ABSTRACT
Functional upgrading means changing the mix of activities executed by actors in the value chain by adding or deleting activities to the ‘repertoire’ of individual firms. For example, in development projects this may involve smallholder farmers adding value by taking on primary (and possibly secondary) processing functions of their crops. The resulting distribution of functions among actors in the chain should maximize its efficiency and competitiveness by attaining the optimal level of specialization versus integration. This chapter describes different modes of functional upgrading and their impacts at the value chain level.
