Entry into Global Value Chains allows small and medium-sized enterprises (SME s) to participate in the global economy.
Mapping Global Value Chains shows that these may vary in their structure and in their potential to benefit SME s in developing countries. While some governments have formulated
industrial policies and may promote certain economic sectors, they have been less supportive of SME s, particularly in enhancing their role in the global economy. Nevertheless, there is growing awareness of the contribution of SME s to income, employment and exports.
A number of international organizations such as the Organization for Economic Cooperation and Development (OECD), the International Labour Organization (ILO), the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Industrial Development Organization (UNIDO) have undertaken research and held expert meetings and ministerial conferences to highlight SME contributions and how governments can strengthen SME supply capacities.
This publication is a contribution to this effort. It focuses on what governments should do to facilitate the entry of SMEs into Global Value Chains and to ensure that they benefit from such participation. OECD and UNCTAD jointly undertook case studies of diverse Global Value Chains in the automotive, cinema, scientific and precision instruments, software and tourism sectors, in both developed and developing countries.
In particular, UNCTAD developed six in depth case studies, contained in Part II of this publication, focusing on the automotive sector, the software sector and the
cinema and audiovisuals sector. Despite wide differences in their structures, the influence of the lead firms, the degree of SME independence and their contribution to value-added, SMEs in these Global Value Chains unanimously agreed that there was a role for governments in two critical areas.
First, governments should do a better job in fostering skills development. Global value chains require that SME s be both dynamic and innovative. This means they must be able to hire qualified workers with the right skills particularly, the right highly-specialized skills.
Second, governments must enable SME s to meet international standards. Here governments need to support the harmonization of diverse and burdensome product and process quality standards and also design financial measures and instruments to allow SME s to invest in continuous innovation and technological upgrading.
I hope that this publication will raise governments’ awareness of the need for effective policies and programmes that can maintain or increase SMEs’ ability to enter and benefit from their integration in Global Value Chains.
Secretary-General of UNCTAD