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

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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

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• 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

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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

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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

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