The World Bank and the Organization for Economic Cooperation and Development (OECD) jointly published a report titled “Inclusive Global Value Chains: Policy Options for Small and Medium Enterprises and Low-Income Countries” in 2018. The report aimed to address the challenges faced by small and medium-sized enterprises (SMEs) and low-income countries in participating in global value chains (GVCs).

The report highlighted that SMEs and low-income countries face several obstacles in integrating into GVCs, such as limited access to finance, technology, and skills, weak infrastructure, and limited participation in international standards-setting bodies. These challenges, in turn, limit their ability to upgrade their production processes and access new markets.

To overcome these challenges, the report proposed a range of policy options for SMEs and low-income countries, including:

1. Building productive capabilities: This involves improving the skills and knowledge of SMEs, upgrading their technology, and developing infrastructure that supports their participation in GVCs.
2. Promoting entrepreneurship and innovation: Governments can support the development of innovative SMEs by providing access to finance, reducing bureaucratic procedures, and creating an enabling environment for entrepreneurship.
3. Facilitating trade and investment: Governments can promote trade and investment by reducing trade barriers, simplifying customs procedures, and negotiating preferential trade agreements.
4. Strengthening institutions: Governments can improve the functioning of institutions by improving the legal and regulatory framework, increasing transparency and accountability, and promoting competition.
5. Fostering inclusive growth: Governments can promote inclusive growth by ensuring that the benefits of GVC participation are shared widely, including by women, youth, and marginalized groups.

The report also emphasized the importance of international cooperation in addressing the challenges faced by SMEs and low-income countries. It called for greater coordination among international organizations, such as the World Trade Organization, the International Finance Corporation, and the International Labour Organization, to support SMEs and low-income countries in participating in GVCs.

In conclusion, the report provides a comprehensive framework for policymakers to promote inclusive GVCs and enable SMEs and low-income countries to fully participate in the global economy.

To download the report click here