Paper short abstract:

This paper presents findings from a survey of the textiles and apparel sectors of Tanzania and Kenya, with a particular focus on how upgrading and other outcomes vary in relation to the types of value chains in which firms participate at the national, regional and global levels.

Paper long abstract:

The framework of upgrading in value chains provides a useful way to conceptualise firm and sector performance, yet the literature has been excessively focused on global value chains (GVCs) to the neglect of regional value chains (RVCs) and national value chains (NVCs). With increased uncertainty in global trade, a gradual shift in demand dynamism from North to South and concerted efforts towards regional integration among developing countries, there is a heightened need for studies to unpack the implications of firm engagement with different value chains.

This paper presents the findings of a firm survey in the textiles and apparel (T&A) sectors of Tanzania and Kenya. Unlike previous T&A sector studies in sub-Saharan Africa, the survey was designed to capture firm engagement with and upgrading in multiple value chains and end markets. Furthermore we 'unbundle' the usual packages of functions found in the T&A literature (CMT, FOB, OBM, etc.) to explore how firms perform different functions in different value chains.

We find significant variations in firm performance in relation to value chain orientation. Upgrading outcomes are presented in terms of functions, products, processes and end markets, and other important outcomes on employment, local content and capacity utilisation are discussed. The findings point towards the development of smart industrial policies which do not rely on a single value chain type, but strategically combine the benefits of NVCs, RVCs and GVCs over time for the development of productive capabilities.