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Integrating SMEs into Global Value Chains

Integrating SMEs into Global Value Chains: Challenges and Policy Actions in Asia

Asian Development Bank Institute
Copyright Date: 2015
Published by: , Brookings Institution Press
Pages: 174
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  • Book Info
    Integrating SMEs into Global Value Chains
    Book Description:

    Globalized production networks, or global value chains, provide an opportunity for SMEs to upscale their business models and to grow across borders. This process can enhance SME competitiveness, create more jobs, and promote inclusive growth in developing Asia. The Asian Development Bank (ADB) and the ADB Institute (ADBI) recognize the importance of integrating SMEs into global value chains. To provide pathways for such integration, this study examines ways of encouraging participation in value chains, and explores policy solutions to address the financial and nonfinancial barriers faced by these enterprises.

    eISBN: 978-92-9257-136-8
    Subjects: Economics
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Table of Contents

Export Selected Citations
  1. Front Matter (pp. i-ii)
  2. Table of Contents (pp. iii-iv)
  3. Tables, Figures, and Boxes (pp. v-vi)
  4. Foreword (pp. vii-vii)
    Noritaka Akamatsu and Naoyuki Yoshino

    Asia’s rapid growth over the past 4 decades has had a profound impact on the global economy, and positioned Asia as a driver of global growth. Meanwhile, Asian economies have been increasingly affected by global economic uncertainty. The 2008/09 global financial crisis and its aftermath have depressed demand from developed countries, and brought about an economic slowdown in developing Asia. The pace of growth in labor productivity in the region has decelerated. In this context, the promotion and development of small and medium-sized enterprises (SMEs) have the potential to boost productivity and increase employment at the national, regional, and global...

  5. Acknowledgments (pp. viii-ix)
  6. Abbreviations (pp. x-xi)
  7. Executive Summary (pp. xii-xiv)

    The fragmentation of production processes, and the diversification of marketing channels over 3 decades, have brought about fundamental changes in the way that goods and services are produced and sold. These changes have been made possible by the rapid spread of low-cost transportation and advanced communications technologies, which have freed the movement of investment, goods, information, and finance.

    This process of globalization has been spearheaded by large enterprises that have sought access to low-cost labor and production inputs. In the process, these enterprises have spread investment across a range of low-, middle-, and high-income countries. Seeking to capture markets of...

  8. CHAPTER 1 SMEs and the Rise of Global Value Chains (pp. 1-26)
    Charles Harvie and Teerawat Charoenrat

    Globalization and increased regional economic integration have intensified competition in both domestic and international markets, and triggered new models of global business. The most substantive and pervasive of these models has been the development of global value chains or production networks. At the core is an original equipment manufacturer, usually a multinational enterprise; critical to this development has been the need for flexibility in production, cost competitiveness, and reduced business risk. These developments have presented new challenges as well as opportunities for small and medium-sized enterprises (SMEs). Despite the many barriers and capacity constraints they face arising from their relatively...

  9. CHAPTER 2 SME Participation in Global Value Chains: Challenges and Opportunities (pp. 27-65)
    Masato Abe

    Given an increasing role of global value chains (GVCs) in trade and investment expansion and production restructuring in Asia, it is important to enhance the understanding of their contributions to economic development, where small and medium-sized enterprises (SMEs) play an important role. While they are seen as a major contributor to a nation’s inclusive growth through enhanced productivity and employment creation, SMEs in developing countries in Asia have not well utilized business and trade opportunities generated by the emerging GVCs under the accelerated trade and investment liberalization as well as regional economic integration.

    What is not well documented, however, is...

  10. CHAPTER 3 Financing SMEs in Global Value Chains (pp. 66-100)
    Shigehiro Shinozaki

    Since the 1990s, the global economy has been supported by high growth across Asia. Compared to 1995 levels, almost all developing Asian countries have significantly reduced the proportion of their populations living below $2 a day, and many Asian nations have moved from low-income to middle-income countries.⁴³ However, the pace of growth in labor productivity in emerging and developing economies has been slowing since the 2008/09 global financial crisis (GFC). The International Labour Organization (ILO, 2013) reported that labor productivity has mostly decelerated or stagnated across the Asia and Pacific region since the onset of the GFC. Labor productivity growth...

  11. CHAPTER 4 Trade and Supply Chain Finance (pp. 101-116)
    Steven Beck, Alisa DiCaprio and Santosh Pokharel

    Trade finance has played a critical role in the expansion of trade over the past century. It enables firms to manage risks and distribute costs among parties. Without finance, global trade would grind to a halt. The interdependent relationship between trade and trade finance was sharply underscored during the Global Financial Crisis (GFC) of 2008/09, when access to finance was sharply curtailed, which contributed to a downward spike in merchandise trade flows. The global financial architecture has changed in the years since the GFC, but small and medium-sized enterprises (SMEs) in particular still struggle to access the finance they need...

  12. CHAPTER 5 Policies to Enhance SME Internationalization (pp. 117-143)
    Paul Vandenberg, Naoyuki Yoshino, Akira Goto, Patarapong Intarakumnerd and Jeffrey Miyamoto

    The capacity to export into the global marketplace is a good indicator of an economy’s competitiveness and that of its business sector. In turn, exports are valuable for the economy because they generate foreign exchange, employment, and wealth. While most exports are contributed by large firms, both domestic ones and foreign branch plants, small and mediumsized enterprises (SMEs) can and, in many cases, do make an important contribution.

    Most SMEs, however, do not find it easy to internationalize. Foreign markets provide an opportunity to expand but they also entail large start-up and market development costs, and they present huge risks...

  13. APPENDIX 1 Country Survey Profiles: Kazakhstan, Papua New Guinea, the Philippines, and Sri Lanka (pp. 144-146)
  14. APPENDIX 2 ADB Survey Questionnaire (pp. 147-159)
  15. Back Matter (pp. 160-160)