(CPV) – Small and Medium-sized Enterprises (SMEs) in Asia and Pacific form the largest generator of domestic employment and provide a livelihood for more than 60% of the region’s workforce, especially women and young people.
The most serious challenge facing SMEs is how to create new business opportunities for more value-added products and services, especially tradable ones, which are very much in line with the region’s commonly-accepted trade and FDI-led development strategy.
Obtaining access to profitable export markets is crucial to fostering SME growth and productivity, especially given the increasing globalization and market liberalization.
The transformation of regional businesses by the emergence of global value chains signals potentially new and important directions for SME development in Asia and the Pacific. The global and regional value chain (GVC) approach in particular, provides the following four advantages for SME development at the national and regional levels:
In recognition of the diversity of developing economies of the region in terms of economic status and condition, and natural endowment, the specific sector value chain-based approach could identify development issues more easily, while the “one size fits all” tailored approach may not be workable in all participating countries.
The approach covers the seven essential issues for SME development, as mentioned above, through comprehensive development programs.
The value chain approach will force policy-makers to adopt a program for regional cooperation that moves the development assistance paradigm beyond national borders.
The value chain approach is closely linked to the attraction of appropriate FDI, which plays an important role in the development of value chains and, therefore, helps in promoting intraregional FDI.