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Christianty, R and Hidayati, R. 2020. Strategy to Increase the Competitiveness of SMEs and their Integration into Global Value Chain. The International Journal of Business Management and Technology, Volume 4 Issue 1 January – February 2020 (97-103)

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  • Christianty, Restia
  • Hidayati, Ratnaningsih

Abstract

Small and Medium Enterprises is one of economic pillars in Indonesia. However, Indonesian SMEs has not performed well comparing to other ASEAN countries, particularly in terms of participation in global and regional production networks. This study aimed to identify factors causing the low participation of Indonesia SMEs into the Global Value Chain (GVC). This research is conducted with literatur study and Internal & Eksternal factors analysis. Result shows that the low participation of SMEs and Indonesian companies in GVC is determined by the lack of optimal GVC support factors, namely infrastructure and use of communication and information technology, reliability and efficiency of logistics services, and high trade barriers. The relatively high level of wages is also an obstacle to increasing production efficiency. Likewise, the strict requirements for obtaining access to external financing from banks. Another problem faced by SMEs is that most of them do not know where their position are in the GVC. Increasing SMEs participation into GVC will automatically improve their competitiveness in the global economy. There are internal and external factors that determine the competitiveness of SMEs. Internal are human resources, marketing strategies, and innovation. Meanwhile, external factors are the ease of trying in Indonesia, access to finance and capital, market access and infrastructure.

Suggested Citation

  • Christianty, Restia & Hidayati, Ratnaningsih, 2020. "Christianty, R and Hidayati, R. 2020. Strategy to Increase the Competitiveness of SMEs and their Integration into Global Value Chain. The International Journal of Business Management and Technology, V," OSF Preprints ua9zv, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:ua9zv
    DOI: 10.31219/osf.io/ua9zv
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    References listed on IDEAS

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    1. Ovidiu NICOLESCU, 2009. "Main Features of SMEs Organisation System," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 10(3), pages 405-413, July.
    2. Asian Development Bank (ADB) & Asian Development Bank (ADB) & Asian Development Bank (ADB) & Asian Development Bank (ADB), 2015. "Integrating SMEs into Global Value Chains: Challenges and Policy Actions in Asia," ADB Reports RPT157679-2, Asian Development Bank (ADB).
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    1. Kalyuzhnova, Yelena & Holzhacker, Hans, 2021. "Enhancing Connectivity and Trade Between Central Asia Regional Economic Cooperation Countries and the World: Benefits, Risks and Policy Implication," ADBI Working Papers 1271, Asian Development Bank Institute.

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