Enhancing SME Participation in Global Value Chains: Determinants, Challenges, and Policy Recommendations

Achieving inclusive economic growth is one of the most pressing issues on the policy agenda for the 21st century. Promoting the development and internationalization of small and medium-sized enterprises (SMEs) is vital, given their economic prominence in many countries, and can increase productivity and competitiveness for more inclusive economic growth. An effective way for SMEs to internationalize their activities is to participate in global value chains (GVCs), which link firms across countries through international trade, enabling those with limited resources and capabilities to take up specific tasks or processes within a GVC, rather than having to engage in the entire production system. This volume examines the factors that determine SMEs’ participation in GVCs, identifies the obstacles faced, and provides recommendations for SMEs and governments for facilitating GVC participation by analyzing 10 Asian countries with diverse characteristics. The findings and discussions show that for SMEs, boosting technological capability and attracting foreign investment are crucial. For governments, priority areas include enhancing the quality of education, infrastructure, logistics, and governance, increasing the availability of financial and technical assistance, disseminating information on foreign markets, and establishing an open environment for trade and foreign direct investment.