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Expert Group Meeting on SMEs’ Participation in Global and Regional Supply Chains United Nations Conference

Expert Group Meeting on SMEs’ Participation in Global and Regional Supply Chains

United Nations Conference Centre Bangkok, Thailand, 9 November 2005

United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) organized the Expert Group Meeting on SMEs’ Participation in Global and Regional Supply Chains. Over 30 experts on enterprise development, including small and medium sized enterprises (SMEs) and corporate social responsibility (CSR) from public and private sectors, participated in the meeting and contributed to map out the policy implications of the emergence of global and regional supply chains on SME development for Asian and Pacific developing countries. The following is a selection of recommendations that emerged from the meeting. These will provide input for UNESCAP’s future work. Other organizations may also wish to use these as a basis for further work. A detailed report will be available soon at

Recommendations for UNESCAP and other international organizations

Conduct research on how to integrate SMEs into the value chains of the industries of the future with particular attention to corporate, national and regional conditions. Provide technical assistance to improve SME competitiveness at the national level. Develop a tool kit to assist SMEs’ integration into the global value chains. Initiate discussions on a regional basis for the development of region-wide product standards and certification procedures that are globally acceptable. Organize seminars and workshops in collaboration with other stakeholders on how SMEs could achieve business opportunities and growth by participating in supply chain networks. Dispatch missions to assess the “Gap” and inputs required for promoting SMEs’ participation in supply chains in the selected countries, which set out the strategy, operational modalities and role of stakeholders for promoting supply chains / use of ICT in the SME sector. Collaborate with advanced industrialized nations to transfer knowledge and technology to SMEs in developing countries. Initiate regional cooperation on information collection on markets and requirements for participation in supply chains. Document and increase awareness of good practices in the areas of ICT and knowledge management, and promote networking between governments, the private sector and civil organizations. Establish forums to facilitate industry-wide stakeholder dialogues on a common CSR framework, such as standards, benefits, responsibilities, requirements, certificates and institutional coordination. Undertake further research on CSR issues relevant to the SME sector, including case studies demonstrating the business case for implementing CSR, especially for SMEs, as well as analysis of problems and solutions throughout global value chains in different sectors (not only first-tier suppliers), and produce a CSR guidebook. Provide resources for advice and training for governments on CSR issues where their involvement is vital.


Support demonstration projects to show good practice in implementing CSR.

Establish a CSR Training Institute to be focal point for capacity building on CSR.

Encourage larger enterprises to actively participate in dialogues on CSR with SMEs.

Promote and facilitate the use of collective action to increase transparency, and use the convening power of the UN and other international organizations to drive change.

Recommendations for governments

Develop an enabling business environment that stimulates SME growth (e.g., regulatory framework; modern logistics; access to SME financing including trade finance; fair taxation; no corruption; fair competition; quality human resources; adequate business development services and availability of information on foreign markets). Foster SME clusters to increase collective production capacity and network those clusters. Facilitate development of linkages between SMEs and larger enterprises (both domestic and foreign) based on their changing needs. Ensure trade promotion efforts include and target SMEs and facilitate networking events with financial support for SMEs, such as trade fairs, trade and investment study missions and information dissemination. Share knowledge and experience and promote regional approaches, e.g. on product standards. Develop physical infrastructure and harmonize rules and regulations to ensure trade and transport facilitation in collaboration with various international and national initiatives. Facilitate the development of logistics facilities and procedures to attain lower cost and speedy movement of goods of higher value added. Develop a national strategy for SME development through ICT, knowledge management and supply chain management on strong base of consultations among the private sector, stakeholders and the civil society at large. Liberalize the ICT sector to the extent possible, to promote easy access to all, identify the limits of the market and optimize service provision. Invest in modern ICT infrastructure. Encourage regional trade and transport facilitation initiatives, such as paperless trading and one-stop/single-window systems through regional collaboration and stakeholder participation. Promote increased research on CSR, in particular on the business case for CSR at the individual company level, especially for SMEs. Support demonstration projects to highlight the business case for CSR implementation, develop local training facilities and university linkages for CSR, and stakeholder dialogues. Translate standards and other CSR resources into local languages. Support and promote the establishment and recognition local or regional standards on CSR. Streamline regulations to make it easier for SMEs to follow the law, and thus also reduce opportunities for corruption. Ensure laws and regulations as regards issues related to CSR are credibly enforced, including issues related to corruption, and that it is known to international buyers. Assist the business community in understanding the international business environment, such as foreign markets, product requirements and export procedures. Reduce high cost trade barriers.


Develop a number of intermediary organizations, such as business associations, and encourage SMEs to be members of those associations. Foster ICT developers to develop business applications in local languages.

Recommendations for business associations

Collect and disseminate information on foreign market requirements (including multinationals’ supplier selection criteria and practices regarding certifications, standards, capacity and credit) and sector-specific market research to members, possibly through regional cooperation between sectoral business associations as well as with governments. Encourage SMEs to enter into export markets, and provide sector specific training to SME exporters and potential SME exporters. Organize business networking events for SMEs in Asia and the Pacific, such as international trade fairs and buyer-seller meetings. Encourage and initiate cooperation between companies on a sectoral basis to facilitate the use of advanced ICT and knowledge management techniques, such as Internet, bar coding and radio frequency ID (RFID) GPS technology to track goods on a real time basis. Promote and create industry-wide codes of conduct and standards for CSR, to reduce number of audits, prevent local suppliers from playing off one code against another, and ensure local government acceptance of codes. Facilitate industry-wide stakeholder dialogues on CSR, to pre-empt sectoral reputational risks and produce a viable action plans, learning from lessons of CSR implementation in sectors which are more advanced. Mobilize the support of senior executives to support the prioritization and implementation of CSR, and develop chief executive and director training. Encourage and foster SMEs to participate at higher-tier suppliers. Improve SMEs’ ability to understand global and regional supply chain networks, such as international business, language, cultural differences, business procedures and politics, to reduce business risk to participate in supply chain networks. Study supplier selection process and assessment by larger companies. Study how to attract global value chains to smaller marker countries. Ask multinationals to make their requirements visible, to transfer technology and knowledge. Use available and easy-to-use ICT applications. Enhance Public-Private Partnerships (PPP) to develop SMEs. Facilitate SMEs working together, and encourage them to differentiate products. Ensure the availability of high-quality commercial business advisory services, such as marketing, strategic management, accounting, training, ICT and product development.

For the detailed report of the Expert Group Meeting on SMEs’ Participation in Global and Regional Supply Chains, see:, or contact:

Director, Trade and Investment Division, UNESCAP Bangkok, Thailand Tel: +66-2-288-1671; Fax: +66-2-288-1026; Email: