The Global Economic Governance (GEG) Africa programme is a policy research and stakeholder engagement programme to strengthen the influence of pro-poor African coalitions at global economic governance fora.
Monday, 22 August 2016 09:50

Policy briefing: SMEs and GVCs in the G20: Implications for Africa and Developing Countries

Written by Peter Draper and Chiziwiso Pswarayi

GEGAfrica Policy Briefing 1, July 2016

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GEGAfrica Theme 3: Trade

Increasing the participation of developing countries in global value chains (GVCs) is now an accepted G20 priority. However, there is disagreement over how multinational corporations (MNCs), which drive GVCs, can be persuaded to incorporate small and medium enterprises (SMEs) from developing countries into the GVCs they co-ordinate. The choices range from conscious industrial strategies oriented towards coercive measures designed to force MNCs to integrate SMEs into their value chains, to facilitative approaches designed to attract MNCs to invest and, over time, incorporate domestic suppliers into their value chains. Nonetheless, there is consensus on the key constraints that inhibit the growth of SMEs in general, and their inclusion into GVCs in particular: transaction costs; access to network infrastructure; and the capacity of firms and supporting institutional arrangements. Accordingly, we offer a high-level framework of recommendations for G20 states’ consideration.

Read a longer Discussion Paper on this issue.

Authors: Peter Draper and Chiziwiso Pswarayi

See more work on Value Chains.
Interview: G-20 Summit and Global Value Chains, Implications for Africa.
Scoping workshop: Global Value Chains and Small, Medium Enterprises: What Role for the G20?
SMEs and GVCs in the G-20:Implications for Africa and developing countries.
Media Alert: The G-20 Summit and Global Value Chains: Implications for Africa.

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