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Enhancing the Role of SMEs in Global Value Chains

image of Enhancing the Role of SMEs in Global Value Chains

The globalisation of production processes characterises the current phase of globalisation. Participation in global value chains (GVCs) can bring stability to small and medium-sized enterprises (SMEs) and allow them to increase productivity and expand their business. This OECD report identifies the ways in which governments, the business community, and international organisations can facilitate SMEs’ gainful participation in global value chains through policies, practices and targeted support programmes. It presents the findings of case studies carried out in five industries (the automotive sector, scientific and precision instruments, software, film production and distribution and tourism).

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Production in Global Value Chains

The globalisation of value chains has changed the way production is organised and has provoked important modifications in the relationships between partners along the value chain. This form of globalisation was determined mainly by the search for efficiency, which includes sourcing inputs from low cost or more efficient producers), the entry in new and growing markets, and the search for complementary and strategic assets. During the past two decades, the organisation of production has therefore undergone a dramatic evolution that has led to new forms of industrial and enterprise organisation on a worldwide basis. Despite the phenomenon being well acknowledged, it is still difficult to measure the extent of the globalisation of value chains. Evidence of this has been observed through indicators of economic globalisation, and notably in the increase of the share of intra-firm exports of affiliates under foreign control, the ratio of imported to domestic sourcing of inputs, and the export and import propensity of affiliates under foreign control in the manufacturing sector (OECD, 2007). 

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