A new study from the International Labour Organisation (ILO) has unveiled how a systems approach can improve working conditions in lower-tier supply chains.

The report, ‘From root causes to real change: Using a systems approach to foster decent work deep in supply chains’ said for Micro, Small and Medium Enterprises (MSMEs) in the lower tiers, joining more demanding supply chains – those with stricter standards of quality, sustainability and compliance – could lead to concrete benefits such as enhanced productivity, improved wages and job creation.

It said that while first-tier suppliers are often able to comply with regulations and benefit from direct buyer relationships, MSMEs in lower tiers remain constrained by limited access to finance, poor infrastructure, and weak enforcement of labour laws.

These challenges, the brief stated, hinder their capacity to grow, improve working conditions, and secure better-paying markets.

However, it said that without addressing the underlying systemic issues, the opportunities remain untapped.

Chief of the ILO’s Micro, Small and Medium Enterprises Branch, Dragan Radic, said that through the systems approach, it would strengthen MSME competitiveness and promote decent work by first identifying the root causes of key bottlenecks and later working with ILO constituents to address them in a long-lasting way.

According to him, the systems approach helps ILO programmes and partners identify, prioritise, and address the root causes of the systemic issues that affect business performance and working conditions.

By doing this, he said, interventions can effectively foster more and better jobs, which can be scaled for long-lasting, sustainable change.

He added that the ILO demonstrates how stakeholders (including governments, employers’ organisations, and workers’ groups) can apply a systems approach in crafting interventions that offer evidence-based, long-term solutions.

“This kind of long-term, holistic thinking is what it takes to unlock decent work opportunities where they’ve historically been out of reach.

“Supply chains can be an entry point for decent work in MSMEs when they are supported within a stronger, more coherent system, achieving real ripple effects in productivity, wages, safety, and overall job quality,” he said.