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Keypoints A systems approach can be used to understand and address key decent work deficits.This brief provides anoverview of how a systems approach can identify the root causes to decent work deficits in lower tiers of complexsupply chains and the means to address them. Such an approach can inform long-term action by ILO constituents–governments and employers’ and workers’ organizations–and development practitioners to tackle common“systemic” issues to improve both business outcomes and working conditions. Lower-tier suppliers face systemic constraints.MSMEs in lower tiers often operate in competitive markets and faceentrenched systemic issues such as limited access to finance, inadequate infrastructure, and weak regulatoryenforcement, which limit their potential to grow and provide better working conditions to their workers. A systems approach entails starting broad and sharpening the focus.Ithelps identify and understand thesebroader systemic issues that impact both enterprises and working conditions,taking particular consideration for thosein the lowest tiers of supply chains. The approach then becomes more targeted, prioritising the most pressing systemicissues and then identifying their root causes that could feasibly be addressed through action. Thinking in long-term horizons for sustainable change.Addressing systemic issues takes time and requirespartnering with stakeholders who possess the motivation and/or capacity to address these issues in the long-term. Forenduring impact,interventions should work toward strengthening incentives and capacities for governments,employers’organizations, trade unions and the private sector to lead this change. Supply chains:Atier-by-tieroverview effects,such as increased market information andopportunities,exposure to new technologies,productionpracticesand skills,which in turn,can lead to increasedcompetitiveness,growth and job creation.With MSMEsrepresenting the lion’s share ofenterprisesand workersin Supply chainsarean engine of developmentforMSMEsandtheirworkers. They enabledomestic and globaltrade,processingofraw materials into final products,andmoveproducefrom farms tomarkets toconsumers.ForMSMEs,links to supply chains can generate significant spillover whichprovide the materialsandservicesneeded to create aconsumer-readyproduct.Thesupply chainis made up ofvarioussupplier tiers, with each tier–from raw materialproductionto processing to marketing–providing anessentialfunctiontowardbuildingthe finalproduct. the economy1,improvingMSMEs’accessto supply chainsandtheir benefits is critical for fostering economicdevelopment and decent work. Whether domestic or global, supply chains are complexwithdynamic networks of interconnected suppliers, A snapshot ofthefirsttier Supply chainshavegenerallybenefited suppliersinthefirsttier.First tier suppliers are often larger,formalisedbusinesseswhichoperate in the formal economy,and arethussubjected to more government oversight andenforcement of labour laws. Also, as first tier supplierslinkdirectly to buyers, theyrespond more strongly to buyerrequirementsin terms of product specifications, quality, and social and environmental compliance. This can be beneficialin two critical ways.First, buyerscanmoreeasily transfer technology and knowledge to thesesuppliersas well asdeveloplong-term buyer relationships.Thisallows investment in capacity,skills and facilities,ultimatelydrivingupsuppliercompetitiveness. Second,firsttiersuppliers have a strong incentive to provide betterworking conditionsfor their workforce,giventhattheyareoftencontractually obligated to meet voluntary andmandatory sustainability requirementsas well asconsumer,investor, and governmentrequirementsregardinghumanrights(includinglabourrights)andenvironmentalprotection,particularly for international markets. Despitethe range ofbenefits,first tier supplierscanstill havemanychallenges,especially related to compliance.Forexample, first tier suppliers have tosimultaneouslycomplywith domestic labour law,meeta variety ofconsumer anddestinationmarketrequirementsforsocialandenvironmentalcomplianceandfollowbuyer-specificrequirementsthatoften align to onecertification schemeoranother. Thismay lead to supplier confusion over whichstandard or legal framework to followorevenaudit fatigue.Or worse, it canweakenfirst-tier suppliercompliance withnational labour lawas they may prioritise compliance toprivate requirements over domestic (legal) ones given thattheymayperceiveprivate requirementsasmoreimportantformarketaccesssale. Unpackinglower-tier suppliers Lower-tier suppliers have thegreatest need forcompliancewithnational lawsandprivaterequirements3andultimately,for enhancing workingconditions. Thisis due tothree keyreasons: Lower-tiersuppliersgenerallyoperateinanenvironmentwith weak governance, rule of law andgovernment enforcement of labour laws in informalsettings; ILO Brief From root causes to real change: Using a systems approach to foster decent work