Date of publication
26 February 2019

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26/02/2019 - As the global economy becomes increasingly interconnected, governments need to address the challenge of bringing about socio-economic progress in an open environment. Foreign direct investment (FDI) offers a useful host of technology and financial resources that may ‘spill over’ to domestic firms and industries, thereby increasing their productivity and capability. Yet, FDI reliant countries have experienced diverse outcomes, with some benefiting more than others. One of the many reasons for these diverse outcomes is the extent and quality of linkages between multinational enterprises (MNEs) and domestic firms, in particular small and medium enterprises (SMEs). Economies reaping the most benefits from FDI are also the ones that have been more successful in integrating their domestic firms into the global value chains (GVCs) of MNEs. Integration into GVCs serves as a powerful means to facilitate the transfer of technology, knowledge and skills, and widen access to finance and markets.

This joint OECD-UNIDO report identifies investment and related policies to enhance linkages between small and medium-sized enterprises (SMEs) in Southeast Asia and multinational enterprises (MNEs) and their impacts on SME outcomes in Southeast Asia. It documents the findings from a study on leveraging foreign investment in GVCs to create opportunities for Southeast Asian SMEs. The publication’s insights and recommendations support the implementation of the 2016-2025 ASEAN Strategic Action Plan on SME Development.  

This report is a contribution to a joint OECD-UNIDO project which comprises new policy research, quantitative and qualitative data collection and capacity building activities to support the development of linkages between SMEs and MNEs in Southeast Asia.

This publication was released at a launch event in Vienna on 26 February 2019.

See also

Integrating Southeast Asian SMEs in Global Value Chains - Synthesis Note

International investment in Southeast Asia

Making global value chains more inclusive in the MENA region: The role of MNE-SME linkages