Development Account Projects
Building productive capacities in developing countries to enhance their participation in global supply chains
Background:
Building productive capacity and enhancing international competitiveness is crucial for the economic growth of developing countries. Internationalization is one of the essential ways to strengthen the competitiveness of firms in developing countries. It includes strategies based on globally integrated forms of productive networks, such as linkages between transnational corporations (TNCs) and small and medium-sized enterprises (SMEs), clusters and global value chains. This project is aimed at enhancing the supply capacity of developing countries through enterprise internationalization, particularly in respect of small and medium-sized enterprises. The role of small and medium-sized enterprises and their contribution to economic growth, social cohesion, employment and local development is recognized by Governments worldwide. Therefore, strengthening the competitiveness of domestic small and medium-sized enterprises is vital for developing countries to benefit fully from international trade and investment opportunities and to achieve the Millennium Development Goals, in particular the goal of eradicating extreme poverty and hunger.
This project will combine advisory services and exchange of best practices on the internationalization of small and medium-sized enterprises for effective policy change and the delivery of technical assistance for the establishment of business linkages. It will develop business linkage capacity, identifying demand, targeting quality FDI and matching potential business partners in selected countries.
The project will be executed by UNCTAD, which will seek to collaborate with Governments, UNDP and other United Nations agencies, and selected private sector institutions. It will focus on three subregions: West Africa, the ASEAN subregion and the Common Market of the South subregion. Selected pilot projects will also be implemented in five countries, including at least three least developed countries.
Objective:
To strengthen the participation of developing countries in global supply chains through the adoption of policies and support measures for enhancing the international competitiveness of small and medium-sized enterprises in developing countries and their integration into the world economy through business linkages and outward investment.
Expected accomplishments:
- Enhanced capacity of national institutions to design, initiate and implement strategies, mechanisms and policies to facilitate formation and deepening of business linkages between TNCs and SMEs, and growth of SMEs.
- Increased dissemination of best practices, improved understating of business linkage constraints and benefits and enhanced regional cooperation.
- Enhanced capacity of stakeholders to provide SMEs with related tools, solutions and information to potential business linkage partnerships, and share expertise and best practices.
Implementation status:
This project began implementation in 2008 with the initiation and development of a national business linkage programme in each of the five targeted countries: Argentina, Mozambique, Tanzania, Uganda, and Zambia. The programme involves selecting potential TNCs and their suppliers, identifying the needs of TNCs and local SMEs, developing a selection mechanism of local suppliers, providing matchmaking services for potential linkage partners, assigning linkage promoters to assist SME partners. UNCTAD will also organize two training workshops in each of the five countries on business linkage opportunities and entrepreneurship skills training for selected SMEs and their TNC partners. An interactive Internet-based forum for dissemination of SMEs toolkits and best practices will be developed from the project workshops. Finally, the project will begin providing advisory services and assisting selected national institutions in identifying and evaluating value and supply chains, reviewing investment and business policy frameworks, and formulating policy and support measures for the development and upgrading of Small Medium Enterprises (SMEs).
