How to Foster the Internationalisation of SMEs through the Pacific Alliance Integration Process

Abstract:
This report is a preliminary stocktaking exercise, which underscores the significant opportunities that further intra-regional integration and support for SME internationalisation could bring to the economies of the four countries concerned. Representing close to 99% of businesses and 67% of employment, a comprehensive joint strategy in support of SME competitiveness and internationalisation could result in significant gains in terms of both productivity and inclusive growth.

• Section 1 provides a general context of SMEs and the existing trade structure in the PA, and of challenges and opportunities that SMEs face when engaging in international activities.
• Section 2 takes stock of PA countries’ current policy efforts and initiatives carried out to promote SME development and internationalisation; provides elements for the PA to consider in advancing their joint agenda, grouped in the policy domains of finance, business environment, firm capabilities, market
  access and trade.

Overall, the building of a regional market through the PA’s programme of trade and investment liberalisation, as well as the fragmentation of production into global value chains (GVCs), opens new opportunities for SMEs. However, trade and investment liberalisation alone will not be sufficient to secure a higher level of SME internationalisation. The PA economies, particularly Chile, Colombia and Peru, are currently concentrated on a few resource-oriented sectors where SMEs play a marginal role. The PA will need policies to promote economic diversification and support entrepreneurship and enterprise development to build productive capacities and develop new comparative advantages in the manufacturing and service sectors in order to broaden and deepen trade flows and enable a more active role for SMEs.

Resumen:
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Institutional Author: OECD
Full document: 2015, OECD, How to Foster the Internationalisation of SMEs through the Pacific Alliance Integration Process