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Unlocking business opportunities for SMEs through global value chains

Unlocking business opportunities for SMEs through global value chains

Labor productivity in developing Asia has been slowing down since the global financial crisis. Declining global capital flows will gradually reduce capital accumulation in developing Asia, and as more Asian countries see an end to their population bonus, labor force accumulation will eventually diminish. Enhancing labor productivity is thus crucial to sustain growth in Asia.

So, how to achieve it?

Small and medium-sized enterprises (SMEs) are expected to reverse the deceleration trend of labor productivity in Asia. They are the key driver of Asia’s economies, accounting for 96% of all enterprises and the 62% of national labor force in the region, but their contribution to national GDPs is still less than half. Global value chains (GVCs) will play a pivotal role of unlocking business opportunities for SMEs, and SME participation in GVCs will in turn boost national productivity.


Financial Sector Specialist (SME Finance), Sustainable Development and Climate Change Department
Blog first published as an ADB blog

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