By Amit Kapoor, and research support by Kartik, Khushi Joshi, Mukul Anand, Nabha Joshi, Sheen Zutshi, Teesta Bose

Within the realm of global economics, micro-, small- and medium-sized enterprises (MSMEs) emerge as the cornerstone of prosperity, embodying the largest and most influential segment across all economies (Storey, Pinch, & Mason, 1991). They constitute a vast majority of businesses worldwide and play a pivotal role in job creation and global economic growth. They make up about 90% of businesses globally and are responsible for over 50% of the total global employment. Despite being the largest business segment globally in terms of numbers, SMEs have been found to participate less in Global Value chains (GVC) than the large enterprises. (Chaisse & Rodríguez-Chiffelle, 2019)

Participation in Global Value Chains (GVC) refers to the extent to which a nation’s exports are embedded within multi-stage international trade processes. This concept refers to the integration of domestic value added into the exports of other nations, as well as the incorporation of foreign value added into a nation’s exports. The proportion of a nation’s total exports that is comprised of GVC participation provides a quantitative assessment of the extent to which its export sector relies on GVCs. GVC metrics also play a crucial role in assessing the extent to which sectors depend on international manufacturing networks.(UNCTAD, 2013).

The complete working paper can be read here.

© 2024 Institute for Competitiveness, India


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