Survey Instrument

1. Introduction – why value chains for estimating jobs?

Value chains have become an increasingly important channel through which development challenges and solutions are both analyzed (value chain analysis) and implemented (value chain development initiatives). This due partly to: i) their specificity and impact, in contrast to economy wide interventions that often have dispersed effects and long lead times; and ii) the relative ease through which key actors can be identified and mobilized. They are also attractive as entry point because they offer the potential to leverage large-scale job creation that can span from high-skilled, formal employment in globally-competitive lead firms to quality, sustainable earning opportunities for low-skilled self-employed or smallholders. Indeed, it is precisely in linking these two worlds – of globally competitive lead firms and microenterprises – and in linking competitiveness and productivity growth to jobs and earnings, where value chains become so useful for the policymaker and development practitioner.

Taking a whole value chain approach can also help us to estimate better how investments and other interventions are likely to impact jobs. By tracing the linkages, both vertical and horizontal, among firms in a value chain it is possible to gain a richer understanding of the dynamics that shape job creation and destruction, as well as how changes in a value chain are likely to impact the quality of jobs, the nature of skills demand, and the inclusiveness of job creation.

In this note, we outline how to use a value chains analysis approach to support jobs estimation through a methodology that relies on carrying out value chain surveys complemented by some secondary research as well as semi-structured and focus group interviews. We recognize that this is a relatively time and resource-intensive approach to jobs estimation, but believe the approach has the potential to improve upon current techniques and, eventually, to develop a database of standard estimates at the sector / value chain level.

The use of standard input-output tables to develop multipliers is relatively fast and simple, and will be sufficient in many situations where ‘back of the envelope’ estimates are all that is needed. But input-output tables are not always available, and they are frequently out of date and produced at very high levels of aggregation that lose any sectoral nuance. Most importantly, input-output tables are blunt instruments for measuring jobs as they fail to capture the dynamics that shape firms’ decisions to expand, hire, and use labor. Taking the example of the Ethiopian leather footwear value chain illustrated in Figure 1, existing input-output data is unlikely to capture the large segment of the value chain that is informal. It may also not capture the fact that while the domestic footwear sector is linked back through the value chain to hides and cattle, the export-oriented part of the sector, where investments by IFIs are likely to focus, has little or no links to any part of the domestic value chain. Nor will it shed light on how domestic firms that are successful in linking to the global value chain typically experience substantial output growth but change significantly their production structure to be more capital and skills intensive.

Moreover, if we want to understand employment dynamics not simply to count (ex post) or estimate (ex ante) jobs but also to understand how and where to focus efforts to help create more and better jobs, then richer instruments like value chain analysis will be needed. In this context, we distinguish among three different possible objectives for using the value chain approach:

1. Value chain development: Understanding value chain opportunities, challenges, and dynamics in

1

order to identify interventions designed to support job creation and earnings enhancement in value chains, with a particular focus on integrating microenterprises into competitive value chains. For this objective, please see a detailed, separate Guidance Note – “Jobs in Value Chains: A Guidance Note for Assessing the Opportunities and Requirements for Job Creation and Earnings Growth in Value Chains”

2. Comprehensive value chain jobs estimation: Understanding value chain dynamics to estimate how investments and other interventions in the value chain will impact jobs (level, quality, inclusiveness)

3. Investment-specific jobs estimation: Estimating how investment in a specific firm will impact jobs by tracing its relationships through the value chain.

Numbers 2 and 3 above are covered in this note and the accompanying survey instrument.

Figure 1: Value chain example: Ethiopia leather footwear value chain

Source: derived from Brautigam, Tang, and McMillan (2011); Ethiopia Central Statistics Agency

2. Basic overview of the analytical approach

The relationship between investment to support the development of a value chain or of a specific firm in a value chain and job creation is complex. There are direct and indirect effects that stem from improved competitiveness and growth that ripple through the value chain. There are also effects that come through productivity gains, technology and knowledge spillovers, changes in formalization, and other channels. These latter effects are particularly difficult to capture and end up relying extensively on modelling. For ex ante jobs estimation, therefore, we focus on the former effects. Specifically, the emphasis is on understanding the following:

1. Markets and competitive environment: This involves identifying how the market is structured in order to understand how changes among certain actors of the value chain are likely to impact others. Many of the issues will be integrated into the discussion of supply chains and production structures, but it will also seek to understand the nature of domestic competition and the positioning of the domestic value chain relative to foreign participants (suppliers, markets, lead firms). This has implications for how changes are likely to flow through the value chain. For example if Company A has $10 million in sales and sources all their inputs domestically, then suddenly has an opportunity to get a $5m contract with a lead firm – does this mean that they will have $15m in

2

sales with all domestic sourcing? Or will they still sell $10m and just stop supplying other customers? Will they be required to source foreign inputs to serve their new lead firm customer (see ‘Supply chain relationships’ below)?

2. Workforce: This involves identifying the structure of the current workforce of relevant or typical firms at each stage of the value chain and the barriers to expanding the workforce. It requires an understanding of:

How the structure of the workforce is shaped by market dynamics and regulatory issues

How technology interacts with the workforce and impacts size, skills demand, wages, etc.

How growth and the nature of market opportunities impacts firm decisions on the size and nature of the workforce

How skills availability and gaps impacts jobs outcomes

3. Production structure: This involves identifying the production structure of the firm, including the relative use of labor, capital, and other inputs and the relationship between outputs and labor use. Issues covered include:

Cost structure of production – this is perhaps the most fundamental issue to understand across the value chain, as it determines the likelihood of firm’s being able to access and maintain their competitive position in the chain.

How output growth would impact the use of labor (skilled and unskilled) and capital

4. Supply chain relationships: This involves identifying the current supply chain links and the opportunities and barriers to deepening local links. This is critical for understanding the multiplier effect in the value chain. Key issues to understand include:

Sourcing and distribution strategies for key goods and services inputs Expenditure on key inputs How growth, changes in markets, and changing technologies impact sourcing Barriers to local sourcing

As discussed above, these questions will be answered by carrying out a survey in the value chain and complementing this with some basic secondary research (conducted up front) and targeted, semi-structured interviews and focus groups (as needed) to gaining a more in-depth qualitative understanding.

3. Mapping the value chain and sampling

It almost never possible nor is cost effective to collect survey data from every firm and actor in the value chain (i.e. a census). For this reason, the standard approach is to instead draw a sample of firms with whom the survey will be implemented. Effective sampling is the key to successful jobs estimation using a survey approach. Quite simply, the greater the sampling error the more likely the jobs estimation will be significantly misidentified. Sampling is also the most challenging part of the process, because comprehensive information on the firms present in the market will be unavailable in many countries. This is particularly true where a significant element of the value chain is informal.

Developing the value chain mapTherefore, the critical first part of the process is to develop a value chain map that is as accurate and comprehensive as possible. A value chain map is an illustrative way of describing the structure and actors involved in bringing the product or service from its basic raw materials through final consumption. The

3

value chain map will help to structure the enumeration of the population and identify various strata for the analysis. Even if you are intending to trace the impacts of investment in a lead firm that is already identified, it will still be important to establish the value chain map in order to understand the breadth and depth of potential impact.

Unless the local value chain has already been mapped, it is often best to start with a typical global map of the value chain in question (a ‘generic value chain map’), and then adjust it to reflect the structure of the local chain. The initial mapping should aim to identify:

The basic structure of the value chain The approximate number of market players in each part of the chain Identification of main companies in the chain and the nature of firms (SME v large, formal v

informal, domestic v FDI), as well as key institutions supporting the value chain

Potential data sources for developing the value chain maps include: Previous value chain and sector studies (global for the generic structure; national for specific) National and sectoral statistics Industry associations (websites, studies) Consultations with stakeholders

Sampling- enumerating the populationThe first step in sampling is to define the target population in as clear and complete a way as possible. In value chain analysis the principal target population are businesses (including formal and informal businesses and farms). Surveying business populations leads to distinct sample frame challenges. Businesses greatly vary in size, are often highly dynamic, and can be identified as a legal entity ‘firms/enterprises’ or physically as ‘establishments’ based on location. Especially in developing countries, informality adds to the challenges as official records and documentation on informal businesses are usually lacking or incomplete. Consequently, when sampling for value chain analysis it is important to have a precise definition of the unit of analysis considering its implications on subsequent stages including the generation of a sampling frame. Specifically here it is important to be clear about:

Vertical scope of the chain – where does it begin and end? In most cases, teams will want to survey all stages of value addition in the product / service, from basic inputs through to final sale and disposal / recycling. However, in some cases the focus may be on processing and backward and there will be less interest in forward distribution stages, especially if these are happening in export markets. Similarly if the main basic inputs in the chain are always going to be imported, it may be less necessary to survey at this stage. However, wherever there is existing activity or scope for activity in the vertical chain within the country, the survey will be important to carry out for purposes of jobs estimation.

Horizontal scope of the chain: While the value chain strictly covers vertical stages of activity where actors at each stage add value to the product or service, value chains impact a wider set of actors. In particular, there are related and supporting activities that are involved in all value chains – including supply chain and support services such as transport and logistics, financial and business services; research; training, etc. – whose employment will be affected by dynamics in the core value chain. The team will need to decide where to draw the line in defining the actors to be included in the survey. In general, we propose to survey only core actors in the vertical chain, although we will be interested to document these core actors’ links (and potential links) to a broad set of supply chain actors. A comprehensive approach within the survey would involve identifying supply chain expenditures for products and services that represent the large majority (e.g. more than 80

4

percent) of expenditure by firms at each level of the value chain1. A less comprehensive, but potentially more practical approach from the standpoint of survey implementation, would be to focus on the most important 3 to 4 products and services inputs.

Defining and differentiating value chain participants: One of the most critical parts of the sampling process for a comprehensive value chain assessment is to make sure that the surveys are not restricted only to firms that are currently participating in the value chain. This requires identifying firms and farms, especially small and informal ones, which may not be well documented in the sector (see below). A second issue, which may be important for jobs estimation, is to sample to reflect that fact that different firm characteristics may impact significantly the relative use of labor and capital and the nature of workers required (e.g. skills levels). An open question is whether it is more important to stratify the sample for firms that are inside versus outside the existing value chain (particularly when the approach is to follow the value chain of an individual lead firm) or whether the more important distinction is around firm size, particularly medium and large firms versus small and micro (including informal) firms.

Developing the sample – sampling frame and samplingUpon the definition of research questions and the target population, the sampling frame needs to be generated and a mix of random sampling techniques needs to be applied. This is the most challenging part of the exercise, particularly for value chain surveys, and the most critical one to get right.

Given the multiple data availability scenarios one can think of for such an exercise, the following will focus on three scenarios to showcase possible approaches for sampling for VCA while minimizing errors. In practice, the VCA team will likely be confronted with a situation that is in between these extremes and be able to adjust the approach chosen learning from the solutions that can be applied in the extreme cases:1. Best case scenario: In this case a full sample frame is available along with data on the structural

relationship or transaction patterns between the business units of analysis. In such a case the information will likely come from a firm census or register with all relevant business entities being formal (or informal firms are fully identified). The approach that can be taken in such an event will be referred to as ‘summarization approach’, where the goal is to condense the network as much as possible (to a reasonable sample size) without losing too much information in the process.

2. Worst case scenario: In this case, no data is available that enables the generation of a useful sampling frame and furthermore no data is available that informs the structural relationships between the business entities under investigation. In such a case all relevant units of analysis may be informal and there are no sources available that provide data on the businesses and their interactions. In this extreme situation, approaches used in Social Network Analysis (SNA), which build network maps of related firms and stakeholders) can be helpful. A related approach, snowball sampling represents another useful technique than can be used develop the sample. Snowball sampling is a non-random approach that involves identifying an initial set of interviewees, and then identifying / recruiting further interviewees based on individuals / firms identified by the interviewees. This can be particularly effective as an approach for value chain analysis as lead firms are typically in a good position to identify firms (e.g. suppliers) one step back in the chain, and the firms, in turn, can identify further firms on step further back. Of course, such an approach while cost effective and practical also brings with it significant likelihood of sampling error.

3. Middle ground or Base case scenario: In most countries and in most value chains the reality will be some combination of the above two scenarios. In most cases some firms will be identifiable through an

1 In most cases, the product one stage up will account for the largest share of input costs in the next stage. So, really this is not part of the ‘horizontal’ scope of the chain. It is the other goods and services inputs that we refer to as ‘horizontal’

5

enterprise census or business registry. However, there is also likely to be a microenterprise segment that may be largely informal and for which little data is available, or where at least a significant number of firms are not easily identifiable. In this case, some of the techniques of the ‘worst case’ scenario above will need to be used, but the availability of detailed information in the formal part of the sector should provide a potential source of knowledge on the informal part. In addition, where industry associations or other related industry bodies exist, they may well have information on informal participants in the value chain, or can at least facilitate identifying them.

Box 1: Approaching sampling to estimate jobs for an investment in a specific firm

Where the objective is to estimate the jobs impact of an investment in a specific firm, the sampling issue may be less of a challenge – at least at the start. Assuming that one has cooperation of the firm, it should be possible to identify easily the existing firms (suppliers and distributors) in its value chain. In effect, in most cases a census can be carried out (although where a firm has a large number of supply chain partners it may still be prudent to sample). Of course, to trace the impacts through the chain it is still necessary to follow through suppliers of suppliers, but these suppliers should, in turn, be able to be identified through the interviews with the ‘first tier’ suppliers. Essentially this entails the ‘snowball’ sampling approach.

In preparing the sample frame, it will be necessary to determine the stratification that will needed. In the case of value chains, we will likely want to be able to stratify by: i) the stage of the value chain; ii) firm size category (or, as discussed above firms that are inside versus outside the value chain); and, in some cases iii) region within the country (particularly in large countries and where there are distinct value chains operating in different regions). With this, and the populations of these strata known, we can determine the sample size for estimates of sample proportions – here we will adopt a strategy of a minimum of 7.5% precision with a 90% confidence interval, in line with the approach taken in the World Bank’s Enterprise Surveys. Note that given the relatively small sample sizes that will exist in many value chains, the sample size will end up being a relatively large proportion of the population.

WeightingFinally, if a standard approach to sampling is likely to result in a sample that does not reflect accurately the population characteristics (i.e. the sample frame is unable to capture what is known to be true about the general population), then it may be necessary to weight the sample to address this. This may involve, for example, ‘oversampling’ a particular region, or microenterprises, or women-owned enterprises. This can be done in the surveying stage or, if not identified or acted on at that stage, even post-survey by weighting the survey results higher for certain types of units. For example, if microenterprises are known to represent 80% of the population in a value chain, but the survey results only resulted in 50% of responses coming from microenterprises, the results from microenterprises could be adjusted by weighting each of them the equivalent of 1.6 times those of other firms (0.80/0.50=1.6).

4. Surveying

The value chain survey instrument for the purpose of jobs estimation is designed to be as focused and practical as possible. The aim is to gain a rich understanding of the dynamics of jobs in value chains. On the other hand, it does not go into much detail on the opportunities and constraints in the value chain, the requirements for growth and competitiveness, and touches in only a limited way on skills dynamics, training, and firm strategies. All of this would be needed in order to go beyond jobs estimation and identify opportunities for job creation through value chain development. As noted previously, a survey instrument

6

and wider guidance framework for approaching the development ‘jobs in value chains’ is provided in a separate guidance note2.

The survey instrument provided in the annex to this note is structured in four modules:1. Firm background, markets, and competitive environment2. Workforce3. Production structure4. Supply chain

Following is the proposed approach to implementing the surveys: It is recommended that surveys are carried out by specialist survey firms, including well-trained

enumerators with knowledge of the local context (and, of course, fluency in the relevant local languages).

Surveys should be carried out face-to-face. Where this is not possible, the alternative should be to carry out the surveys by phone

Wherever possible firms will be invited to participate in the survey through a lead firm or industry association.

Survey respondents should be senior managers in the firm. Firms should be told clearly and in writing that the data they provide will be kept anonymous and

will not be shared in any form. Firms should be given a contact person leading the project (i.e. not just the enumerator) that they

can follow up with if they have any questions on the survey.

Box 2: Semi-structured interviews, focus groups, and secondary researchAs discussed previously in this note, the surveys described above should be should be complemented by secondary research (to be provide both quantitative and qualitative inputs) as well as semi-structured interviews with key highly knowledgeable stakeholders who can help give critical context and depth of understanding to the results that come from the surveys. The previously-described Guidance Note on ‘Jobs in Value Chains’ provides detailed guidance on approaching secondary research and semi-structured as well as focus group interviewing.

5. Estimating employment impact

Finally, once the survey has been completed and the results analyzed, the final step is to use the results from the surveys to estimate the jobs impact. This involves first establishing the relationship between an investment (in a firm or more broadly in the value chain) and jobs – i.e. the jobs coefficient.

Determining the jobs coefficient will establishing the relationship between investment and output growth, and then between output growth and jobs. At the moment, the survey instrument developed here is designed to focus on the link between output and jobs. The relationship between investment and output growth is treated as exogenous – it is assumed that this relationship is understood (assumed) by the IFIs / donors / other parties undertaking the investment. Turning to the output and jobs relationship, the analysis will involve estimating from the survey the average:

# of jobs in the existing supply chain: This will obviously need to be weighted according to the respondent firms’ existing shares of supply to the lead firm being invested in (or if a value chain

2 Jobs in Value Chains: A Guidance Note for Assessing the Opportunities and Requirements for Job Creation and Earnings Growth in Value Chains

7

wide investment, according to their relative output shares); assumptions may need to be made as to how market shares may change as a result of the investment – this can be picked up through the semi-structured interview process.

Relationship between lead firm (or overall value chain) growth and growth of different strata of firms in the chain: The results from the survey will establish a general relationship between output and employment (including at different skills levels), with the stratification allowing for distinguishing this output/employment relationship between larger firms and small firms and microenterprises.

Links between firm growth an hiring: The above relationship should also be fine-tuned by the survey questions that establish a link between growth and: i) decisions to invest in capital versus labor (elasticity of substitution); and/or ii) decisions not to hire or invest in capital for other reasons (e.g. existing spare capacity, market uncertainties, lack of access to finance, etc.). Note, however, the survey questions which address these issues explicitly are hypothetical in nature – there is a good chance we will find in piloting the surveys that the quality of responses to such questions is poor. Therefore, we will also look to get at this relationship through more objective questions from the survey. For example, we should have a large number of data points (survey responses) that show the relationship between firm output and employment (as well as the relative use of labor and capital). Plotting all survey responses should begin to give a picture of the standardized trajectory of the relationship between jobs and output at different levels of the value chain and for different strata of firms.

Local supply chain expansion / contraction: The other important factor to determine the coefficient is the share of input supplies that come through the local market. The above analysis assumed a fixed relationship structure in the local supply chain (versus sourcing from outside the region or country). But the investments may have a qualitative impact on the structure of the supply chain – for example lead firms may be using the investment to upgrade in global supply chains requiring them to source inputs from international rather than local markets; conversely, they may be using the investments specifically to invest in building local supply chains or have established specific targets to increase local supply chain development. Questions in the survey provide inputs that allow for an estimation as to how the depth of the local supply chain may change.

Box 3: Defining ‘jobs’For measuring direct employment, we use the definitions agreed by IFI’s in the recent ‘indicator harmonization’ effort. Specifically:

Direct Employment – Operations and Maintenance: Number of full-time equivalent employees as per local definition working for the company or project at the end of the reporting period. This includes directly hired individuals and individuals hired through third party agencies as long as those individuals provide on-site services related to the operations of the client company. Also, this includes full-time equivalent worked by seasonal, contractual and part time employees. Part-time jobs are converted to full-time equivalent jobs on a pro rata basis, based on local definition (e.g., if working week equals 40 hours, a 24 hr/week job would be equal to 0.6 FTE job). Seasonal or short-term jobs are prorated on the basis of the portion of the reporting period that was worked (e.g., a full-time position for three months would be equal to a 0.25 FTE job if the reporting period is one year). If the information is not available, the rule-of-thumb is two part-time jobs equal a full-time job.

Direct Employment – Construction: Number of full-time equivalent construction workers employed for the construction of the company or project's hard assets during the reporting period. Part-time jobs for construction are converted to full-time equivalent jobs on a pro rata basis, based on local definition (e.g., if working week equals 40 hours, a 24 hr/week job would be equal to 0.6 FTE job; a full-time position for three months would be equal to a 0.25 FTE job if the reporting period is one year). If the information is not available, the rule-of-thumb is two part-time jobs equal a full-time job.

8

Putting together these estimates from the survey results should allow for establishing a range for the jobs estimator coefficient. This can obviously be broken down to further levels of detail, including jobs by skills mix and gender.

With the coefficient established, the next step is to turn this coefficient into a value chain-wide aggregate jobs estimate. This would be done by reversing back through the sample frame developed for preparation of the survey, using the population proportions to calculate aggregate figures for the entire value chain.

Finally, a critical question for the broader exercise is whether the estimations that we arrive at for a particular value chain in a particular country are generalizable. When we have carried out three or four country-specific value chain- based estimations in, for example, the poultry value chain, will we begin to converge around some standard measures of jobs potential? Or instead will we find that value chains are highly heterogeneous, with large variations across countries? This remains to be seen – it may well be the case in some value chains more than in others.

9

ANNEX: SURVEY INSTRUMENT

10

VALUE CHAIN ASSESSMENTSURVEY QUESTIONNAIRE

IMPORTANT CONSIDERATIONS WHEN USING THIS SURVEYThis survey is a tool to help estimate the scale and nature of jobs that are linked to specific value chains. Does this survey apply to all economic sectors?This is a generic survey instrument. In order to maximize the usefulness of this survey, interviewers will need to fine-tune it by adding sector-specific questions or including adjustments in existing ones.

How should the interview be conducted?Whenever possible interviews should be carried out face-to-face or via telephone. For logistical reasons in some cases it may be necessary to survey via email, internet, or mobile phone, but these should not be the primary approach for the majority of interviews. Note that interviewees may not have all data available to answer all questions, so in some cases it may be necessary to send some questions ahead of time or to follow-up after the initial interviews.

Who should respond to this survey? The background information on the company and the questions around business strategy and industry-related opportunities and challenges should be discussed with senior management of the company. Other questions, however, may require specific functional inputs. Following is an overview of the potential respondents for each module of the questionnaire:

Module RespondentsFirm background, markets, and competitive environment

Senior Management

Workforce Senior Management; Human Resources Manager

Production structure Senior Management; Production ManagerSupply chain Senior Management; Production Manager;

Procurement Manager; Logistics Manager

How long should the interview last?It is expected that the interviews will last 30-45 minutes.

11

VALUE CHAIN ASSESSMENTSURVEY QUESTIONNAIRE

INTERVIEWER: READ THE FOLLOWING TO THE RESPONDENT BEFORE CONTINUING:All questions contained in this questionnaire are strictly confidential. Any information you share about your business

will be aggregated with others for the sole purpose of assessing job creation potential in the value chain. Neither your name nor the name of your firm will be used in any document based on this survey.

Name(s) of respondent(s) (Last, First, M.I.)

     

     

Position(s) within the businesss

     

Contact details:Phone: Email:Fax:

GPS coordinates (decimal format) Latitude: Longitude:

Date

Survey ID:

Enumerator ID:

12

A. FIRM BACKGROUND, MARKETS, AND COMPETITIVE ENVIRONMENTA1. Please describe the activities of your business

Please indicate the industrial classification code       See list

A2. Legal structure:

Sole proprietor Partnership Limited liability Corporation (publicly traded) Multinational Public / State-owned Public-Private ownership Cooperative Association / partnership Social Enterprise Other (specify): ______________

A3. Is the business formally registered (for the purposes of paying tax and social security contributions)? yes      no      

A4. Ownership structure: Fully foreign owned Joint venture (foreign / domestic) Fully domestically owned

A5. If the business has foreign ownership, what percentage is foreign-owned?      

A6. If the business has foreign ownership, please specify the main countries from which the foreign ownership comes:

A7. Amongst the owners of the business are there any females ?      A8. What percentage of the firm is owned by females?      A9. When was the business founded?       When did the business start operations in the country? (Disregard if same)

     A10. When the business was founded how many full-time employees did it have?       A11. How many full time employees did the business have in the last financial year?      

* Note: microenterprises and other businesses that do not recognize a ‘financial year’ should answer for the period covering the previous 12 months

A12. Approximately what was the total sales of the business over the last financial year?       please indicate currency

* Note: microenterprises and other businesses that do not recognize a ‘financial year’ should answer for the period covering the previous 12 months

A13. What is your business’s most important products and services (please indicate up to 3, by order of sales)? Approximately what percentage of your total sales do these each account for?

Product / Service % of sales in last 12 months

Distribution of sales by marketLocal / national (%) Export (%)

                OtherTOTAL 100

A14. For each of the products and services listed in the question above, please indicate the share of sales that are sold to local markets, national markets (outside the local area), and exported to international markets.

Product / Service Distribution of sales by marketLocal (% of sales) National (% of sales) International (export)

(% of sales)                OtherTOTAL 100%

A15. Are any of the products and services listed above highly seasonal in nature (i.e. they are sold mainly or only in certain months of the year)? If so, please indicate peak and low months.

Product / Service SeasonalityPeak months Lowest months

                

13

A16. Thinking over the past financial year, how many customers did you have? 1 2-4 5-20 21 or more Don’t know

A17. How would you describe your largest customer? Individual consumer (e.g. selling in a market) Small, individual trader or wholesaler Large trader or wholesaler small or medium local processor large local processor international processor Other (please specify)________________________________________

A18. Approximately what percentage of your total sales come from your top customer? _________________A19. How long have you been a supplier of your top customer?_______________ yearsA20. What is the nature of the contract that you have with your top customer? please mark most relevant

Long-term contract (>1 year) Short-term contract (<1 year) Ad hoc (no contract) Trial contract Don’t know

A21. Who are your main competitors? Please rank by order of importance (1= most important) a. Other firms / farmers in the local

area:      

b. Domestic national companies:      c. International companies:      d. Other (please specify:      

A22. We are looking to identify other businesses in this sector that we can interview. Could please name some of

the important companies (processors, wholesalers, traders, etc.) that are current or potential customers for businesses like yours (Clarify confidentiality)?

A23. What are the main obstacles to increasing your sales to key customers? Please score the following criteria on a scale from 1 to 4, where 1 means “no obstacle” and 4 “severe obstacle”. If possible, please elaborate on each of the criteria

Criteria Scoring Commenta) Our production costs make our prices uncompetitive

1 2 3 4

b) We are unable to meet quantity and varieties demanded (insufficient capacity) 1 2 3 4

c) Our quality or skills are insufficient 1 2 3 4

d) We lack the technologies or information required (e.g. software, equipment, information on market opportunities, etc)

1 2 3 4

e) We lack necessary working capital 1 2 3 4

f) We are unable to deliver on a timely basis due to market access (transport) or communications constraints 1 2 3 4

g) We are unable to provide required business or legal information (audited accounts, registration, etc.) 1 2 3 4

h) We do not have required certifications or are unable to meet industry standards (please specify if possible) 1 2 3 4

i) We lack access to land 1 2 3 4

j) Other (please specify) 1 2 3 4

14

B. WORKFORCEB1. In the last financial year how many full time workers did you employ in the business?      B2. In the last financial year how many part-time or seasonal workers did you employ in the business?       What

was the average length of their employment?       (estimate in weeks)B3. Based on the numbers you indicated above, please estimate the number of each category of worker

employed in the business across the following categories of high and low skill positions? What is the average monthly wage in each position?

Higher skill workers Lower skill workersManagement High skilled

production workers and technicians; high-skilled

services workers (workers with a tertiary degree

or technical diploma)

Lower skilled production workers,

craftsmen (workers with lower degrees or apprentice-

training)

Unskilled production

workers, drivers, laborers

Clerical and other services

workers

a.) Total full timeb.) Total casual and

seasonalc.) Average

monthly wage (in local currency units)

B4. Based on the numbers you indicated above, please estimate the percentage of each category of worker that is: a) female; b) foreign; and c) youth (under the age of 25)

Higher skill workers Lower skill workersManagement High skilled

production workers and technicians; high-skilled

services workers (workers with a tertiary degree

or technical diploma)

Lower skilled production workers,

craftsmen (workers with lower degrees or apprentice-

training)

Unskilled production

workers, drivers, laborers

Clerical and other services

workers

a.) % of total femaleb.) % of total foreignc.) % under age 25

B5. What are the main reasons you make use of casual or part-time labor? Please rate and describe

Rate importance (1 to 4) as a reason for using casual / part time labor (1= not important;4= very important)

Seasonal demandsShift structureLabor / skills shortageLabor regulationsOther (please specify)Does not apply

B6. Please indicate the degree to which the following labor issues are a barrier to the growth of your firm (1= no barrier; 2= minor barrier; 3=substantial barrier; 4= major barrier)

Issues Rating CommentsEmployment protection legislation / labor code and lawsLabor availabilityLabor cost – overall wagesMinimum wage (if exists in the country)Payroll taxes and social security / pension paymentsWorker skillsWorker turnover (retention of staff)

15

B7. In the past 3 years have you tried to hire any of the following workers? Please mark all that apply High skill

Low skill (as defined in Q B3)

B8. Did you encounter any of the following problems in trying to hire for this position(s)? Please mark all that applyThere were no or few applicants

Applicants lacked required skills

Applicants lacked required experience

Applicants expected too high pay

Applicants did not like working conditions

Other (please specify)

High skillLow skill

B9. What did you do as a result of these problems? Please mark the most relevant response for each of High Skill and Low Skill

We eventually found the right staff

We did not hire at all

We hired fewer than we needed

We hired a different skill and trained them

Other (please specify)

High SkillLow Skill

B10. Do you face any additional challenges in trying to hire female employees? yes no If you answered ‘yes’, please describe

B11. In which specific technical skills that you require are you facing the biggest constraints in finding workers Please distinguish between High Skill and Low Skill above PROVIDE LIST OF POTENTIAL ANSWERS BASED ON RESEARCH OF THE INDUSTRY

High Skill workers Low Skill workers

16

C. PRODUCTION STRUCTURE C.1. (FOR MANUFACTURING) Based on your existing technologies, how much output could your business produce

in a year? (please indicate units – weight or other) _______________ What was your actual output in the last financial year? _____________

C.2.(FOR AGRICULTURE) How many hectares do you have under production (or size of herd if livestock farming)? __________ What was the total output produced from this in the last financial year (please indicate units – weight or other)_______________

C.3.For your main product, please estimate the total cost of production and delivery to the customer ____________________ (please estimate the cost per unit and indicate currency)

C.4.Please estimate the % of this cost that comes from the following:% of costs

a) Labor costsb) Materials inputs

costsc) Other main input

costs (electricity, water)

d) Transport and storage

e) Depreciation of equipment

f) OtherTOTAL 100%

C.5.If your business were to increase output substantially, what would be your strategy in terms of hiring workers and investing in new equipment? please indicate one option belowa.) Hire more workers only maintain currency machinery and equipment _________b.) Hire more workers and also invest in new machinery and equipment _________c.) Maintain current workforce and invest in new machinery and equipment________d.) Reduce my workforce and invest in new machinery and equipment_____________e.) Nothing – would use my current workforce and machinery and equipment_____________f.) Don’t know__________

C.6.Let’s say your business were to increase output by 100%, by how much would you anticipate to increase (or decrease) your workforce and your machinery and equipment compared to the present level:

Expected percentage increase OR decrease with 100% increase in output

WorkforceLow skill workers

High skill workersMachinery and equipment

C.7. If you answered c, d, or e to question C5, what are the main reasons why you would not plan to hire more workers even if you increased output substantially? Please rank by order of importance (1-5, where 1= most important)

a)       I am currently operating below capacity b)       I can take advantage of economies of scalec)       I can access new technology relatively cheaply d)       Labor is too expensive e)       I cannot get the skills I would need

      NA/ Do not intend to use less labor per unit of output in the future

17

D. SUPPLY CHAIND.1. What are your top 2 most important inputs (raw materials and components) AND your most important

services inputs (transport, ICT, accounting, etc.) and indicate from where they are sourced?Raw Material/Input Type [input 1] [input 2] [service input]Approximate share of total input costs (%)Share sourced locally (%)Share imported (%) Main country imported from – if applicable

D.2. If you were to increase output by 100%, by how much would you anticipate to increase (or decrease) your use of each of these main inputs compared to the present level:

Raw Material/Input Type [input 1] [input 2] [service input]Expected percentage increase OR decrease in use if output increased by 100%

D.3. Approximately how many active suppliers does your business work with today for each of these main inputs?

Raw Material/Input Type [input 1] [input 2] [service input]

Other goods and services

Estimated number of local suppliers in the marketNumber of active local suppliers you useNumber of active foreign suppliers you useNumber of suppliers from the informal sector (if any)Please list names of some local firms that you know supply these goods or services

D.4. What do you estimate is the total share of supplies and services that you purchase from local

companies? from national companies outside the local area? that you import?Local National International

(imported)TOTAL

Estimated percentage of current total spending on goods and services supplies by source (indicate %)

100%

D.5. Do you have a specific plan to purchase more from local suppliers? Yes No

D.6. If you answered ‘yes’ to Q D5, what do you estimate will be the total share of goods and services you purchase locally 2 years from now?

Local National International (imported)

TOTAL

Estimated percentage of total spending on goods and services supplies by source (indicate %)

100%

D.7. Is your firm facing obstacles in sourcing from local firms ? Raw Material/Input Type [input 1] [input 2] [service

input]Other goods and services (note specific goods with obstacles to local sourcing)

Obstacles to source from local firms? (yes/no) Yes No Yes No Yes No

D.8. If you answered YES to Q D7, what do you perceive to be the main obstacles in sourcing from local

firms across the three main inputs? Please scale from 1 to 4 for EACH statement below? (1 means “no obstacle” and 4 “severe obstacle”)a. Their pricing is uncompetitive      b. They do not have adequate quality      c. They lack suitably trained and skilled personnel      d. Their production capacity is too small      e. They are unable to make timely deliveries (quick response)      

f. They do not have quality certificates we require from our suppliers      

g. The cannot meet health, safety, environmental, and/or social      

18

standardsh. Other (please specify) ___________________________________      

19