Rising Concentration in Asia-Latin American Value Chains

Can Small Firms Turn the Tide?

image of Rising Concentration in Asia-Latin American Value Chains

Dynamic Asia has overtaken the European Union as Latin America and the Caribbean's second largest export market, after the United States. However, the region's exports to Asia remain concentrated in few commodities involved a small number of large firms. This book explores the present and future scope for the participation of small- and medium-sized enterprises (SMEs) in biregional trade and value chains and the measures that can be taken to make those chains more inclusive and sustainable. It encourages governments in Latin America to improve the business environment in order to encourage multinational firms to invest, upgrade and innovate in the region.



Supplier development programmes in the automotive industry in Asia

This chapter looks at how supplier development programmes (SDPs) in Indonesia, Malaysia and Thailand have intended to improve the capabilities of domestic small and medium-sized enterprises (SMEs) within the automotive industry. All three countries have developed programmes with Japanese car makers, including Dharma Bhakti Astra Foundation (YDBA) (Indonesia), Malaysia Japan Automotive Industries Cooperation (MAJAICO) (Malaysia) and Automotive Human Resource Development Project (AHRDP) (Thailand). These countries also implemented a similar set of industrial policies between the 1960s and 1990s as a way to protect and support domestic industries, and they later opened this sector to foreign competition. They also adopted a “competitive pathway” to enhance SME competitiveness through their participation in global value chains (GVCs). The impact of SDPs in Malaysia and Thailand appear to have been greater than in Indonesia. However, the SDP programmes in all three countries have experienced low levels of SME participation. More effective communication and higher commitment by governments and multinational corporations (MNCs) is crucial for promoting the role of SMEs in these production networks.


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