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SME Competitiveness: Making Trade Happen
A presentation at: “Enhancing the Participation of MSMEs in International Trade”
By: Marion Jansen, Chief Economist, ITCDate: WTO, 21 June 2016
Exporters tend to be larger and more productive
2
Source: ITC OCE calculations from World Bank ES dataset*‘Exporter’ is defined as a firm with 10% or more of sales exported (direct plus indirect)
ExportersNon exporters
0 1 2 3 4 5log10(Number of employees)
2
4
6
8
10
log 1
0(Tu
rnov
er /
dolla
rs)
0 31 62 92 123 154 185
Density of firms
Number of firms: 40734
0 1 2 3 4 5log10(Number of employees)
2
4
6
8
10
log 1
0(Tu
rnov
er /
dolla
rs)
0.0 5.7 11.3 17.0 22.7 28.3 34.0
Density of firms
Number of firms: 8726
Productivity gap between large firms and MSMEs is larger in developing countries
3
• SMEs are generally less productive than large firms
• The gap is larger in developing countries, explaining why SMEs find it hard to trade
Source: OECD-UN-ECLAC (2013)
What do MSMEs need to trade?
Leadership and management
Accessing and interpreting information
Signalling quality and sustainability with standards
Financing working capital and investments
Access to skills for competitive edge
Access to inputs and customers
Innovative capacity
4
Helping MSMEs to trade: Determinants at three levels of the economy
Three layers of determinants
Firm level capabilities
Immediate business environment (TISIs, networks,infrastructure, platforms)
National policy environment
5
Making trade happen (AfT)
Trade rules
Bringing SME voice into rule making
Making MSME trade happen: example 1
Management
Information
Standards
Financing
Skills
Access
Innovative
6
Raise understanding Build capacity Build
consensusMake change
happen
SME Competitiveness Outlook
Making MSME trade happen: example 2
Management
Information
Standards
Financing
Skills
Access
Innovative
7
Raise understanding Build capacity Build
consensusMake change
happen
Joint ITC-UNDESA-WTO initiative:
Alert system for SPS and TBT notifications, enhancing transparency of and dialogue on amended/new regulations
Making MSME trade happen: example 3
Management
Information
Standards
Financing
Skills
Access
Innovative
8
Raise understanding Build capacity Build
consensusMake change
happen
E-Commerce
Publication: “Bringing SMEs onto the E-Commerce Highway”
Public-Private Dialogue: “ITC - CCPIT – B20 China “E-commerce Dialogue: G20 Policy Options”
ITC: Making Trade Happen for MSMEs
Look out for SME Competitiveness Outlook 2016:
Setting the Standard for Trade
http://www.intracen.org/smecompetitiveness
9
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