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
www.unescap.org.

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.

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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.

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 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:
www.unescap.org, or contact:

Director, Trade and Investment Division, UNESCAP

Bangkok, Thailand
Tel: +66-2-288-1671; Fax: +66-2-288-1026; Email: xuan@un.org