Integrating SMEs into Global Value Chains: Risks, Challenges, and Opportunities | Asian Development Bank

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Integrating SMEs into Global Value Chains: Risks, Challenges, and Opportunities

Event | 14 - 15 September 2017 Ulaanbaatar, Mongolia

Background

A value chain describes the full range of activities through which goods or services pass from conception to distribution and beyond. This includes several activities such as design, production, marketing, distribution, and support for the final consumer, which may. A Global Value Chain (GVC) is a chain of activities divided among multiple firms in different geographical locations. GVCs cover a full range of interrelated production activities performed by firms in different geographic locations to bring a product or a service from conception to completion and delivery to consumers.

Participation in GVCs brings many potential advantages, such as technological transfer, skills upgrading, and innovation. These in turn result in positive impacts to local firms and small and medium-sized enterprises (SMEs) by making production more flexible and efficient. In East Asia, for example, where regional production networks are more established, SME exports have expanded, ranging from 5 percent of total exports in Indonesia to around 40 percent in South Korea. Indirectly, SMEs can capture market opportunities presented by GVCs by supplying to other exporters within the value chain. If both direct and indirect exports are considered, SME contribution to total exports could rise to 50 percent.

Despite a significant potential for SMEs to internationalize, many issues still need to be addressed. These include providing SMEs access to finance, management skills, technological innovation, and business networking. In addition, there’s a need to have a supportive operating environment for SMEs such as having adequate transportation, infrastructure, and regulations for SME activities. Not all SMEs will be suitable though to engage in GVCs as participation depends on country-specific conditions and factors. Thus, the challenge facing SMEs is not only to enter a global value chain, but also how to move up the chain by upgrading the value-added content of their activities.

Objectives

  • To promote SME development in developing Asian countries consistent with ADBI’s strategic themes of poverty reduction and inclusive growth, and regional cooperation and integration.
  • To better understand the risks, challenges, and opportunities of integrating SMEs into global value chains, including the role and significance of the SME sector for economic development in Asia; current trends in GVCs and regional production networks; and key policy actions and measures (e.g., skills acquisition, technology upgrading, innovation, capacity building, etc.) for SMEs to achieve their full potential from GVC participation.

Participants

About 20 mid-level government officials from ministries of trade, industry, planning and other relevant agencies from 10 Asian countries (i.e., Bangladesh, India, Kazakhstan, Kyrgyz Republic, Malaysia, Mongolia, Philippines, Sri Lanka, Uzbekistan and Viet Nam); as well as international experts and representatives from multilateral banks, academia, and the private sector involved in SME sector development, trade, and regional economic integration.

Participant responsibilities

Actively join discussions and share views and experiences.

Output

  • Better knowledge and enhanced capacity of attendees from participating Asian countries to understand the dynamics of SME development and global value chains, including the many barriers and constraints SMEs face in accessing global and regional markets;
  • Improved dialogue among government officials and experts on the trends and challenges of SME participation in GVCs, as well as specific policy recommendations, measures, and strategies needed to enhance participation; and
  • Presentation materials and country papers for upload to the websites of partner institutions.

How to register

By invitation only.

Language

English

Partners

Mongolia Ministry of Food, Agriculture, and Light Industry (MOFALI)

Time of event

09:00 - 18:00